As of April 1, 2020, here is a summary of the financial and other assistance being offered to self-employed individuals and small-to-medium-size businesses in Ontario, including non-profit and charitable organizations:
THE FEDERAL GOVERNMENT:
Income Tax:
Businesses can defer payments, until after August 31, 2020, on any income tax amounts that become owing on or after March 18, 2020 and before September 2020. No interest or penalties will accumulate during this period. Nothing further needs to be done by businesses to access this relief.
The CRA has also indicated that it will not initiate any post assessment GST/HST or Income Tax audits in the next four weeks.
Business Credit Availability Program:
The Business Credit Availability Program includes: [1] Canada Emergency Business Account; [2] Loan Guarantee for Small and Medium-Sized Enterprises; [3] Co-Lending Program for Small and Medium-Sized Enterprises. These three programs are expected to roll out April 20, 2020.
Additional capital is promised and soon-to-be-available to support businesses experiencing cash flow interruptions through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).
Businesses must contact their financial institution for an assessment of their situation, which will refer the business either to BDC or EDC if their financial need is greater than what can be offered in the private sector.
It is anticipated that BDC will evaluate each business on a case by case basis, and loans will only be approved for businesses that were financially viable except for the cash flow interruption caused by COVID-19.
The Canada Emergency Business Account will also provide interest-free loans of up to $40,000 to small business and not-for-profits.
To qualify, the organization must have paid between $50,000 to $1 million in total payroll in 2019.
Loan Guarantee for Small and Medium-Sized Enterprises and Co-Lending Program for Small and Medium-Sized Enterprises will also offer loans of up to $6.25 million.
Canada Emergency Response Benefit (“CERB”):
Self-employed individuals and others who would not otherwise be eligible for Employment Insurance (“EI”) would be covered by CERB. CERB will provide a taxable benefit of $2,000 a month for up to four months, and the portal to apply for the benefit will be available in early April.
CERB will also apply to any employees who are not receiving income because of disruptions to work.
You can more information from us about CERB here: https://wardlegal.ca/31585663827847.
Expanded Wage Subsidy:
On March 28, the federal Government announced changes this program, including a 75 per cent wage subsidy, for up to three months, retroactive to March 15, 2020.
This wage subsidy is available to all companies, non-profits organizations that experience a drop of at least 30 per cent of its revenue.
The cap for the subsidy is 75 percent of $57,800, which is up to $847 each week.
There is no cap on the size of the company nor the number of employees.
You can more information from us about this wage subsidy here: https://wardlegal.ca/31585663827845.
GST/HST Deferment:
GST and HST payments, and duties and taxes on imports, will be deferred until June.
Work-Sharing Program:
Work-Sharing is an existing adjustment program designed to avoid layoffs when there is a temporary reduction in normal business activity for specific industries.
This is a three-party agreement between employers, employees and Service Canada, where an agreement is reached to reduce scheduled work and to share the available work.
Under the program, the maximum duration of Work-Sharing agreements is now 76 weeks.
You can find more information from us about working-sharing here: https://wardlegal.ca/31582887996646
THE ONTARIO GOVERNMENT:
Child-Related Assistance:
They have offered a one-time payment of $200 per child up to 12 years of age, and $250 for those with special needs, including children enrolled in private schools.
They will also provide emergency child care options to support parents working on the front lines, such as health care workers, police officers, firefighters and correctional officers.
Electricity and Energy Costs:
They promise more affordable electricity bills for eligible residential, farm and small business consumers, by providing approximately $5.6 billion for electricity cost relief programs in 2020-21.
They also promise to set electricity prices for residential, farm and small business time-of-use customers at the lowest rate, known as the off-peak price, 24 hours a day for 45 days to support ratepayers in their increased daytime electricity usage as they respond to the COVID-19 outbreak, addressing concerns about time-of-use metering.
The Ontario government represents it will provide $9 million in direct support to families for their energy bills by expanding eligibility for the Low-income Energy Assistance Program (LEAP) and ensuring that their electricity and natural gas services are not disconnected for nonpayment during the COVID-19 outbreak.
Employer Health Tax Exemption:
They will cut taxes by $355 million for about 57,000 employers through a proposed temporary increase to the Employer Health Tax (EHT) exemption.
Corporate Tax Credit (Specific Regions):
They will help support communities or regions lagging in employment growth with a proposed new Corporate Income Tax Credit, the Regional Opportunities Investment Tax Credit.
Charitable and Non-Profit Organizations:
The Ontario government promises to enhance funding by $148 million for charitable and non-profit social services organizations such as food banks, homeless shelters, churches and emergency services to improve their ability to respond to COVID-19, by providing funding directly to Consolidated Municipal Service Managers and District Social Service Administration Boards who would allocate this funding based on local needs.
Tax Relief and Other Financial Incentives:
The government's plan also includes measures that will make available $10 billion in support for people and businesses through tax and other deferrals to improve their cash flows over the coming months, including:
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making available $6 billion by providing five months of interest and penalty relief for businesses to file and make payments for the majority of provincially administered taxes;
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over $1.8 billion by deferring the upcoming June 30 quarterly municipal remittance of education property tax to school boards by 90 days, which will provide municipalities the flexibility to, in turn, provide property tax deferrals to residents and businesses, while ensuring school boards continue to receive their funding; and
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making available $1.9 billion by the Workplace Safety and Insurance Board (WSIB) allowing employers to defer payments for up to six months.
THE BIG BANKS:
The Bank of Montreal, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank and TD Bank have made a commitment to work with personal and small business banking customers on a case-by-case basis to provide flexible solutions to help them manage through challenges such as:
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pay disruption due to COVID-19;
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childcare disruption due to school closures; and
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those facing illness from COVID-19
This support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products.
More information is available here: Canada's Six Biggest Banks Take Decisive Action To Help Customers Impacted by COVID-19
https://cba.ca/canada-six-biggest-banks-take-decisive-action-to-help-customers-impacted-by-covid-19
