The Government of Canada has responded to the economic impacts of the COVID-19 pandemic by enacting new financial benefits and support for business owners and taxpayers during these unprecedented times. Blueprint Accounting is continuing to monitor the measures that have been announced to help businesses keep their workers, access credit, and adjust their business tax filings.
We are committed to helping Canadian business owners and taxpayers access the benefits and support they need and will continue to offer updates and advice as the situation evolves. Now more than ever, it’s important for businesses to establish a financial blueprint for the next three to six months so that they can emerge strong once the COVID-19 pandemic has passed—and it will pass.
Navigating the complexities of the government’s fiscal stimulus and tax deferral plan is challenging as details are constantly evolving. As bookkeeping and accounting professionals, it’s our job to keep track of this stuff, so below we’ve compiled a quick summary of the benefits and support systems that may apply to you and your business.
COVID-19 ECONOMIC RESPONSE PLAN
COVID-19 benefits and services issued by the Government of Canada include measures to address the needs of Canadian individuals and businesses. Most benefits can be applied for via CRA My Account and My Service Canada Account.
BENEFITS AND SUPPORT FOR INDIVIDUALS
Due to economic downturn, illness, or the need to care for others, many Canadian workers are experiencing interruptions to their regular employment that impact their cash flow and their ability to meet their basic needs.
For those facing UNEMPLOYMENT, the government has:
- Improved access to Employment Insurance (EI) by waiving the one-week waiting period. Those laid off due to a COVID-19 shutdown will need a notice of layoff and a Record of Employment (ROE).
- Introduced the Emergency Support Benefit specifically for workers who are not eligible for EI who face unemployment. The Emergency Support Benefit is intended to provide long-term income support; however, details of how much money workers will receive or for how long has yet to be announced.
For those who are SICK, QUARANTINED, OR CARING FOR INDIVIDUALS WHO ARE, the government has:
- Waived the one-week waiting period for quarantined individuals who are eligible for EI sickness benefits as well as the need to provide a medical certificate. EI sickness benefits provide up to 15 weeks of income replacement.
- Provided Temporary Income Support through the Emergency Care Benefit. The benefit applies to workers, including the self-employed, who are sick or quarantined and do not have sick leave. The benefit will provide up to $900 bi-weekly for a period of up to 15 weeks.
For those CARING FOR CHILDREN the government has:
- Provided the Emergency Care Benefit, which applies not only to those who are sick but to those who must stay home from work in order to care for children during school closures or for family members (e.g.: elderly parents) who have COVID-19 and require care.
- Increased the maximum annual Canada Child Benefit (CCB) payment amounts for the 2019-2020 payment year by $300 per child, starting in May.
For LOW-INCOME INDIVIDUALS and those paying off STUDENT LOANS, the government has:
- Issued a special one-time payment through the Goods and Services Tax Credit (GSTC). This payment, available to those who already receive quarterly GST credits, will boost payments to approximately $400 for individuals and $600 for couples. Payments will be issued in early May.
- Deferred Canada Student Loan and Canada Apprentice Loan payments. Beginning on March 30, 2020, all individuals currently repaying loans will receive an interest-free moratorium on amounts owed until September 30, 2020.
Personal tax filing deadlines: Personal income tax filing has been deferred to June 1, 2020. Those who expect to receive either the GSTC or CCB are encouraged to file on time to ensure that they receive these entitlements.
Payment of amounts owing will be deferred to September 2020, with relief applying to tax balances as well as instalments. No interest or penalties will be incurred between March 18, 2020 and August 31, 2020.
BENEFITS AND SUPPORT FOR BUSINESSES
Social distancing and self-isolation have impacted businesses, large and small, across the country. While some are able to maintain operations by implementing work-from-home policies, others face total shutdown and losses of income that threaten their ability to keep workers employed and operations afloat.
For businesses STRUGGLING TO RETAIN EMPLOYEES, the government has:
- Provided a three-month Temporary Wage Subsidy for small businesses equal to 10% of remuneration paid during that time to a maximum of $1,375 per employee and $25,000 per employer. Businesses can benefit immediately be reducing their income tax remittances. Those eligible include are corporations that receive the small business deduction as well as non-profits and charities.
- Extended the eligibility of EI Work-Sharing agreements to 76 weeks, eased eligibility requirements, and streamlined applications. The Work-Sharing Program provides EI benefits to workers who make an agreement with their employer to reduce their regular working hours.
For businesses that NEED CREDIT OR FINANCING, the government has:
- Established the Business Credit Availability Program (BCAP) that gives businesses access to short-term funding via loans from the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Businesses must contact their financial institutions, which can then refer them to the BDC or EDC.
- Some municipal and provincial governments have instituted land and property tax deferments to assist business owners.
Business tax filing deadlines: Businesses can defer payment of income tax amounts that becoming owing AND tax installment payments that become due between March 18, 2020, and August 31, 2020 until September 2020. No interest will be accumulated during this period.
GST/HST filing deadlines appear unchanged; however, the Canada Revenue Agency will temporarily suspend post assessment GST/HST and income tax audits on small and medium businesses.
MORTGAGES AND DEBT RELIEF
The Canada Mortgage and Housing Corporation (CMHC) has permitted lenders to allow payment deferrals on homeowner CMHC-insured mortgage loans. Canadian banks have stated their commitment to helping their customers manage financial hardship during the COVID-19 pandemic by offering deferrals of up to six months on mortgage payments or other credit products; however, relief is offered on a case-by-case basis.
BLUEPRINT’S COMMITMENT TO HELP
Many of the small and medium businesses, entrepreneurs and consultants we serve are wondering how to maintain not only their personal health but the health of their businesses and, by extension, their employees during these difficult times.
Blueprint will do everything we can to ensure that businesses have the accurate and up-to-date bookkeeping and financial records they need in order to speed their applications for benefits, financing, and lines of credit.
For businesses struggling to implement the Temporary Wage Subsidy or produce documentation (such as Records of Employment—ROEs) for their workers, we are here to help you do so as fast as possible.
Blueprint is also offering current clients free short-term cash flow forecasting for business owners to make well-informed decisions in the days ahead. Contact us to schedule a cash flow forecasting session