COVID-19 Benefits and Services

Given that the COVID-19 pandemic’s impact on the Canadian economy has surpassed one full year, the CRA has made some changes for the final periods to ensure the general approach continues to calculate an organization’s decline in revenues relative to a pre-pandemic month. This means that the general approach will compare revenues to the corresponding month in 2019, not 2020. Thus, the calculations of the revenue decline for Periods 17 to 21 are as follows:

The reference periods for the CEWS Periods 17 to 21 are as follows:

Important Reminders

• CEWS is taxable
• Reduces eligible remuneration expenses for investment tax credits such as SR&ED claims and film & media credits.

The deadline for the CEWS application is 180 days after the end of the last day of the respective period. For example, applications for Period 17 (June 6th to July 3rd) will expire on December 30, 2021. There is no ability to apply for an extension to the application deadline.

 For more information on the Canada Emergency Wage Subsidy, please visit: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html

The Temporary Wage Subsidy exists for those Eligible Employers that do not qualify for the Canada Emergency Wage Subsidy.

The Temporary Subsidy still exists for those Eligible Employers that do not qualify for the Canada Emergency Wage Subsidy.

Eligible Employers include:

• A Canadian-controlled private corporation (CCPC) eligible for the $500,000 small business deduction;
• Sole proprietorships and Partnerships of either CCPCs or individuals; and
• A non-profit organization or a registered charity (note: Labour organizations are not included).

The amount of the Temporary Subsidy is 10% of remuneration paid from March 18, 2020 to June 20, 2020, subject to maximums of $1,375 per employee and $25,000 per employer.

This Temporary Subsidy only applies to reduce federal or provincial income (except Quebec) tax withholding. It does not apply to reduce CPP and EI premiums.

Associated CCPCs are not required to share the maximum Temporary Subsidy of $25,000 per employer. 

Please note, an Employer is not allowed to “double dip” between the Canadian Emergency Wage Subsidy and the Temporary Wage Amount Subsidy. If you claim the Temporary Subsidy, then you must reduce the amount of the Canadian Emergency Wage Subsidy by the amount claimed by this Temporary Subsidy.

For more information on the 10% Temporary Wage Subsidy, please visit: 

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html

The Canada Emergency Business Account (CEBA) will provide interest-free loans of up to $60,000 to small businesses and not-for-profits. On March 23, 2021 the federal government announced that the application deadline for CEBA will be extended to June 30, 2021.

Loan Details

• 0% interest until December 31, 2022.
• No principal payments required until December 31, 2022, however can be voluntarily repaid at any time without fees or penalties.
• 25% of the first $40,000, and 50% of the additional $20,000 may be forgiven if repaid by December 31, 2022.

Eligibility

• Borrower is a Canadian operating business, sole proprietor or non-profit with operations as of March 1, 2020.
• Borrower has an active business chequing account with their primarily bank or credit union that was opened prior to March 1, 2020.
• Borrower’s total employment income (T4) paid in 2019 is between $20,000 and $1,500,000.
• Borrower’s that pay dividends instead that have payroll lower than $20,000 must meet the following criteria:

1. • Have a business operating account at a participating financial institution.
   • Have a Canada Revenue Agency business number (GST, Import/Export, or RZ account number) and have filed a 2018 or 2019 tax return.
   • Have eligible non-deferrable expenses of between $40,000 and $1.5 million. Eligible non-deferrable expenses include costs such as rent, property taxes, utilities, and insurance.

The following businesses are not eligible for the Canada Emergency Business Account:

• Government organizations or bodies, or entities owned by a government organization or body.
• Unions, charitable, religious or fraternal organizations or entities owned by government organizations or bodies. Or if it is, it is a registered T2 or T3010 corporation that generates a portion of its revenue from the sales of goods or services.
• Entities that are structured as a holding company.
• Entities owned by individuals holding political office.
• Entities that promote violence, incite hatred or discriminate on the basis of sex, gender, sexual orientation, race, ethnicity, religion, culture, region, education, age or mental or physical disability.

Use of Funds

CEBA funds shall only be used by the Borrower to pay non-deferrable operating expenses of the Borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service.

Funds are not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.

Expenses will be subject to verification and audit. The list of eligible expenses does not include dividends/distributions to owners as these would probably be considered deferrable.

Application and Deadline

Small business, sole proprietors and non-profits should apply directly with their bank or credit union.  The application deadline for CEBA has been extended to June 30, 2021.

For more information on the Canada Emergency Business Account, please visit: https://ceba-cuec.ca/

Similarly to the CEWS, the CERS program will is be extended until October 23^rd. Only employers with declines of more than 10% will qualify as of July 4th.

The CERS will be calculated as follows:

Important Reminder

The deadline for the CERS application is 180 days after the end of the last day of the respective period. For example, applications for Period 10 (June 6th to July 3rd) will expire on December 30, 2021. There is no ability to apply for an extension to the application deadline.

For more information please visit: https://www.canada.ca/en/department-finance/news/2020/11/canada-emergency-rent-subsidy.html

The Federal Government announced the details of the Canada Emergency Commercial Rent Assistance (“CECRA”):

• Landlords and property owners will be given forgivable loans equal to 50% of the rent for eligible businesses.
• The Government will forgive these loans if:
  Landlords reduce the monthly rent payable by the tenants by 75% (Government provides for the 50% as loan forgiveness and 25% will be “covered” by the landlord). Tenants will be responsible for the remaining 25%.
  Landlords agree not to evict tenants during this time.
• CECRA covers the monthly rents for April (retroactive), May, and June, 2020. If you qualify for April to June period, then you are automatically qualified for July and August 2020.
• Rent must be less than $50,000 per month.
• Eligible businesses include small businesses, non-profits, and charities that have a 70% decrease in “pre-COVID-19” revenues. The revenue decline test appears to be similar to the revenue test in the CEWS.
• The application process will be administered by the Canada Mortgage and Housing Corp (CMHC). You can apply here.  It is the responsibility of the landlords to apply for this program.

The CRHP will cover as much as 50% of the incremental pay to workers (through higher wages, more hours, or more workers) for the period of June 6th to November 20th for Canadian Controlled Private Corporations (CCPCs), non-profit organizations, registered charities, individuals, and certain partnerships.

The CRHP is extended until May 7, 2022, with the ability to extend it further to July 2, 2022 through regulations.

The CRHP subsidy is calculated as follows:

An Eligible Employer would need to have declines in revenue sufficient to qualify for the CEWS in that period.  These declines would have to be more than:

• 0% for the periods between June 6^th and July 3^rd
• 10% for the periods between July 4^th and November 20^th

The Reference Periods will be similar to those in the CEWS Program.

Important Reminders

The deadline for the CRHP application is 180 days after the end of the last day of the respective period. For example, applications for Period 17 (June 6th to July 3rd) will expire on December 30, 2021. There is no ability to apply for an extension to the application deadline.

The Canada United Small Business Relief Fund (CUSBRF) is providing eligible businesses up to $5,000 to help reimburse costs incurred after March 15, 2020 because of COVID-19.

There are three categories of purchases which are eligible for reimbursement under this program:

• Purchase of Personal Protective Equipment (PPE);
• Renovation of space to adhere to re-opening guidelines; and
• Enhancement of website/ developing e-commerce capability.

This grant is available to both For-Profit and Not-For-Profit organizations. Government organizations, municipalities, charities, and the chamber of commerce network are not eligible to apply.

Applicants must meet certain requirements such as:

• no more than 75 employees;
• annual sales between $150,000 and $3,000,000;
• are incorporated or operating as a sole proprietorship/partnership in Canada as of March 1, 2020;
• maintain $1,000,0000 of commercial general liability insurance;
• be in operation after September 1, 2020.

The CUSBRF is being managed by the Ontario Chamber of Commerce, but is open to all eligible organizations across Canada. For more information, including the complete list of requirements and a link to the application form, please visit: https://occ.ca/wp-content/uploads/Canada-United-Program-Guidelines-EN.pdf

Note: Applications are closed for businesses located in B.C. 

Small to Medium Sized Business Recovery Grant

The Province of British Columbia is providing eligible businesses between $10,000 to $30,000 depending on their revenue loss as a result of COVID-19. An additional $5,000 to $10,000 may be available for certain tourism-related businesses.

Applicants must meet certain requirements such as:

• the majority of the business is owned by one or more BC residents;
• the business is currently operating;
• operating for at least three years prior to March 10, 2020;
• employs between two and 149 people in BC for at least four months of the calendar year;
• experienced a revenue loss of at least 70% during March and April of 2020;
• continues to earn 50% or less of pre-COVID revenue levels;
• has and maintains a payroll account number with the Canada Revenue Agency.

The grants are available until August 31, 2021 or until the reserved funds (up to $300 million) are fully distributed.

For more information, including the complete list of requirements and a link to the application form, please visit: https://www2.gov.bc.ca/gov/content/economic-recovery/business-recovery-grant

The Government of B.C. has announced a number of provincial services, including tax payment deferrals, delays and reductions. 

 The following provincial taxes have been deferred, delayed or reduced:

• Deferred Tax Payments for Businesses
• Delayed PST Budget 2020 Tax Changes
• Delayed Carbon Tax Increase
• Reduced School Tax for Businesses

Tax Payments

The BC Government has deferred the following tax payments for business until September 30, 2020:

• Employer Health Tax
• PST (including municipal and regional district taxes on accommodations)
• Motor fuel tax
• Tobacco tax

School Tax

BC’s COVID-19 Action Plan originally announced that the School Property Tax rates for commercial properties (Class 4, 5, and 6) will be reduced by 50% for the 2020 year.  The BC Government announced a further reduction of the School Property Tax and introduced an equivalent for Class 7 and 8 properties.  This will reduce the overall commercial property taxes for most business by up to 25% for the 2020 year.

Further, the BC Government postponed the date that late payment penalties apply for commercial properties for Classes, 4, 5, 6, 7, and 9 to October 31, 2020.  This will give businesses and landlords more time to pay their reduced property tax without penalties.

For more information on the B.C. provincial tax relief measures for businesses in B.C., please visit: https://www2.gov.bc.ca/gov/content/taxes/tax-changes/covid-19-tax-changes

The government has announced a number of changes to business taxes, GST/HST and duty payments.

Businesses can defer the payment of any income tax amounts that become owing on or after March 18 and before October 2020 until September 30, 2020.  This relief would apply to tax balances due, as well as installments, under Part I of the Income Tax Act.  No interest or penalties will accumulate on these amounts during this period.  Corporations that would otherwise have a filing deadline in June, July or August 2020 are now due by September 30, 2020.

Businesses, including self-employed individuals, can defer payments of the GST/HST and customs duty until June 30, 2020. No interest or penalties will accumulate on these amounts during this period. The deadline to file GST returns has not changed.

For more information about income tax payment dates, please visit: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html

For more information on the deferral of GST/HST tax remittances, please visit: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-gst-hst.html

The Government announced changes to the Canada Summer Jobs program.

Businesses can get a 100% subsidy (formerly 50%) of the minimum wage paid for student workers under the Canada Summer Jobs program.  Further, the program will now be extended to February 2021.   The Government is considering on whether the application process will be reopened to allow new employers to apply.  

GST/HST On Face Masks And Shields

Effective December 6, 2020, the GST will be reduced to 0% on certain face masks (medical and non-medical) and face shields.

GST/HST On Digital Services

Foreign based vendors that sell digital products to Canadians will be required to register for, collect, and remit GST/HST on the taxable sales to Canadians effective July 1, 2021. This will include video and music streaming, online video gaming, and mobile apps.

GST/HST On Fulfillment Warehouses

Foreign based vendors will be required to charge GST/HST on sales to Canadians for goods that are sold using Canadian fulfillment warehouses. This will also be effective July 1, 2021.

GST/HST On Short-Term Accommodation Through Digital Platforms

Platforms will be required to charge GST/HST on sales using platform-based short-term rental accommodations supplied in Canada. This will also be effective July 1, 2021.

The Tourism and Hospitality Recovery Program would provide support through wage and rent subsidies with a subsidy rate of up to 75%. The types of business that would be eligible are detailed in the proposed legislation and in the backgrounder. Examples include hotels, tour operators, travel agencies, and restaurants.

To qualify, the organization must have current revenue decline of at least 40% and an average monthly decline of 40% for the first 13 qualifying periods for CEWS. The calculations for the revenue declines are the same as those in the existing CEWS rules.

The wage and rent subsidies would be calculated as:

Lockdown Support would be available based on the current fixed rate of 25%.  As under existing rules, pro-rated based on the number of days a particular location was affected by a lockdown.

The Hardest-Hit Business Recovery Program would provide support through wage and rent subsidies to other businesses that have faced deep losses, with a subsidy rate of up to 50%.

To qualify, the organization must have current revenue decline of at least 50% and an average monthly decline of 50% for the first 13 qualifying periods for CEWS.  The calculations for the revenue declines are the same as those in the existing CEWS rules.

The wage and rent subsidies would be calculated as:

Lockdown Support would be available based on the current fixed rate of 25%.  As under existing rules, pro-rated based on the number of days a particular location was affected by a lockdown.

Organizations subject to a qualifying public health restriction, regardless of sector, may be eligible for the Local Lockdown Program. Businesses that have a location subject to a public health restriction for at least seven days in the current claim period may be eligible for this support at the same subsidy rates available under the Tourism and Hospitality Recovery Program.

To qualify, the public health restriction must cause the business to cease activities that accounted for at least approximately 25% of their total revenues during the prior reference period. Applicants would not need to demonstrate a 12-month revenue decline to receive this support.

The CERB provides financial support to employed and self-employed Canadians who are directly affected by COVID-19.

It provides a payment of $2,000 for a 4-week period (the same as $500 a week) for up to 24 weeks.

Eligibility Criteria

To be eligible, you must meet the following requirements:

You did not apply for, nor receive, CERB or EI benefits from Service Canada for the same eligibility period

You have not quit your job voluntarily

You reside in Canada

You are 15 years old or more when you apply

You can earn up to $1,000 per month while collecting the CERB.

The CERB has been extended to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.

The CERB has been extended to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.

Application

There are two ways to apply:

Online with CRA My Account: https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html 

Over the phone with an automated phone service: 1-800-959-2019

After you apply, you should get your payment in 3 business days if you signed up for direct deposit. If you haven’t, you should get it in about 10 business days.

For more information on eligibility and how to apply, please visit: https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html 

Employees working from home in 2020 due to COVID-19 will be allowed to claim expenses up to $400, based on the amount of time working from home, without the need to track detailed expenses. Nor will they be required to have a signed Form T2200.

The Government announced a temporary support totaling up to $1,200 in 2021 for each child under the age of 6 for families who are entitled to the Canada Child Benefit (CCB).

Families with net income at or below $120,000 will receive four tax-free payments of $300 per child under the age of 6 years. Families entitled to CCB with net income above $120,000 will receive four tax-free payments of $150 per child under the age of 6 years. These payments will start shortly after legislation is approved, then in April, July, and October 2021.

Further to comments in previous budgets, the Government has proposed the following changes to employment stock option rules:

• A $200,000 annual limit will apply on employee stock options grants that can qualify for the stock option deduction granted on or after July 1, 2021.
• Canadian Controlled Private Corporations (CCPCs) and some-non CCPCs (start-ups, emerging companies, and employers with annual gross revenues of $500 million or less) will be not subject to this new limit.

The Government of Canada is providing up to an extra $300 per child through the Canada Child Benefit (CCB) for 2019-20. This automatic benefit will be delivered as part of the scheduled CCB payment in May. Those who already receive the CCB do not need to re-apply.

For more information on the Canada Child Benefit please visit: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview/canada-child-benefit-apply.html 

The Federal Government announced updates to the tax deadlines for Canadians.

The Federal Government announced the following measures in regards to the tax deadlines for Canadians.

The tax filing deadlines have been extended:

• Personal: extended to June 1, 2020 (previously April 30th), the CRA has also confirmed that they will not apply penalties and interest on personal tax returns filed between June 2, 2020 and September 30, 2020.
• Trusts: extended to May 1, 2020 (previously March 30th)
• Corporate: Corporations that would otherwise have a filing deadline in June, July or August 2020 are now due by September 30, 2020.

Tax payments and installments have been extended:

• Personal: extended to September 30, 2020
• Corporate: extended to September 30, 2020

Note: There will be no penalties or interest charged on any payments not made during that period. 

If you are a personal tax client, please submit your personal tax information as soon as possible. You can find our 2019 Personal Tax Checklist here. We encourage you to get your information in to us now and choose to interact with our team using our online tools.

The B.C. Emergency Benefit for Workers will provide a one-time $1,000 payment to people whose ability to work has been affected due to COVID-19.

To be eligible for the BC Emergency Benefit, you must:

• Been a resident of BC on March 15, 2020
• Be at least 15 years old on the date you apply
• Meet the eligibility requirements for the Canada Emergency Response Benefit (CERB)
• Have been approved to receive the CERB (even if you haven’t received the payment)
• Have filed, or will agree to file, a 2019 BC income tax return
• Not receiving provincial income assistance or disability assistance

On-line applications for the one-time payment will begin on May 1st.  Phone applications start on May 4th. 

Benefits will only be paid by direct deposit.  

For more information on the B.C. Emergency Benefit for Workers, please visit: https://www2.gov.bc.ca/gov/content/employment-business/covid-19-financial-supports/emergency-benefit-workers

• BC Housing has temporarily suspended evictions of tenants in subsidized and affordable housing due to non-payment of rent.
• A temporary rent subsidy will provide up to $500 per month for April to August paid directly to landlords. Applications can be made on the BC Housing website. Tenants that could not previously pay their rent to their landlords will be required to start paying this amount back starting September 1^st based on a set Rent Repayment Plan.
• Starting March 30, 2020, B.C. student loan payments are automatically frozen for six months.

BC Recovery Benefit

The BC Government released a new benefit of up to $1,000 for eligible families and single parents, and up to $500 for eligible individuals.  The benefit is reduced with net income higher than $125,000 (families and single parents) and $62,500 (individuals).

You are required to apply for this benefit by June 30, 2021.  For more information, please visit: https://www2.gov.bc.ca/gov/content/economic-recovery/recovery-benefit

BC Hydro

• Customers can defer bill payments or arrange for flexible payment plans with no penalty through the COVID-19 Customer Assistance Program
• Customers experiencing job loss, illness or lost wages due to COVID-19 can access grants up to $600 to pay their hydro bills through the Customer Crisis Fund

ICBC

• Customers on a monthly payment plan who are facing financial challenges due to COVID-19 may defer their payment for up to 90 days with no penalty

GST/HST On Face Masks And Shields

Effective December 6, 2020, the GST will be reduced to 0% on certain face masks (medical and non-medical) and face shields.

GST/HST On Digital Services

Foreign based vendors that sell digital products to Canadians will be required to register for, collect, and remit GST/HST on the taxable sales to Canadians effective July 1, 2021. This will include video and music streaming, online video gaming, and mobile apps.

GST/HST On Fulfillment Warehouses

Foreign based vendors will be required to charge GST/HST on sales to Canadians for goods that are sold using Canadian fulfillment warehouses. This will also be effective July 1, 2021.

GST/HST On Short-Term Accommodation Through Digital Platforms

Platforms will be required to charge GST/HST on sales using platform-based short-term rental accommodations supplied in Canada. This will also be effective July 1, 2021.