On March 27, 2020 the Prime Minister and the Minister of Finance announced additional measures to support small businesses dealing with the economic impact of the pandemic. These measures will help Canadian businesses protect the jobs that Canadians depend on and pay their workers and bills during these difficult times.
Temporary Wage Subsidy
The subsidy for qualifying businesses was increased to 75% from 10% retroactive to March 15, 2020. More details on eligibility criteria will start with the impact of COVID-19 on sales and will be shared before the end of the month.
Deferral of Sales Tax Remittance
Payments for GST/HST have been deferred until June 30, 2020 for the following:
- Monthly filers required to remit amounts collected for the February, March and April 2020 reporting periods;
- Quarterly filers required to remit amounts collected for the reporting period of January 1, 2020 to March 31, 2020;
- Annual filers, whose GST/HST return or installments are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and installments of GST/HST in respect of the filer’s current fiscal year.
New Loan Programs for Businesses
Canada Emergency Business Account
This program will be implemented by eligible financial institutions in cooperation with Export Development Canada (EDC) and will ensure businesses have the capital needed to weather the current pandemic. This program will provide interest-free loans of up to $40,000 to small businesses and not-for-profits to help cover operating costs. To qualify, organizations will need to demonstrate that they paid between $50,000 and $1 million in total payroll in 2019. Repayment of the loan on or before December 31, 2022 will result in a loan forgiveness of 25 percent (up to $10,000). Small businesses and not-for-profits should contact their financial institution to apply for these loans.
A New Loan Guarantee for Small and Medium Enterprises (SMEs)
To support the operations of SMEs, the EDC will guarantee new operating credit and cash flow term loans that financial institutions extend to SMEs, up to $6.25 million.
A New Co-Lending Program for Small and Medium Enterprises
The Business Development Bank of Canada (BDC) and financial institutions will co-lend loans to SMEs to support their operations and cash flow needs. Eligible businesses may obtain incremental credit amounts up to $6.25 million.
Additional Measures for Individuals and Business
Administrative income tax actions required of taxpayers by the Canada Revenue Agency (CRA) that come due after March 18, 2020 can be deferred to June 1, 2020. This includes returns, elections, designations and information requests. It’s important to note that payroll deductions payments and related filings are excluded.
Trusts, Partnerships and NR4 Information Returns
The deadlines for these filings have all been extended to May 1, 2020.
T1135 Foreign Income Verification
T1135s filed with individual tax returns are due June 1, 2010 and June 15, 2020 for individuals who are self-employed.
T1135s filed with a trust with a December 31, 2019 taxation year end are due May 1, 2020.
Extended deadline for filing an objection
Any notice of objection due March 18, 2020 or later has been effectively extended to June 30, 2020.
Further details on these and other measures can be found here:
If you have any questions or require assistance, please contact your McCay Duff advisor.
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