As business owners, it’s hard to prepare for what we can’t see coming. We may have been meticulous about insurance and even saving for a rainy day, but just a couple short weeks ago, few would have seen what was in store: the mandatory closures of businesses, mass layoffs and, in many instances, the potential for reduced or even no revenue for weeks or months to come.
If you are a business owner, here is some information on the benefits and resource that may be available to you.
Enhanced work-sharing programs
One way to help reduce layoffs of employees is to institute work-sharing. If you are facing a reduction of business activities, your employees may be able to access government benefits like Employment Insurance even while working a reduced work week to help them maintain an adequate level of pay. The federal government has extended this plan to a total of 76 weeks and has waived the waiting period for employees to access benefits.
Increased access to credit and financing
Through the Business Development Bank of Canada (BDC), a new business credit program will make loans available to small- and medium-sized businesses who need to borrow to keep operating. The Export Development Canada (EDC) also has the Business Credit Availability Program (BCAP), available now, which offers operating credit of up to $6.25 million to eligible businesses to help with short-term liquidity. On March 27, the federal government announced the Canada Emergency Business Account (CEBA) would guarantee a loan of up to $40,000 for qualifying businesses. The loan would be interest-free for the first year, and as much as $10,000 may be forgivable. Businesses should contact their financial institutions to find out how they can access these and other federal government COVID-19 relief programs.
Wage subsidies for small and medium-sized businesses
The government is supporting small- and medium-sized businesses by subsidizing up to 75% of an employee’s wages for the next three months. The subsidy maxes out at $847 per week per employee and is retroactive to March 15th.
Tax payment deferral
The tax filing deadline remains unchanged for corporations. However, if you owe taxes, the deadline for payment has been extended to September 1, 2020. That includes installments, penalties and interest: all of which are being waived as long as payments are made by that date.
On March 27, the government also announced that GST and HST payments for small- and medium-sized businesses will be deferred until June.
Canada Emergency Response Benefit
For freelancers or other business owners who may not be eligible for Employment Insurance and who are facing a downturn in their business, the government has introduced the Canada Emergency Response Benefit. It provides workers who have lost their jobs or can’t work due to COVID-19 disruption with $2,000 per month for up to four months. Applications will be available in April and can be completed online. The benefit will be eligible to salaried, contract and self-employed workers, as well as those who are sick, in quarantine, caring for someone who is ill or taking care of a child due to school closures. They will be able to receive the benefit regardless of whether they are eligible for traditional Employment Insurance.
You may also qualify for mortgage and loan deferrals through your lender. To learn more about your options, contact your financial provider and look for further information from the Government of Canada’s website. All levels of government continue to monitor the impact that the COVID-19 pandemic is having on businesses and may continue to adjust or offer additional aid.
Updated March 27, 2020