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May 19, 2020 COVID-19 Update - Canada Emergency Business Account and Canada Emergency Wage Subsidy

Today the federal government of Canada announced the following updates to the Canada Emergency Business Account (CEBA) and Canada Emergency Wage Subsidy (CEWS)

CEBA:

Until now, only those businesses with a payroll between $20,000 and $1.5 Million for the 2019 calendar year (as reported on their T4 2019 Summary) were eligible for the $40,000 CEBA loan (of which upto $10,000 is forgivable if repaid by December 31, 2022) provided by the Federal Government.

Today the Prime Minister announced that this loan will now be expanded to include sole-proprietors of businesses, businesses that rely on contractors, and those family-owned corporations that pay employees through dividends.

To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:

  • a business operating account at a participating financial institution
  • a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return.
  • eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.

More details on the program is to be made available shortly.

CEWS:

The Canada Emergency Wage Subsidy is a measure which was introduced by the Federal Government as part of their economic response to COVID-19 to subsidize upto 75% of an eligible employee's wages until June 6th, 2020.

Today, the Prime Minister announced that this program will now be extended to August 29th, 2020.

For more information on the above two programs, please contact either Ashwin or Vijay Sastry Kotamarti.

April 06, 2020 COVID-19 Update - Canada Emergency Response Benefit (CERB) for Individuals and Canada Emergency Business Account for Businesses Applications starting tomorrow

Today's update on the Federal Government's response to COVID-19 is about the Canada Emergency Response Benefit (CERB) for eligible individuals and the Canada Emergency Business Account for eligible businesses and not-for-profit organizations. Applications for both of these programs will be available starting tomorrow and further details are as follows:

CERB for Eligible Individuals

What is it:

The CERB is a taxable benefit of $2,000 to eligible workers who have lost their income due to COVID-19. This benefit would be paid every four weeks and will be available for upto 16 weeks.

Who is eligible to receive the Canada Emergency Response Benefit:

The CERB would cover Canadian workers:

  • Residing in Canada, who are at least 15 years old.
  • Who have stopped working because of COVID-19 and have not voluntarily quit their job.
  • Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application.
  • Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period; and for subsequent benefit periods, they expect to have no employment income.

How to apply for the Canada Emergency Response Benefit and when you can apply:

Prior to April 6, 2020, individuals who are without work and are eligible for EI can continue to apply for Employment Insurance.

Those who are eligible can apply from tomorrow i.e April 6, 2020 through the portal available through CRA My Account. Below is a link to CRA My Account:

https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html

Applications can also be made via an automated toll-free telephone line by calling 1-800-959-2019. To use this service, you will need to have the following information available:

  • your social insurance number (SIN)
  • postal code

CRA expects to receive a large volume of applications beginning tomorrow and so has provided the following best days to apply by the month of birth:

If you were born in the month of Apply for CERB on Your best day to apply
January, February or March Mondays 6-Apr
April, May, or June Tuesdays 7-Apr
July, August, or September Wednesdays 8-Apr
October, November, or December Thursdays 9-Apr
Any Month Fridays, Saturdays and Sundays Not applicable

When and how you will receive the money:

The CERB payments can be received via direct deposit or via cheque. To receive the payments by direct deposit, you will need to ensure that your direct deposit information is up to date with CRA which can be done through their CRA My Account or through your financial institution.

If you are registered to receive your payment through direct deposit, you should receive it within 3 business days of submitting your application; if you are going to receive it via cheque, you should expect to receive it within 10 business days of your application submission.

Canada Emergency Business Account for Businesses and Not-for-Profit Organizations:

Part of the federal government's response to the COVID-19 pandemic is providing access to a line of credit for businesses and not-for-profit organizations. One of these measures is the Canada Emergency Business Account which will become available to businesses and not-for-profit through their primary financial institution. Many of the financial institutions are opening their applications for this line of credit starting tomorrow.

What is it:

The Canada Emergency Business Account is a $40,000 interest-free loan to small businesses and not-for-profits which is repayable by December 31, 2022.

Who is eligible:

Eligible organizations are those that can demonstrate that they paid between $50,000 and $1 million in total payroll during 2019.

Please note that interested organizations should work with their financial institutions to obtain access to this measure as the terms may differ between each financial institution. Many of the large financial institutions are providing the following loan terms/requirements:

  • The business or not-for-profit organization is required to be a registered operating company in Canada
  • The financial institution with whom they are applying will need to be their primary bank i.e they must have an active business bank account with the institution on or before March 1, 2020 which they were using for day-to-day payments and cash management activities
  • The business or not-for-profit organization will need to provide its T4 Summary from 2019 to demonstrate that their total payroll for 2019 was between $50,000 and $1 Million.
  • There are no minimum monthly payments required until December 31, 2022. If the outstanding balance on the loan can be paid on or before this date, upto $10,000 will be forgiven.

If the loan is unable to be repaid by the business by this date, it can be converted into a 3 year term loan with an interest rate of 5%.

March 30, 2020 COVID-19 Update

Today the federal government of Canada announced the following measures to further support small businesses

  • Announced a 75 per cent wage subsidy for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. This will help businesses to retain and return workers to the payroll.
  • Allow businesses, including self-employed individuals, to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments as well as customs duties owed or imports. This will help businesses to continue to pay their employees and their expenses, and help ease cash-flow challenges across the country.
  • Launch the new Canada Emergency Business Account. This program will provide up to $25 billion to eligible financial institutions so they can provide interest-free loans to small businesses. These loans – guaranteed and funded by the Government of Canada – will ensure that small businesses have access to the capital they need, at a zero per cent interest rate, so they can pay for rent and other important costs over the next several months.
  • Launch the new Small and Medium-sized Enterprise Loan and Guarantee program that will enable up to $40 billion in lending, supported through Export Development Canada and Business Development Bank of Canada, and for guaranteed loans when small businesses go to their financial institutions to help weather the impacts of COVID-19. This is intended for small and medium-sized companies that require greater help to meet their operational cash flow requirements.

The above measures will allow small and medium businesses to continue to operate and also enable access to interest-free working capital loans so businesses can pay for rent and other important costs over the next few months.

March 26, 2020 COVID-19 - Federal Government introduces $82 billion stimulus package

The federal government has this morning released a federal stimulus package in the amount of $ 27 billion in direct support and an additional $55 billion liquidity support through the availability of tax deferrals (total $82 billion).

Some of the items highlighted in this package are:

  • Extension of income tax filing deadline for both individuals and businesses by one month i.e the individual tax returns deadline of April 30th has been extended to June 1st, 2020 and for corporations corresponding additional month from the filing deadline as existing. Also there will be an extension of time for payment of taxes due from April 30th to August 31st, 2020 without paying additional interest and/or penalties.?

Although the filing tax deadline has been extended to June 1, 2020, we would encourage you to still send us all your tax documents electronically via documents@vijaysastry.com so that we can compute your taxes and send you the forms to be signed electronically. This will enable you to receive any refund earlier than the filing deadline.

  • The introduction of an Emergency Care Benefit to provide funds every 2 weeks to workers who do not have EI coverage and have to stay home for 14 weeks for an amount comparable to Employment Insurance (EI)
  • The introduction of COVID 19 Emergency Support Benefit for self employed who have to stay at home or lose their businesses due to the virus or for people who lose their job and are not eligible for EI upto $ 900 for every two weeks, upto 15 weeks.
  • For individuals with lower income who are eligible for the Federal GST credit to receive upto $300 for adults and $150 for every child
  • For individuals with student loans, to receive a 6 months interest free moratorium on their Canada Student Loan
  • For families with young children, the Canada Child Benefit will be temporarily boosted in coming months
  • For employers, a wage subsidy equivalent to 10% of salary paid to employees for a period of 3 months to encourage to keep staff during this time.

We are working on providing you with a detailed list of relevant items introduced in this package and will be sharing it with you very shortly.

March 26, 2020 COVID-19 - Federal Government Stimulus Package

The federal government yesterday released a stimulus package in the amount of $ 27 billion in direct support and an additional $55 billion liquidity support through the availability of tax deferrals (total $82 billion). We are attaching a document herewith which outlines the details of the various relevant measures which are being provided.

Click here to Download PDF
March 26, 2020 COVID-19 - Videoconference/Teleconference

Premier Doug Ford announced the shutdown of all non-essential services across Ontario from midnight tonight for a minimum of 14 days in an effort to slow the spread of COVID-19.

The Premier's Office has also released a list of workplaces that are considered essential and therefore not affected by this shutdown.

March 26, 2020 COVID-19 - Emergency Response Benefit (replaces previously announced Emergency Care Benefit and Emergency Support Benefit)

Today's update on the Federal Government's response to COVID-19 is about the Canada Emergency Response Benefit (CERB), details of which are as follows:

The CERB is a taxable benefit of $2,000 which would be paid every four weeks and will be available for upto 4 months.

Please note that this benefit replaces the previously announced Emergency Care Benefit and Emergency Support Benefit.

Who are eligible to receive the Canada Emergency Response Benefit:

    The CERB would cover Canadians:

  • Who must stop working due to COVID-19 and do not have access to paid leave or other income suppor.
  • Who are sick or quarantined with COVID-1.
  • Who are taking care of someone who is sick with COVID-19.
  • Who are working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.
  • Wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).
  • Workers who are still employed, but are not receiving income because of disruptions to their work situation due to COVID-19. This would help businesses keep their employees as they navigate these difficult times, while ensuring they preserve the ability to quickly resume operations as soon as it becomes possible.

How to apply for the Canada Emergency Response Benefit and when you can apply:

Those who are eligible can apply as soon as the website/portal for accessing the CERB is ready. The government expects that the portal will be ready in early April. Applications can also be made via an automated telephone line or via a toll-free number.

When you will receive the money:

According to the federal government, Canadians would begin to receive their CERB payments within 10 days of application.

For further details and updates on this benefit, we encourage you to contact Canada Revenue Agency.

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