Canada Emergency Commercial Rent Assistance
Canada Emergency Commercial Rent Assistance was announced on April 27, 2020. The federal government has reached an agreement in principle, with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses.
This program will lower rent by 75 per cent for small businesses that have been affected by COVID-19.
The government provided the following details on the program:
- The program will provide forgivable loans to qualifying commercial property owners to cover 50 per cent of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.
- The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75 per cent for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25 per cent of the rent.
- Small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues.
- This support will also be available to non-profit and charitable organizations.
The Canada Emergency Wage Subsidy
What It Means for Canadian Businesses
It would provide a 75-per-cent wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020. This wage subsidy aims to prevent further job losses, encourage employers to re-hire workers previously laid off as a result of COVID-19, and help better position Canadian companies and other employers to more easily resume normal operations following the crisis.
Eligible employers would include individuals (sole Proprietors), taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities. This subsidy would be available to eligible employers that see a drop of at least 30 per cent of their revenue. In applying for the subsidy, employers would be required to attest to the decline in revenue. An employer’s revenue for this purpose would be its revenue from its business carried on in Canada earned from arm’s-length sources. Revenue would be calculated using the employer’s normal accounting method, and would exclude revenues from extraordinary items and amounts on account of capital.
Amount of Subsidy
The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be
- 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week
There would be no overall limit on the subsidy amount that an eligible employer may claim. Employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.
How to Apply
Eligible employers would be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly. Penalties may apply in cases of fraudulent claims.
Interaction with 10 per cent Wage Subsidy
On March 18, 2020, the Prime Minister announced a temporary 10 per cent wage subsidy. For employers that are not eligible for Canada Emergency Wage Subsidy the 10 per cent wage subsidy for a period, is still available.
Canada Emergency Business Account
To ensure that small businesses have access to the capital they need to see them through the current challenges, the Government of Canada is announcing the launch of the new Canada Emergency Business Account, which will be implemented by eligible financial institutions in cooperation with Export Development Canada (EDC).
This $25 billion program will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus.
This will better position them to quickly return to providing services to their communities and creating employment.
Small businesses and not-for-profits should contact their financial institution to apply for these loans.
To qualify, these organizations will need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).
CERB (Canada Emergency Response Benefit)
You will need a "My Account for individuals" with Canada Revenue Agency. If you do not have one, this is your first step.
Set up direct deposit once you have your account active.
- You will be able to apply online through the CRA April 6.
- It is retroactive to March 15
- Owners of incorporated businesses WILL also be able to apply for funds under the Canada Emergency Response Benefit (CERB).
- Once the portal is live employees will need to apply online. Until then, EI eligible Canadians who have lost their job can continue to apply for EI here, and will automatically be enrolled into CERB. This automatic enrollment also includes all Canadians who have already applied for EI or EI Sickness benefits since March 15, 2020.
- Best practices are that employers should carry on with issuing ROEs (these will be needed once CERB ends and employees need to file for EI if they are not coming back to your company). If you know for sure you will be rehiring the employee before or when the CERB ends then technically you do not have to formally lay them off, they can be furloughed and an ROE would not be needed. Being part of CERB will not affect the employees’ future filing for EI.
The benefit will be available to workers residing in Canada, who are at least 15 years old, and who:
- have earned at least $5,000 in 2019 or in the year prior to their application from any or a combination of the following sources: employment, self-employment, Employment Insurance maternity and parental benefits; and
- are without employment or self-employment income for at least 14 consecutive days in a four-week period, for reasons related to COVID-19, including if they have temporarily stopped working, lost their job, are sick or in quarantine, or need to care for a child or a family member. (Those who voluntarily choose to stay home are ineligible for the benefit).
Information received on the Canada Emergency Business Account
The new Canada Emergency Business Account will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.
To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.
Your financial institutions will have these lending requirements.
Wage Subsidy Clarification
Businesses and non-profit organizations seeing a drop of at least 30 per cent in revenue due to COVID-19. The government will cover up to 75% of a salary on the first $58,700, which could mean payments of up to $847 a week. These measures are retroactive to March 15.
In order to keep our staff and clients healthy and safe, our office will be closed to the public until further notice. Paperwork can be placed through the mail slot in the front door and will be quarantined for 3 days. Alternatively, you can scan and email or fax documents to us. We can have arrangements made to return your paperwork to you via mail, courier or scan and email.
To Our Monthly Clients.
At this time HST is still due on the regular due dates. This has not changed. We are still fully staffed and working to make sure these deadlines are being met. Please factor in that your paperwork will sit for 3 days before it is worked on, we will not be held liable for late filing if your work is not here in time to prepare. Payments can be made via e-transfer or you can post a cheque through the door or mail it to us.
To Our Payroll Clients
At this time payroll remittance is still due on the regular due date. This has not changed. Please email or call in your hours to the payroll department as usual. We are still working and we will continue to get your information to you in a timely manner.
To Our Tax Clients
Personal tax returns are still being prepared. We are asking that when you drop your paperwork through the door, that it is in a sealed envelope with your name and phone number on the outside. Once the 3 days is up, someone from the office will call you to verify information with you. It will be prepared in the usual manner and you will be called once it is ready. Our staff are available to do a phone review with you and we can scan and email signature papers. Payments can be made via e-transfer or cheque through the door.
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