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A guide to COVID-19 financial relief for small business

Last updated: Oct. 8, 2021 

Last updated August 10, 2020. We will update blog posts when more information is released.

As we finished writing the introduction to this blog post, several provinces were starting to recover and re-open their economies.

It’s heartwarming to see businesses across the country hiring back their employees through government programs, reopening doors while following public health guidelines, and in many cases, pivoting their goods and services to serve new demands that have popped up since the pandemic was declared.

It’s a glimpse of good news for the small businesses and agricultural producers that have been hit hard by the COVID-19 outbreak.

While the next several months will be challenging, the federal government continues to announce new programs, or modify existing programs, to help small business owners recover from the economic impact of the crisis.

To help you keep track of all the announcements, this blog post will always contain the most up-to-date information about new financial relief measures and programs that help small businesses impacted by COVID-19. You’ll also find videos and links to free tools to help you with program applications.

Read our overview of federal relief measures and programs below.

Temporary Income Support

The government waived the 1-week waiting period to claim Employment Insurance (EI) sickness benefits. They’re also priority processing EI sickness claims for people under quarantine and waiving the medical certificate requirement to access EI sickness benefits.

For workers who must stay home and don’t have access to paid sick leave, they’ve introduced the Canada Emergency Response Benefit.

The benefit will provide $2,000 a month for the next four months to workers who have lost their income due to COVID-19.

The CRA will administer the flat-payment benefit and provide support to individuals who:

  • Have stopped or will stop working because of COVID-19
  • Are in quarantine or sick due to COVID-19, or away from work to take care of others who are in quarantine or sick due to COVID-19
  • Have had $5,000 in employment income, self-employment income, or maternity or parental leave benefits for 2019 or in the 12-month period preceding the day they make the application

Click here for full eligibility details and how to apply.

Filing Deadline Extensions

The CRA extended tax filing deadlines, and payment deadlines, to provide some short-term relief during this time.

Watch our video for an overview:

The CRA will allow all businesses to defer filing their T2 corporation income tax returns otherwise due in June, July or August, to September 1, 2020.

If your corporation has a year-end of September 18th to December 30th, you now have until September 1, 2020 to file.

Payment Deadline Extensions

The payment deadline for most taxpayers (individuals, trusts and corporations) was extended to Sept. 30. This measure applies to income tax balances and instalments.

The CRA won’t charge you penalties and interest as long as you pay by the extended deadline of Sept. 30. This relief includes the late-filing penalty provided you file the return by Sept. 30.

Changes to RRIFs

The government is proposing to reduce the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on seniors’ retirement savings.

This would provide flexibility to seniors concerned they may have to liquidate their RRIF assets to meet minimum withdrawal requirements.

Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.

Canada Emergency Wage Subsidy

The Canada Emergency Wage Subsidy is a program you can use to keep your employees on payroll during the COVID-19 pandemic.

The taxable benefit provides a wage subsidy of up to 75% for qualifying businesses for up to 24 weeks.

The subsidy will be up to 75% of the first $58,700 of an employee’s pre-crisis remuneration. This equates to a maximum subsidy for a given employee of $847 per week.

You can apply for The Canada Emergency Wage Subsidy online, and up to the beginning of October. You’ll receive the money in a direct deposit, which you can transfer to your employees as part of their wages.

Find out how the subsidy will help you as a business owner:

This program co-exists with the temporary wage subsidy, another program that allows you to reduce payroll deductions you must remit to the CRA.

If you use the temporary wage subsidy, you must reduce the amount you claim on the 75% wage subsidy.

Federal Temporary Wage Subsidy

The temporary wage subsidy allows you to reduce payroll deductions you must remit to the CRA for a 3-month period.

You can take advantage of this program right away, giving you temporary access to cash flow during this time.

No application is required – all you do is calculate the deduction and reduce your current payroll remittance.

Watch our video for a summary:

The subsidy is equal to 10% of the wages you pay, up to $1,375 for each eligible employee to a maximum of $25,000 total per employer.

If you use the temporary wage subsidy, it will reduce the amount you can claim on the 75% subsidy, so be careful if you’re claiming both.

Canada Emergency Business Account

The Canada Emergency Business Account provided up to $60,000 in interest-free loans to small businesses.

The loan can be used to cover operating costs such as payroll, rent, utilities, insurance, property tax and regularly scheduled debt service.

The loan can’t be used for payments or expenses such as the repayment/refinancing of existing debt, payments of dividends, distributions and increases in management compensation.

The loan is now interest-free until December 31st, 2023. And up to $20,000 of the loan could be forgiven if you repay it by then. The forgivable portion of the loan will be considered taxable income in the year it was forgiven.

Applications are no longer being accepted for this loan.

Canada Summer Jobs Program

The federal government announced temporary changes to the Canada Summer Jobs program.

To encourage small businesses to hire summer staff, they’re going to cover up to 100% of the minimum wage costs (up from 50%).

Regional Relief and Recovery Fund

The Regional Relief and Recovery Fund (RRRF) will provide interest-free repayable contributions to businesses that haven’t been able to access federal financial assistance programs, or could still use help.

The funding will be delivered by Canada’s 6 regional development agencies. You must apply to the RRRF through your regional development agency. Each one has its own application process, eligibility guidelines and payment process.

Some agencies allow you to use the funding even if you’ve been approved for financial relief programs like the Canada Emergency Business Account or Canada Emergency Wage Subsidy. Other agencies, however, will not approve you for funding if you’re already accessing these programs.

Canada Emergency Commercial Rent Assistance

The Canada Emergency Commercial Rent Assistance (CECRA) program will provide unsecured, forgivable loans (up to 50%) to commercial property owners if their small business tenants have been heavily impacted by the COVID-19 pandemic.

To receive forgivable loans, commercial property owners must cut their tenant’s monthly rent by at least 75% in April, May and June. They must also agree not to evict the tenant during this time.

The commercial property owner would receive 50% of the tenant’s rent from the CECRA program, paid directly to their mortgage lender. For the remaining 50%, the tenant would pay 25%, and the commercial property owner would forgive 25% of the rent.

AgriStability Deadline Extended

As a temporary measure to help more producers access AgriStability during the COVID-19 crisis, the enrolment deadline for the 2020 AgriStability program year has been extended from April 30 to July 3, 2020.

Enrolment fees can also be paid without a penalty until July 3rd, whether you are new or already participating.

Farm Credit Canada Gets a Boost

The government increased the lending capacity of Farm Credit Canada by $5 billion to help agricultural producers cope during the pandemic.

Effective immediately, FCC has put the following deferrals and funding in place:

  • Deferral of principal and interest payments for six months; or
  • Deferral of principal payments up to 12 months
  • Access to an additional credit line up to $500,000, secured by general security agreements

To access FCC lending products, call their Customer Service Centre at 1-888-332-3301. While they have more money lend, the lending application process is still the same.

Here’s a video explaining what you can use the loan for, and how to access it:

New Measures to Support Temporary Foreign Worker Program

New support from the government will offset the cost of paying temporary foreign workers who must observe a 14-day quarantine period.

Eligible employers will receive $1,500 for each temporary foreign worker, which is conditional on employers adhering to mandatory isolation protocols.

They are also easing some requirements for the Labour Market Impact Assessment (LMIA) to reduce the administrative burden for employers.

EI Work Sharing Program

The government announced temporary changes to the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers.

The program will extend the eligibility of such agreements to 76 weeks, ease eligibility requirements, and streamline the application process.

Goods and Services Tax Credit

The government boosted the GST/HST credit as part of their COVID-19 relief plan.

You should have received this one-time special payment if you normally receive the GST/HST credit. The money is not taxable.

The maximum amounts for the 2019-2020 benefit year will double to $886 (from $443) if you’re single and will increase to $1,160 (from $580) if you’re married or common-law.

Find out more in our video:

Canada Child Benefit

The government increased the maximum annual Canada Child Benefit (CCB) payment amounts for the 2019-20 benefit year. Families should have received an extra $300 per child as part of their May payment.

Due to the extended tax filing date, it was announced that eligible Canadians, who are presently receiving the Canada child benefit (CCB) payments, will continue to receive these payments until the end of September 2020. Payment amounts will be based on information from 2018 tax return(s) if their 2019 tax return has not been assessed, and the CRA has not had time to calculate benefits and/or credits for the July to September 2020 payment.

Click for more information on the increase to Canada Child Benefit

Electronic Authorization

Effective immediately, the CRA will recognize electronic signatures as having met the signature requirements of the Income Tax Act.

This is a temporary administrative measure. This provision applies to authorization forms T183 or T183CORP.

Millions of Canadians sign these forms in person every year to authorize tax preparers to file taxes.

Support for Seniors: OAS and GIS

The government is providing a one-time tax-free payment of;

  • $300 for seniors eligible for the OAS pension with
  • an additional $200 for seniors eligible for the GIS.

This measure would give a total of $500 to individuals who are eligible to receive both the OAS and the GIS, and will help them cover increased costs caused by COVID-19. There is no need to apply.

All individuals who are eligible to receive the Old Age Security pension or the Guaranteed Income Supplement in June 2020 will receive the one-time payment for seniors. Payments will be issued as soon as possible.

Read more on the Government of Canada website

Contact FBC

Have questions about this or other COVID-19 programs for Canadian businesses? Unlimited consultation related to tax matters is a key benefit of FBC Membership. We’re offering a free consult where we get to know your business and determine next steps on saving you time and money. Request a consultation online.

You can also visit our COVID-19 Resource Centre for the latest information for Canadian business owners.


Disclaimer: The material above is provided for educational and informational purposes only.