Canada Emergency Business Account

Applications are opening soon for small businesses to ensure they have what they need to cover their operational costs under the current circumstances as the province begins to reopen. Small businesses and not-for-profits can apply trough the Canada Emergency Business Account (CEBA) for an interest free loan up to $40,000 to assist with operating costs while in periods of decreased revenue as a direct result of the COVID-19 pandemic.

To qualify for CEBA the small business or not-for-profit must meet the following criteria:

  • Be a tax registered Canadian operating business in operations as of March 1, 2020
  • Total employment income paid in 2019 is between $20,000 and $1,500,000
  • The borrower has an active business account with Lender of the loan, who is also their primary financial institution

To apply, small businesses and not-for-profits should contact their financial institutions directly, and can take a look at the website below for a list of participating financial institutions in the CEBA program.

The CEBA funds can be used on:

  • Any operating expenses that cannot be deferred, this includes but it not limited to, payroll, rent, utilities, debt payments and property taxes.
  • However, they cannot use the debt for refinancing of current debt, payment of dividends or for increase in management compensation

Please see the CEBA Website for more information: https://ceba-cuec.ca/

Update to the CRA Tax Filing Deadline

The CRA has provided some additional guidance regarding the personal tax filing deadline.

As previously announced, individuals who previously had a personal income tax filing deadline of April 30, 2020 has had their deadline extended until June 1, 2020. Penalties and interest will not be charged if payments are made by the extended deadline of September 1, 2020.

It is important to note that if you or your spouse are self-employed, you still have until June 15, 2020 to file your taxes. In both of these situations your payment deadline has been extended to September 1, 2020.

This payment extension also applies to installments typically due June 15, 2020, and no interest or penalties will be charged for this payment if it is made before the extended deadline of September 1, 2020.

It is still recommended that individuals file their personal tax return even though there will be no interest or penalties for late filing as it could impact your credit payments including the GST credit. You will still continue to receive payments based off of your 2018 return, but to ensure that you will receive the right amounts it is important to file by the deadline. This also applies if you are entitled to a refund, filing on time will ensure that you get your refund as soon as possible.

 

For more information please see the CRA website for updated information and additional news: https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2020/filing-2019-taxes-covid19-crisis.html?utm_source=mediaroom&utm_medium=eml

Emergency Community Support Fund

As part of their response to the COVID-19 the United Way Elgin Middlesex is working to help charities continue to support vulnerable individuals in their community. They will be accepting applications for the Emergency Community Support Fund which has been provided by the federal government for distribution.

If you are a charity providing services to meet immediate community needs related to COVID-19 you can apply for this funding. This funding is designed to support front line social services that provide support for vulnerable Canadians including: low-income seniors, women, children and youth, persons with disabilities, members of the LGBTQ2S+ community, newcomers, Indigenous peoples, members of racialized communities.

Please visit the United Way Elgin Middlesex website for more information on if you qualify and how to apply. http://unitedwayem.ca/covid-19/ecsf/

Applications will be accepted until June 12, 2020

Regional Relief and Recovery Fund Program

In a response to help small and medium-sized businesses impacted by COVD-19 who have been unable to access federal relief programs, FedDev Ontario and Community Futures Ontario has announced the New Regional Relief & Recovery Fund.

To specifically help the communities in Elgin county, the Elgin Business Resource Centre will be providing qualifying businesses with loans up to $40,000.

Specified businesses include businesses such as retail shops, restaurants and other businesses of strategic importance to the community.

Other criteria include:

  • being established prior to March 1, 2020
  • impacted adversely by the COVID-19 pandemic
  • viability and not experiencing other financial difficulties prior to March 1, 2020
  • have attempted to access other federal relief supports and were ineligible, rejected, or require funding for expenses that have not been supported, with priority given to applicants who were ineligible or rejected from other federal relief supports.

Please see the Elgin Business Resource Centre (https://www.elginbusinessresourcecentre.com/regional-relief-and-recovery-fund/) or FedDev Ontario (https://www.feddevontario.gc.ca/eic/site/723.nsf/eng/h_02581.html?OpenDocument) for more information.

 

 

 

 

Canada Emergency Commercial Rent Assistance for small businesses

Applications are open for commercial property owners to apply for the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. All eligible commercial property owners are encouraged to apply to help ease the burden of their tenants while meeting their operating expenses.

To qualify for CECRA the commercial property owner must meet the following criteria:

  • Own a commercial property that has one or more tenants that are impacted by COVID-19
  • Enter into a rent reduction agreement for the period of April, May, and June 2020, reducing the impacted tenant’s rent by at least 75%
  • Ensure that the agreement includes and moratorium on eviction for the period, and a declaration of rental renewal

Impacted small business tenants are businesses including non-profit organizations and charities that:

  • Do not pay more than $50,000 in monthly rent per location
  • Do not generate more than $20 million in gross annual revenues
  • Has seen at least a 70% decline in pre-COVID-10 revenues

In order to apply, commercial property owners must provide the following documents:

  • Rent Reduction Agreement for each impacted tenant
  • Rent Roll for impacted tenants
  • Property tax statement for commercial property
  • Tenant information including number of full and part time employees
  • A copy of the recent bank account statement where the rent is deposited
  • Tenant’s business number

Please see the CMHC Website for more information and to apply: https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business

 

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It was announced on April 24, 2020 that the provincial and federal governments will be working together to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses.

The proposed program will be lowering rent for small businesses that have been impacted by COVID-19 by 75%. This will be done by providing forgivable loans to qualifying commercial property owners to cover 50% of three months of rent payments from eligible small business tenants who are financial impacted during April, May, and June.

These loans will be forgiven if the mortgaged property owner reduces the tenant’s rent by at least 75% under a rent forgiveness agreement, which includes terms not to evict the tenant while the agreement is in place.

The tenant would be responsible in paying the remaining rent, up to 25%. Eligible impacted small businesses include businesses paying less than $50,000 in rent per month and who have either temporarily ceased operations or have had at least a 70% drop in pre-COVID-19 revenues. This would also apply to non-profit organization as well as charities.

The program is expected to be available mid-May, and would be applied retroactively to cover April and May, as well as June.

Further information will be available once the final terms of the agreement are set. It is recommended that you see the CRA website for further details as they are announced. Please also stay up to date with our blog posts for all of the latest information regarding Canada’s COVID-19 Economic Response Plan.

CRA: https://www.canada.ca/en/department-finance/economic-response-plan.html

Registering for CRA My Business Account and Calculating your CEWS Amount

Are you planning on applying for the Canada Emergency Wage Subsidy (CEWS) but are unsure how to get access to your CRA My Business Account? The CRA has prepared a short video to help walk business owners through the process of registering for your account.

Please follow the link below to watch the video: https://www.canada.ca/en/revenue-agency/news/cra-multimedia-library/businesses-video-gallery/register-mybusiness-account.html

If you want to get some additional information including calculating your subsidy amount, please go to the CRA website: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-calculate-subsidy-amount.html#h-1

COVID-19 Financial Relief for Canadians

Since the beginning of March, restrictions and measures related to COVID-19 have rapidly escalated. On March 18, 2020, the Government of Canada announced a series of measures designed to support the finances of individuals, businesses, charities, and non-profit organizations

COVID-19 Financial Relief for Canadians:

Businesses

Individuals

Other Filings and Administration

Future Changes

APPENDIX 1
Federal Government Financial Relief Measures Related to COVID-19

APPENDIX 2
Tax Deadlines & Payments – Summary of Extensions* (as of April 8th, 2020)

COVID-19 Financial Relief for Canadians April 8 2020

Updated! – Canada Emergency Wage Subsidy

On April 11, 2020 updated information regarding the CEWS was made available.

Some key items are summarized below. Please see the CRA website for updates and additional details on CEWS including calculating subsidy amount: https://www.canada.ca/en/department-finance/news/2020/04/additional-details-on-the-canada-emergency-wage-subsidy0.html

  • Eligible employers include individuals, taxable corporations, partnerships, non-profit organizations and registered charities
  • Subsidy is available to eligible employers who have seen a drop of at least 15% of revenues in March and 30% in subsequent months
  • Charities and non-profit organization are allowed to choose to either include or not to include government funding as part of their calculation, but this must be applied consistently
  • Employers will have a choice of using an average of revenues reduction for January and February 2020 OR for the same period in the prior year
  • Once an employer is approved, it will automatically qualify for the next period
  • There are three qualifying periods:
    1. Mach 15, 2020 to April 11, 2020 (based on March revenue decline)
    2. April 12, 2020 to May 9, 2020 (based on April revenue decline)
    3. May 10, 2020 to June 6, 2020 (based on May revenue decline)
  • Eligible employees include individuals who are employed in Canada, and will be available to employees other than those who have been without pay for 14 or more consecutive days in the eligibility period.
  • Employers can apply through their CRA My Business Account

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There are new proposed changes to the CEWS bill coming from the Government of Canada including:

  • A new option to use January and February as reference points
  • A 15% revenue reduction threshold instead of the 30% originally proposed for March
  • Charities and NPO’s may include or exclude government funding to measure revenue drop
  • The Government is actively asking companies to rehire their workers using the subsidy, even if the employees don’t work or work less than before.

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Prime Minister Justin Trudeau and the Canadian Government have announced a new lifeline to the economy to help Canadians and businesses get through the challenges caused by the pandemic.  The Canada Emergency Wage Subsidy aims to prevent further job losses by allowing businesses to retain the employees they have on payroll who may not be working, while also encouraging businesses to re-hire workers that have already been laid off as a result of the crisis.  The program promises to provide a 75% wage subsidy to employers for up to 12 weeks, retroactive to March 15th.

To learn if you are an Eligible Employer, how to calculate the amount of subsidy you will receive, and for information regarding how to apply for the subsidy you can read the full announcement at www.cananda.ca.

New COVID-19 Updates from the CRA

As part of Canada’s COVID-19 Economic Response Plan the CRA has extended a number of income tax filing and payment dates to help Canadians during this difficult time.
Some key highlights include:
• Interest and penalties will not be charged if deferred payments are made by September 1, 2020
• Individual filing date extended until June 1, 2020
• All Corporations with a filing date after March 18, 2020 and June 1, 2020 has been extended to June 1, 2020
• Trusts with a year end date of December 31, 2019 have a filing date extension to May 1, 2020
• Trusts with typical due dates in April or May have been extended until June 1, 2020

For additional information on these and other filing and payment extensions please see the CRA website:

www.canada.ca

CPA Canada Has The News!

Do you feel like there are constant updates and announcements from the Government?
Wanting to know more about how the tax deadlines have changed and what that means to you?
Are you looking for some resources related to working at home for the first time?
Don’t worry because CPA Canada has been working to compile resources for CPAs during the COVID-19 situation!

These resources can help provide valuable resources for both professionals as well as our clients in staying up to date with all of new and changing information.
We recommend that you take a look at the CPA Canada website for updates and additional information.