Updated: June 30, 2020
The Canadian government has rolled out several broad-based programs to buoy businesses and retain jobs during the pandemic and resulting partial economic shutdown. Here is a summary of the major announcements relevant to the recreational boating sector:
Canada Emergency Wage Subsidy
For eligible businesses and not-for-profits, the Canada Emergency Wage Subsidy (CEWS) program will subsidize 75% of the first $58,700 normally earned by employees (up to a maximum benefit of $847 per week). In order to qualify, businesses need to show a gross revenue decline of at least 15% in March and 30% in April and May of this year, compared to either the same month last year or an average of January and February 2020. The program period covers wages and salaries paid from March 15th to June 6th.
On May 15th, the government announced
the wage subsidy program will be extended an additional 12 weeks to August 29, 2020.
The application window for the CEWS is now open. Businesses can apply through CRA My Business Account or a separate online application form. CRA has also created a calculator that allows an employer to figure out their subsidy amount. Before using the calculator, please ensure you have updated payroll data on hand for each of your employees (including the amount of EI premiums and CPP contributions you have paid on their behalf).
The government has said approved applicants can expect to get their CEWS payments within 10 business days. If you haven’t already, please set up your CRA My Business Account online today to ensure you receive the benefit payment quicker.
Canada Emergency Business Account (CEBA)
The government is providing businesses with interest-free loans of up to $40,000 to help cover operating costs during the crisis. This program is for businesses with a total payroll between $20,000 to $1.5 million in 2019. If the recipient repays the loan on or before December 31, 2022, up to 25% ($10,000) of the debt will be forgivable. Businesses can now apply for the CEBA through their primary bank or credit union. Please visit this website for more details: https://cebaquestions.ca/
Deferred tax and tariff payments
The government is permitting all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18 and before September 2020 (meaning that no interest or penalties will be levied on these amounts during the period). As well, businesses will be able to defer remittances of GST/HST and customs duties owing on their imports until June 30, 2020. Please consult the CRA’s webpage for answers to commonly asked questions: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-gst-hst.html
Canada Emergency Commercial Rent Assistance program
The federal government has reached an agreement with the provinces and territories to introduce a Canada Emergency Commercial Rent Assistance program for small businesses. The program will provide forgivable loans to commercial property owners to cover 50% of rent in April, May and June for small business tenants in financial distress.
To qualify for the loan, property owners will need to reduce the small business tenants' rent by at least 75%; the small business will pay the remaining 25% in costs. Eligible small businesses must be paying less than $50,000 per month in rent and either have temporarily stopped operating or sustained at least a 70% drop in revenues.
**Update** On June 29th, the Prime Minister announced that CECRA will be extended by a month to include July. Please check the CMHC website for the latest.
Large Employer Emergency Financing Facility (LEEFF)
The LEEFF program has been set up to provide emergency loan funding to large Canadian businesses that are facing financial challenges due to COVID-19. The government has said that eligible businesses are those that:
- Have a significant impact on Canada’s economy as demonstrated by having either significant operations in Canada or supporting a significant workforce in Canada;
- Can generally demonstrate approximately $300 million or more in annual revenues; and
- Require a minimum loan size of about $60 million.
Regional Relief and Recovery Fund (RRRF)
The Regional Relief and Recovery Fund (RRRF)
is intended to help more businesses and organizations impacted during COVID-19, with a focus on regions and local economies. Priority sectors include manufacturing, technology, and tourism. The program is aimed at smaller businesses and aid will come in the form of grants and loans.
The program is being delivered through the government’s regional development agencies (RDAs). Eligible businesses will need to show that they failed to qualify, or were declined, for other federal supports such as the Canada Emergency Wage Subsidy or the Canada Emergency Business Account.
For more information on the RRRF, including how to apply, please visit your RDA’s website below: