Help for Your Small Business With Government Relief Measures

covid 19 coronavirus government relief measures

Things are changing rapidly these days, sometimes from hour to hour, during the recent Covid19 outbreak. It is a difficult time, where we are all learning to participate in social or physical distancing and most businesses have felt the dramatic impact of Coronavirus. But, one thing that hasn’t changed is that your business needs a steady stream of cash flow to continue operating, cover bills and pay employees, despite any business interruption or slowdown that may be happening.

During these uncertain and stressful times, it is reassuring to know that there are relief measures being provided by both the Federal and Provincial governments for small businesses and individuals.

Both levels of government have worked quickly to create legislation to help provide relief and support for small businesses to help cope with and manage with business continuity through these difficult times. As they continue to work through the plan for relief measures during this transition period and a recovery plan for the future, some details have been released. Here is what we know so far:

Federal Government assistance for small businesses

Although updates are still happening, here is what the Federal government has confirmed to date:

1. Wage subsidies

For those small businesses who continue to remain operational, but may be seeing reduced sales due to Covid19, the Federal government announced that they are committing to providing a wage subsidy of 10% for 90 days, beginning on March 18, 2020. The maximum subsidy is $1,375 for each employee, to a maximum of $25,000 per employer.

This includes corporations who qualify for Revenue Canada’s small business deduction, as well as not for profit and charitable organizations. Additional details and guidance for employers and businesses are provided by Revenue Canada.

Additional wage subsidy relief has also been created, in the form of The Canadian Emergency Wage Subsidy. This new program provides a subsidy of 75% of wages to employers for up to 12 weeks, encouraging them to rehire laid off workers and keep Canadians working. Both individuals and corporations are eligible to apply for this subsidy.

2. Tax relief

In an effort to help businesses focus on their day to day activities, deal with a potential business closure, and to help them keep more money in their pockets throughout this time, the Federal government has deferred tax filings for individuals and small businesses. The deadline has now been extended until June 1, 2020, with any tax payment owing being deferred until August 31, 2020. Revenue Canada has provided additional details about tax relief measures that are being put in place.

3. Emergency care for employees

Although many businesses will remain open, some employees may be unable to continue working for a number of health and safety reasons. Emergency care benefits can help assist employees who are not eligible for EI benefits, but who are unable to work for the following reasons:

  • They have been quarantined or test positive with Covid19
  • They must care for family members who are sick due to Covid19
  • They are caring for children due to school closures

For those who meet the eligibility criteria, the Emergency Care Benefit would provide up to $900 bi-weekly for a maximum of 15 weeks, making it possible for employees to cope with their situation while not being concerned with their job security or how they will pay their bills.

Starting in April, individuals can apply for government assistance either through the secure CRA MyAccount portal, their My Service Canada Account, or by calling a toll-free number that has yet to be announced.

Just as with regular EI benefits, individuals will have to re-attest their eligibility every two weeks in order to remain eligible. Further details will be provided by the government about how this will be processed.

4. Changes to EI Sickness Benefits

The government has opted to waive the one-week waiting period that typically applies to all EI sickness benefits, for those who are unable to work due being quarantined or told to self-isolate. As well, they will not be required to provide a medical note in order to apply, as normally would be the case when seeking sick pay.

However, there is quite a large backlog of applications, so it could take several weeks to a month for individuals to receive their first EI sick benefits payment.

5. WorkShare Program

For those businesses who are having to reduce the working hours of their employees, changes have been made to the WorkShare Program to provide additional assistance. This program allows businesses to create an agreement between themselves, Service Canada and their employee, where EI benefits can be provided to supplement the hours they have agreed to reduce.

The benefit of work sharing is that it allows employees to continue receiving some portion of their full wage, while supplementing the remainder with EI benefits, rather than having some employees working their full hours and having others being laid off.

The maximum amount of time for this program has been extended from 38 weeks to 76 weeks, and if you have previously used this program, the 30 day waiting period is being waived. For all new applications, the 30 day period will still apply.

6. Changes for banks

On an individual basis, banks have committed to providing assistance to individuals and small businesses feeling the impact of Coronavirus. Working together with individuals, employers and businesses, they have offered to provide deferrals of up to 6-months of mortgages and the opportunity to seek assistance with relief of loans and other credit products. Contact your bank directly to see what relief measure they are able to offer.

7. Additional Government assistance

The Federal Government has created a new business support fund called the Business Credit Availability Program to open up $10 billion in assistance to businesses. Details are still being worked out and have not yet been announced.

In addition to this, there have been changes made specifically to assist farmers during this time including increases to Farm Credit Canada and deferrals for farmers for any payments due on loans through the Advance Payment Program.

Government of Ontario assistance for small businesses

After declaring a state of emergency in Ontario, the Provincial Government issued an order for all non-essential businesses to close on March 24, 2020 for a minimum of 14 days. If a business is remaining open, it will still need to pay employees their wages, regardless if the business activity and revenue has been reduced. And, regardless of whether a business has been deemed essential or not, expenses like utilities will still need to be paid.

To help allow businesses and their employees cope with whichever situation they find themselves in, the Government of Ontario is providing the following relief measures:

Electricity pricing reduction

Whereas typical on-peak rates for electricity are just above 20 cents per kilowatt hour, the Province has reduced these rates by more than half for the next 45 days. This means that the rate of 10.1 cents per kilowatt hour will apply 24/7 for businesses, to allow them some relief from the higher on-peak rates.

Self-employed relief

Although it has been announced that support is being put in place for self-employed individuals, the details and eligibility criteria have not yet been confirmed.

Employee assistance

In addition to what the Federal Government is providing, Ontario has created job protections for employees unable to work due to a situation caused by Covid19, including quarantine, illness, being directed not to work, or having to care for others.

No notice is required for temporary layoffs, and Ontario employers can temporarily lay off workers for up to 13 weeks without providing severance.

Opportunities for your business to help

A new initiative by the Government of Ontario offers businesses the opportunity to pitch in and help if they are able to. Business and industry that can currently produce products that are severely required, such as equipment, ventilators, masks and anything else that is now in high demand due to the Covid19 outbreak, or are able to reconfigure their set-up to do this, are encouraged to go to Ontario Together. Not only will you be providing greatly needed products, but this program can also help you develop continuity planning to get your business through this transition period. You can also provide any ideas and innovations you may have that may be of assistance to helping overcome this circumstance.

Preparing for the future of your business

If you are faced with reduced sales, business interruption or a business closure, the fact that this is a stressful time cannot be understated. Although many individuals are being asked to participate in social/physical distancing, there is still the opportunity to plant the seeds today for success tomorrow, and examine your business continuity planning for the future.

It’s important to realize that this is definitely a difficult time, but it will not last forever. If yours is one of the many businesses being affected by Covid19, utilize the relief measures the government has announced, and remember that things will soon return to business as usual. The enormous impact of coronavirus was not foreseen by anyone, but we are all in this together and we will all get through this together.

Ontario Business Central is here to support you during these times of uncertainty and concern. We hope this article has made it easier for you to understand the information you want about the government assistance available for businesses and has provided you with valuable information to access these relief measures.

inquiries@ontariobusinesscentral.ca
Toll-Free: 1-877-306-9458
Local: 1-416-599-9009
Fax: 1-866-294-4363
Office Hours: 9:00am – 5:00pm
Monday – Friday E.S.T.

Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.