Last week the Canadian Government announced the extension and the expanded eligibility of the relief programs. Check out the main points below, that you should know:
Before making any decision, please contact your accountant and visit the Government of Canada website for further information.
Canada Emergency Rent Subsidy
On October 9, 2020 the Government proposed the new Canada Emergency Rent Subsidy (“CERS”) to provide relief for businesses, non-profits and charities that have been impacted by COVID-19. The rent subsidy will be available retroactively to September 27, 2020 until June 2021.
Information for Businesses, Not-for-Profits and Charities
With the introduction of the new rent subsidy, a qualifying organization that has suffered a revenue drop would be eligible for a subsidy up to 65% of eligible expenses. There is no threshold for revenue drop to qualify for the rent subsidy. Organizations who have experienced even a 1% decline in revenues could be eligible for some amount of the subsidy.
The Government has structured the CERS to mirror the current Canada Emergency Wage Subsidy (“CEWS”) and many of the organizations who are eligible for the wage subsidy will likely also qualify for the rent subsidy.
The breadth of eligible expenses under this funding may come as a surprise to many and could include commercial rent, property taxes, property insurance, and interest on commercial mortgages for qualifying properties.
The eligible expenses can be paid up to 60 days following the claim for the rent subsidy.
Eligible entities for the rent subsidy will align with CEWS and include individuals, taxable corporations and trusts, a non-profit organization, registered charities, some partnerships, and indigenous government-owned corporations.
The Government has implemented a few requirements. To be an eligible entity you must also meet one of the following criteria:
- Have a payroll account as of March 15, 2020 or have been using a payroll service provider
- Have a business number as of September 27, 2020, or
- Meet other conditions that may be prescribed in the future.
If your business qualified for the CEWS wage subsidy for Period 7 and/or 8, your business will likely also qualify for the CERS rent subsidy. If you think you might be eligible for this new rent subsidy, please contact your accountant to start the process.
Canada Emergency Business Account:
It was recently announced that the Canada Emergency Business Account (CEBA) will be increased by $20,000, in addition to the original CEBA loan of $40,000. Half of this additional financing ($10,000) would be forgivable if repaid by December 31, 2022.
The application deadline for CEBA has also been extended to December 31, 2020. Further details, including the launch date and application process for the additional $20,000 are expected to be announced in the near future. An attestation of the impact of COVID-19 on the business will be required to access additional financing.
BC Small and Medium-Sized Business Recovery Grant:
The $300 Million Small and Medium-Sized Business Recovery Grant program is intended to provide grants to B.C. businesses that employ between 2 and 149 B.C. residents and that have experienced declines in revenue since March 10, 2020.
The program will run until March 31, 2021 or until funds are fully deployed.
All of the below criteria are required to be met to be eligible for the grant.
- The majority share of the business is owned by one or more B.C. residents.
- Sole or primary operations are located in B.C.
- Currently operating or if it is a seasonal business, operated in its operating season.
- Operating in B.C. for at least three years prior to March 10, 2020.
- The business is registered in B.C.
- Pay taxes in B.C.
- Employ between two and 149 people in B.C. for at least four months of the calendar year.
- Prior to COVID-19, had positive cash flow for the last financial statement period.
- Experienced revenue loss of at least 70% during March 2020 and April 2020.
- Continue to earn 50% or less of pre-COVID revenue levels.
- Have and maintains a payroll account number with the Canada Revenue Agency (CRA).
- Maintain Worksafe B.C. numbers.
- Has accessed or applied to access for federal support where possible.
- The owner (s) have not prepared the business for closure or dissolution following March 10, 2020.
For further information please visit the Government of Canada website