The government announced the regulations to extend eligibility for the Canadian Emergency Wage Subsidy (CEWS) until August to ensure that it continues to support those employers and workers hardest hit by the COVID-19 pandemic and protects the jobs Canadians depend on. These regulations extend eligibility for the CEWS to the following groups:
- Partnerships that are up to 50-per-cent owned by non-eligible members
- Indigenous government-owned corporations that are carrying on a business, as well as partnerships where the partners are Indigenous governments and eligible employers
- Registered Canadian amateur athletic associations
- Registered journalism organizations
- Non-public colleges and schools, including institutions that offer specialized services, such as arts schools, driving schools, language schools or flight schools.
The government also intends to propose legislative amendments to ensure that the CEWS continues to meet its objectives. These proposed amendments would:
- Provide flexibility for employers of existing employees who were not regularly employed in early 2020, such as seasonal employees
- Ensure that the CEWS applies appropriately to corporations formed on the amalgamation of two predecessor corporations
Better align the treatment of trusts and corporations for the purpose of determining CEWS eligibility
The government has taken action to support Canadian businesses through the outbreak of COVID-19, with targeted new initiatives that:
- Extend the maximum duration of the Work-Sharing program, from 38 weeks to 76 weeks, for workers who agree to reduce their normal working hours because of developments beyond the control of their employers.
- Introduce, in the second half of May, the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses to provide a forgivable loan to eligible commercial property owners, who in turn give a rent reduction of at least 75 per cent for April (retroactive), May, and June to impacted small business tenants who have experienced at least a 70 per cent drop in pre-COVID-19 revenues.
- Launch the Canada Emergency Wage Subsidy calculator to support employers as they prepare to apply for the CEWS. On April 27, 2020, the Canada Revenue Agency launched the application process for the CEWS.
- Provide support to businesses through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) under the Business Credit Availability Program (BCAP). As part of this program, EDC and BDC will provide direct lending and other types of financial support at market rates to otherwise viable businesses and organizations whose access to financing would otherwise be restricted. By working in close cooperation with financial institutions, this program is filling gaps in market access and leveraging additional lending by private sector institutions. Employers with a total payroll of $20,000 to $1.5 million in 2019 will also be eligible to access the Canada Emergency Business Account, which will provide interest-free, partially forgivable loans of up to $40,000 to small businesses, including not-for-profits.
- Allow businesses, including self-employed individuals, to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments, as well as customs duty payments owed for imports, until June. This measure is the equivalent of providing up to $30 billion in interest-free loans to Canadian businesses. It will help businesses so they can continue to pay their employees and their bills and help ease cash-flow challenges across the country.
- Defer the payment of income taxes. The government is allowing taxpayers to defer, until after August 31, 2020, the payment of income tax amounts that become owing on or after March 18 and before September 2020. This relief, amounting to $55 billion in liquidity support, would apply to new balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
In addition to the measures above, Progress Group offers solutions that can differentiate, and support businesses and individuals needs, exploring new ways of working because of the deepening effects of the coronavirus. You can learn more about these and other offerings here. As this situation evolves, your Progress Group account team will proactively reach out if there is additional support we can provide.
In the meantime, if you have any further questions about Progress Groups’ response to COVID-19, please contact our office.