Both the Federal and Provincial levels of government have announced sweeping financial measures to mitigate the economic impact of Covid-19. We have summarized and listed the measures implemented or proposed that may be of assistance to businesses in British Columbia. The technical details of many of these measures have yet to be announced but are expected in the coming days and weeks. We will be updating this list as further guidance and information is made available.
Federal
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Wage Subsidies. The Federal Government is proposing a three month wage subsidy for eligible businesses who retain employees on payroll. Businesses, both large and small, will be able to access this subsidy if they are able to demonstrate a 30% decrease in revenue as a result of the Covid-19 pandemic. The subsidy, which would be retroactive to March 15, 2020, would cover 75% of employee remuneration for the first $58,700 of employee earnings. This would equate to a maximum of $847 per week.
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The previously announced 10% wage subsidy is still in effect and would operate as a separate program. The subsidy equates to 10% of employee remuneration, up to a maximum of $1,375 per employee and $25,000 per employer. This measure, which is available to non-profits, charities, and corporations eligible for the small business deduction, allows businesses to reduce remittances of income tax withheld on employee remuneration by the amount of the subsidy.
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Income Tax Deferral. Businesses are permitted, until after August 31, 2020, to defer the payment of income taxes owing on or after March 18, 2020 and before September 2020. No interest or penalties will accrue during this period.
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GST and Customs Duty Deferrals. Businesses are permitted to defer payments of GST and customs duties until June 30, 2020. The deferral applies to specific reporting periods of the filer and, accordingly, a business intending on utilizing this deferral will need to confirm which reporting periods are captured by the deferral.
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Business Credit Availability Program. Up to $65 billion of additional credit will be made available through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to creditworthy businesses experiencing financial hardship. This program includes: (i) the new Canada Emergency Business Account, which will provide interest-free loans of up to $40,000 to small businesses; (ii) new operating credit and cash flow term loans of up to $6,250,000; and (iii) co-lending term loans with BDC for small and medium sized businesses. Businesses seeking such support should reach out to their financial institution for an assessment of their situation. Referrals may then be made to BDC or EDC if the needs of the business cannot be provided through the private sector.
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Support from Financial Institutions. Canada's largest banks have confirmed their support by offering flexible solutions for individuals and businesses impacted by Covid-19. This may include mortgage payment deferrals and relief on other credit products. Please contact your financial institution for further details.
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Income Support for Workers. The Federal Government has announced a number of supportive measures to assist workers, including: (i) waiving the one-week waiting period for individuals in quarantine that claim EI sickness benefits; (ii) waiving the requirement to provide a medical certificate to access EI sickness benefits; (iii) introducing the Canada Emergency Response Benefit. Employers should inform employees on leave to seek and apply for all available support.
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Support for Exporters. The Canada Account is administered by Export Development Canada and is used to support export transactions that are deemed to be in Canada's national interest. Changes have been made to the Canada Account to provide additional support to exporters through loans, guarantees, or insurance policies
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Provincial
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Tax Deferrals. Businesses with a payroll over $500,000 can defer the payment of employer health tax payments until September 30, 2020. Further, the tax filing and payment deadlines for for PST, municipal and regional district tax on short-term accommodation, tobacco tax, motor fuel tax and carbon tax, have been extended to September 30, 2020.
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Economic Stimulus. The Provincial Government has allocated $1.5 billion towards an economic stimulus plan. The Province is currently in the process of building the plan, which will focus on industries that have suffered the heaviest losses from the pandemic.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
