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Government’s COVID-19 Economic Response for Corporations

Government’s COVID-19 Economic Response for Corporations
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By PKF Team Blog April 8, 2020

Government’s COVID-19 Economic Response plan Summary for Corporations

Type of Benefit
Name of Benefit
Benefit Amount
Eligibility
Other information
Avoiding layoffs
Canada Emergency Wage Subsidy
 up to 75 % of salary covered, on the first $58,700 earned this year. $847 per week per employee. Effective from March 15, 2020.
  • Business revenue has decreased by 30% year -over -year because of Covid-19;
  • Non-profit organization, registered charity, both big and small companies;
  • The Number of employees – will not determine whether you get this support.
 Businesses started after Feb 2019, monthly revenues will be compared to a reasonable benchmark.
Extending the Work-Sharing program
 extend the duration for a total of 76 weeks.
  • Be a year-round business in Canada for at least 2 years ;
  • Be a private business, a publicly-held company, or a not-for-profit organization;
  • Demonstrate that the shortage of work is temporary and beyond their control, and is not a cyclical/recurring slowdown;
  • Demonstrate a recent decrease in business activity of approximately 10%; and,
  • Submit and implement a recovery plan designed to return the Work-Sharing unit(s) to normal working hours by the end of the Work-Sharing agreement.

Employers may not make a Work-Sharing agreement with employees who are:

  • Seasonal, or students hired for the summer or co-op term;
  • Hired on a casual or on-call basis; or
  • Shareholders of the business, whose shares provide them with significant decision making power as to the direction of the company
Access to credit
Establishing a Business Credit Availability Program:
  • Loan Guarantee for Small and Medium-Sized Enterprises.
  • Co-Lending Program for Small and Medium-Sized Enterprises.
 up to $6.25 million incremental credit amounts These programs will roll out in mid-April, and interested businesses should work with their current financial institutions.
  • EDC is working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to SMEs.
  • BDC is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements.
Canada Emergency Business Account
 up to $40,000 of interest-free loans to small businesses and not-for-profits

need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.

This program will roll out in mid-April, and interested businesses should work with their current financial institutions.

 Banks might ask T4Sum report for 2019 as part of their own due diligence process
Reduced and deferred payments
More time to pay income taxes
 defer until August 31, 2020, the payment of any income tax amounts that become owing on or after March 18 and before September 2020 all businesses No interest or penalties will accumulate on these amounts during this period Income tax filing and payment dates: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html
Alberta additional measures
Utility payment deferral
 defer electricity and natural gas bill payments for the next 90 days Residential, farm and small commercial customers Call your utility provider directly to arrange for a 90-day deferral on all payments
WCB premium payment deferral
  • For small and medium businesses, the government will cover 50% of the 2020 premium when it is due in 2021
  • saving businesses $350 million;
  • Large employers will have their 2020 WCB premium payments deferred until 2021, at which time their premiums will be due;
 Small, medium and large private sector employers can defer WCB premium payments until 2021 Employers who have already paid WCB premiums in 2020 are eligible for a rebate or credit.
Corporate income tax changes
 Corporate income tax balances and instalment payments coming due between March 18, 2020 and August 31, 2020 are deferred until August 31, 2020 Deferred until August 31, 2020 to increase employers’ access to cash so they can pay employees, address debts and continue operations
ATB and credit unions
 ATB – up to 6 months of payment deferral on loans and lines of credit for Small business customers to access additional working capital Other businesses and agriculture customers can access support on a one-on-one basis.
Credit unions Customers of Credit Union Business members should contact their credit union directly to work out a plan for their personal situation
Ontario additional measures
Electricity Relief
 electricity will be priced at “low-peak” – 10.1 cents/kwh – at all hours of the day for the next 45 days Small Businesses and Farms During COVID-19
Premium payments deferral
 deferred for six months without interest charge and penalties All employers covered by the WSIB’s workplace insurance are automatically eligible There will be no negative consequences for businesses who defer premium reporting and payments. The WSIB will