Federal Government Support & Programs for Business Related to COVID-19

This document is the first attempt to provide the current status of all federal programs of support for the economy and businesses in Canada in one place for members. It has evolved significantly over the past two weeks and is likely to continue to evolve and be updated by governments. As such please be sure to click the links provided to all governments for the most updated and available support for your business and ensure you take full advantage of the substantial support available via your respective levels of government. CPCA will assist where it can in exceptional cases related to access to funding, but we have limited resources to take on individual accounts for specific funding support as there will be challenges in accessing certain support in a timely manner. In some cases, various support initiatives already announced are still being defined in terms of benefit and who it applies to in some cases. Further information will be provided via the links provided below. CPCA will also monitor more specific actions taken, new announcements and report on them when they become available.

This resource will be provided on the website and updated as required and members will be altered when updates are made.

We hope the information provided below will assist members in developing a checklist of those support programs that are relevant for your company to access in the coming days.

Please note the resources at the end of this Bulletin that will help companies deal with business disruption, provided by Raymond Chabot Grant Thornton and Deloitte.

Federal Support for Business Related to COVID-19

Resources for Canadian Businesses – COVID-19 Response

https://www.canada.ca/en/services/business/maintaingrowimprovebusiness/resources-for-canadian-businesses.html

NOTE: Please consult the links for ongoing federal government announcements which occur regularly and which may be of benefit to member companies.

Canadian Economic Response Plan

The federal government has announced the following economic relief measures. For more information on Canada’s COVID-19 Economic Response Plan, announced on March 18, 2020, please visit the Department of Finance Canada’s website, here.

Resources for Canadian Businesses

Small and medium-sized businesses are the backbone of the Canadian economy. During this extraordinary time, the Government of Canada is taking strong action to help Canadian businesses as COVID-19 is affecting them, their employees and their families. View all resources here.

Federal Government Support Announced
for Small Businesses in Canada

Canada’s Regional Development Agencies (RDAs) are one of the key platforms for economic development in Canada and help to address key economic challenges by providing regionally tailored programs, services, knowledge and expertise.

FedDev Ontario is closely monitoring the COVID-19 global challenge and the potential impact it could have on business and workers, as well as the broader economy.

New measures

The Government of Canada has announced a number of measures to help stabilize the economy. These measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses. Support includes:

Temporary wage subsidies for small businesses;
Access to credit through the Business Credit Availability Program (BCAP);
Deferral of income tax payments owing on or after March 18;
An Insured Mortgage Purchase Program;
Augmenting credit available to farmers and the agri-food sector through Farm Credit Canada;
Flexibility in the Canada Account limit to allow for additional support to Canadian businesses in exceptional circumstances;
Enhancing the Work-Sharing Program to help employers who are experiencing a downturn in business due to COVID-19, and their workers;
Introducing an Emergency Care Benefit to provide income support to workers who must stay home and do not have access to paid sick leave;
Introducing an Emergency Support Benefit to support workers who are not eligible for EI and are facing unemployment.

Federal Announcement for Small Businesses
Announced on March 27, 2020

NOTE: This is separate from the eligibility all workers currently have to access Employment Insurance programs when temporarily laid off and can access up to 55% of their salary. The announcement below allows access to 75% of current earnings up to a maximum of approximately $58,000.

While the announcement below is for small business it may apply to ALL businesses in Canada that qualify. Current details note that businesses can qualify if experiencing a 30 percent reduction in current business. It applies as noted below.

Announcement of a 75 per cent wage subsidy for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. This will help businesses to keep and return workers to the payroll. More details on eligibility criteria will start with the impact of COVID-19 on sales, and will be shared before the end of the month.

Allow businesses, including self-employed individuals, to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments until June, as well as customs duties owed for imports. 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.
Launch the new Canada Emergency Business Account. This program will provide up to $25 billion to eligible financial institutions so they can provide interest-free loans to small businesses. These loans – guaranteed and funded by the Government of Canada – will ensure that small businesses have access to the capital they need, at a zero per cent interest rate, so they can pay for rent and other important costs over the next number of months.
Launch the new Small and Medium-sized Enterprise Loan and Guarantee program that will enable up to $40 billion in lending, supported through Export Development Canada and Business Development Bank, for guaranteed loans when small businesses go to their financial institutions to help weather the impacts of COVID-19. This is intended for small and medium-sized companies that require greater help to meet their operational cash flow requirements.

These new investments will help Canada’s financial institutions provide the credit and liquidity options that a range of Canadian businesses need immediately.

The Government of Canada understands that some sectors have been disproportionally impacted by the COVID-19 pandemic. We will continue to carefully monitor all developments, and take further action in the near term. We’re all in this together, and the Government of Canada will continue to work around the clock to ensure all Canadians and small businesses get the support they need to weather this crisis.

Quick Facts

The deferral to June of GST/HST payments, as well as customs duties owing on imports, will generally apply to remittances that become due in March, April, and May. These amounts would normally have been due to the Canada Revenue Agency and the Canada Border Services Agency as early as the end of this month. This measure will take effect immediately, through existing authorities.
The Canada Revenue Agency is introducing a series of administrative measures to remove some of the burden on businesses experiencing financial hardship.
The new Canada Emergency Business Account will provide funding to eligible financial institutions so that they can provide interest-free loans in the form of lines of credit of up to $40,000 to businesses with payrolls of less than $1 million. A quarter of this loan (up to $10,000) is eligible for complete forgiveness.
The new Small and Medium-sized Enterprise Loan and Guarantee program will operate as follows:
- Export Development Canada will provide guarantees to financial institutions so that they can issue new operating credit and cash flow term loans of up to $6.25 million to small and medium-sized businesses. These loans will be 80 per cent guaranteed by Export Development Canada, to be repaid within one year.
- Small and medium-sized businesses can also get support through a new Co-Lending Program that will bring the Business Development Bank of Canada together with financial institutions to co-lend term loans to these businesses for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program, which will be risk-shared at 80 per cent between the Business Development Bank of Canada and the financial institutions. Eligible financial institutions will conduct the underwriting and funding directly for customers.
The government has already introduced several measures to support businesses affected by COVID-19:
- Providing eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10 per cent of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration.
- Extending 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.
- Establishing a Business Credit Availability Program, largely targeted to small and medium-sized businesses, through the Business Development Bank of Canada and Export Development Canada. These organizations are working closely with private sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation, and tourism.
- Increasing credit available for farmers and the agri-food sector through Farm Credit Canada.
- Deferring the payment of income taxes. The government is allowing all taxpayers to defer, until after August 31, 2020, the payment of income tax amounts owed on or after March 18 and before September 2020. This relief would apply to tax 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.

Associated Links

Export Development Canada (EDC)

Canada Account business support

The Minister of Finance will now be able to determine the limit of the Canada Account in order to deal with the COVID-19 outbreak. The Canada Account is used to support exporters when necessary and in the national interest. Exporters can receive support through loans, guarantees or insurance policies.
Announced on March 18, 2020. EDC’s Coronavirus Campaign website may be found here. To contact EDC directly, call 1-800-229-0575 or e-mail tradeadvisor-conseiller@edc.ca

Business Credit Availability Program

The Business Credit Availability Program (BCAP) is targeted at small and medium-sized businesses. It will provide more than $10 billion in support.
The program is a collaboration between EDC, the Business Development Bank of Canada (BDC), and private sector lenders. The goal is to provide credit solutions for individual businesses in sectors such as oil and gas, air transportation, and tourism.
Announced on March 13, 2020. EDC’s Coronavirus Campaign website may be found here. To contact EDC directly, call 1-800-229-0575 or e-mail tradeadvisor-conseiller@edc.ca

Farm Credit Canada (FCC)

On March 23, 2020, the Prime Minister announced that the FCC has received an enhancement to its capital base that will allow for an additional $5 billion in lending capacity.
Initially, the focus will be on assisting the industry in addressing cash flow challenges so that businesses can remain focus on business-critical functions.
The FCC is asking existing customers who have financial concerns to contact the organization to discuss alternatives.
For more information, see the FCC news release of March 23, 2020. To contact the FCC Customer Service Centre, call 1-888-332-3301.

Office of the Superintendent of Financial Institutions (OSFI)

OSFI announced in a press release on March 13, 2020, that it has taken a number of actions to build resilience of federally regulated financial institutions during the COVID-19 crisis. These measures include:
Lowering the Domestic Stability Buffer by 1.25% of Risk Weighted Assets, effective immediately;
Suspending consultation on the minimum qualifying rate for uninsured mortgages; and
Reviewing its supervisory and regulatory priorities to align with current conditions.

Bank of Canada

Broadening of eligible collateral liquidity facility

On March 18, 2020, the Bank of Canada announced the following interventions, which are effective immediately:
Providing liquidity on a daily basis to participating financial institutions in the payments systems operated by Payments Canada under its Standing Liquidity Facility (SLF). Loans made by the Bank of Canada must be fully collateralized.
Allowing Large Value Transfer System (LVTS) participants to assign 100 per cent of their non-mortgage loan portfolio (NMLP) as pledged collateral for the SLF, giving institutions greater flexibility in managing their collateral.
LVTS participants who do not use their NMLP will be able to hold up to 100% of their pledged collateral for the SLF in securities that are currently subject to concentration limits.
The Bank of Canada has also lowered its target for the overnight rate by 50 basis points to 0.75%, effective Monday, March 16, 2020.
For more information, see the Bank of Canada’s Market Notice of March 18, 2020.

Broadening of eligible collateral under term repo facility

On March 16, 2020, the Bank of Canada announced that it is broadening eligible collateral for its term repo facility to include the full range of collateral eligible under the Standing Liquidity Facility, as well as own-name covered bonds. This change was effective immediately.
For more information, see the Bank of Canada’s Market Notices of March 16 and March 18, 2020.

Support to Canada mortgage bond market

On March 16, 2020, the Bank of Canada announced that it stands ready, as a proactive measure, to provide support to the Canada Mortgage Bond (CMB) market so that this important funding market continues to function well. This may include purchases of CMBs in the secondary market, similar to the increase in Government of Canada bond buybacks. Further operational details, including the effective date, will follow.
For more information, see the Bank of Canada’s Market Notice of March 16, 2020.

Bank of Canada’s bond buyback program

On March 18, 2020, the Bank of Canada announced:
- A switch buyback operation on Thursday, March 19th in the 10-year sector.
- A switch buyback operation on Monday, March 23rd in the 5-year sector.
- A switch buyback operation on Wednesday, March 25th in the 30-year sector.
- The Bank will announce the specific operational details (e.g., timing and maximum size of a replacement Bond and Buyback basket) ahead of each operation through its regular Call for Tenders process.
For more information, see the Bank of Canada’s Market Notice of March 18, 2020.

Bank of Canada’s Banker’s Acceptance Purchase Facility (BAPF)

Beginning on March 23, 2020, the Bank of Canada will conduct secondary market purchases of one-month Bankers’ Acceptances issued and guaranteed by any Canadian bank of sufficiently high quality.
For more information, see the Bank of Canada’s Market Notice of March 18, 2020, or the BAPF Operational Details.

Canada Mortgage and Housing Corporation (CMHC)

Insured Mortgage Purchase Program

Under this program, announced on March 16, 2020, the government will purchase up to $50 billion of insured mortgage pools through CMHC. This will provide stable funding to banks and mortgage lenders, so they can continue to lend to Canadian consumers and businesses. Details of the terms of the purchase operations are forthcoming.
For more information, see CMHC’s press release of March 16, 2020.

Canada Revenue Agency (CRA)

Helping Businesses Keep Their Workers Wage Subsidy

On March 18, 2020, Prime Minister Trudeau announced a “Helping Businesses Keep Their Workers Wage Subsidy”. This is targeted at small businesses, non-profits, and charities.
This program is designed to support businesses that are facing revenue losses and to help prevent lay-offs. The wage subsidy proposed will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration.
Eligible employers include non-profit organizations, corporations eligible for the small business deduction (i.e. Canadian-controlled private corporations) and registered charities.
For more information, see the Department of Finance Canada’s press release of March 18, 2020.

Flexibility for business tax filings

As announced on March 18, 2020, the federal government’s COVID-19 Response Plan contains measures that will allow businesses to defer the payment of any income tax that becomes owing between March 18, 2020, and August 31, 2020, until September 1st, 2020. Interest and penalties will not apply or be computed to these unpaid tax balances during this period.
This measure will apply to both monthly instalments and year-end tax balances due under Part I of the Income Tax Act.
The CRA will temporarily suspend audit interactions with taxpayers and their representatives. The CRA will also refrain from initiating any post-assessment GST/HST or income tax audits with small or medium-sized businesses for the next four weeks. No collection activities will be initiated on new debts until further notice, and the CRA undertakes to make flexible payment arrangements available
For more information, see the Department of Finance Canada’s press release of March 18, 2020.

Extending the Work-Sharing program

The Work-Sharing program is provided for workers who agree to reduce their normal working hours because of developments beyond the control of their employers. The federal government is extending the maximum duration of the Work-Sharing program from 38 to 76 weeks.
For more information, see the Government of Canada’s “Support to Businesses” webpage. Applications can be made here.

Support for people facing unemployment

This benefit replaces the Emergency Care Benefit and the Emergency Support Benefit that were announced by the Department of Finance Canada’s press release of March 18, 2020. From now on, the federal government will provide a taxable benefit of $2,000 a month for up to 4 months. The benefit will be available to the following individuals:
- Workers who do not have access to income support and who must stop working due to COVID-19;
- Working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures;
- Workers who are sick, quarantined, or taking care of someone who is sick with COVID-19;
- Workers who still have their employment but are not being paid because their employer has asked them not to come to work since there is not sufficient work;
- Wage-earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
For more information, see the Government of Canada’s “Support for Individuals” webpage. Application details will be available through My CRA and My Service Canada, beginning the first week of April.

Income support for individuals

The response plan also includes certain measures to boost assistance to low and modest-income families through $7.5 billion of additional payments which will be made under existing benefit programs.
This includes a one-time special payment of a GST/HST credit to be paid by early-May, and an increase to the maximum annual Canada Child Benefit (CCB) of $300 per child for the 2019-2020 benefit year. This is expected to be paid as part of the May 20, 2020, CCB payment date.
In recognition of the volatility in stock market conditions, the Response Plan also includes a measure to reduce required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, to provide flexibility to annuitants who might otherwise be forced to liquidate investments to meet minimum RRIF withdrawal requirements. The Response Plan also notes that similar rules will apply to individuals who are receiving variable benefit payments under defined contribution registered pension plans. Please note that on March 25, 2020, the federal government passed legislation reducing this 2020 RRIF Minimum Payment by 25%.
While the Response Plan contemplates expanding the tools that the Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers offer to lenders to increase flexibility for homeowners to defer mortgage payments on CMHC-insured mortgage loans, there is no suggestion that the Government of Canada intends to introduce measures to defer repayments of amounts withdrawn from registered retirement savings plans under the home buyers’ plan.
For more information, see the Department of Finance Canada’s press release of March 18, 2020.

Flexibility for taxpayers

The CRA will defer the filing due date for 2019 tax returns until June 1, 2020, for individuals, and until May 1, 2020, for trusts having a taxation year ending on December 31, 2019.
Any income tax that becomes owing by the taxpayers between March 18, 2020, and August 31, 2020, under Part I of the Income Tax Act (ITA) will be deferred until September 1st, 2020.
To reduce the administrative burdens, the CRA will recognize electronic signatures as having met the signature requirements of the ITA on a temporary basis.
For more information, see the Department of Finance Canada’s press release of March 18, 2020.

Support for students

The Government of Canada is placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all student loan borrowers. During this period, no payment will be required and interest will not accrue.
For more information, see the Government of Canada’s “Support for Individuals” webpage.

Support for vulnerable populations

The federal government will provide:
$305 million for a new distinctions-based Indigenous Community Support Fund;
$157.5 million to the Reaching Home initiative;
$50 million to women’s shelters and sexual assault centres.
For more information, see the Government of Canada’s “Support for Individuals” webpage.

Flexibility for registered charities

The filing deadline for all charities with a Form T3010, Registered Charity Information Return, due between March 18, 2020, and December 31, 2020, is postponed to December 31, 2020.

Tax Court of Canada

The Tax Court of Canada has cancelled all sittings and conference calls scheduled between March 16, 2020, and May 1, 2020, inclusively. The Court will reassess on April 14, 2020. The Registry will contact affected parties directly. The Registry offices of the Tax Court of Canada are closed for all other business until further notice.

Canadian Sales Taxes (GST/HST/QST, and PST of British Columbia,
Saskatchewan and Manitoba)

The Government of Canada and the Government of Quebec have yet to announce relief measures from a sales tax perspective for GST/HST/QST for registrants who are directly impacted by the COVID-19 pandemic. This means that every person who is registered for GST/HST/QST purposes must act with diligence in filing their sales tax returns, and meet any applicable deadlines despite the hardship caused by the COVID-19 pandemic.

Each of British Columbia, Manitoba, and Saskatchewan have announced certain relief measures with respect to PST in the respective provinces. Please see the detailed discussion below for additional information on specific PST measures.

Canada Border Services Agency

Customs Notice 20-08 provides information on the relief of duty and taxes for goods required for an emergency (as defined in the Goods for Emergency Use Remission Order (C.R.C., c. 768)) (the “Order”) and imported by or on behalf of federal, provincial or municipal entities, as well as by or on behalf of members of first response organizations, such as police, fire, and local civil defence groups including medical response teams. Other parties are not eligible for this relief. As these goods are required on site quickly, the CBSA will endeavour to expedite the clearance when possible.

As a result, this notice is likely to have limited impact for non-government entities, including most private importers, unless they have registered to import goods required for an emergency on behalf of federal, provincial, or municipal entities (such as masks, personal protective equipment, ventilators, hand-sanitizing gel, etc.) To apply for relief of duty and taxes, the importer must fill out a Form B3-3 and enter special authorization code “73-2529” in field 26 and “9993” in field 28. No security deposit will be collected.

Customs Notice 20-09, issued March 18, 2020: effective immediately, the usual 90 day period for submitting corrections following a CBSA trade compliance verification where errors were found has been extended by 30 days (for a total of 120 days). No end date for these measures has been announced and it is likely that it will continue for the duration of the emergency.
Customs Notice 20-11, issued March 27, 2020: for the extension of timeframes for the payment of customs duties and GST. As of now, the all payments due to the CBSA (including customs duties and GST on regular imports, re-assessments, penalties, etc.) are extended to June 30, 2020. This also includes charges on the statement of account of March due on April 1, 2020. Importers are still obligated to submit accounting declarations for imported goods released on minimum documentation within prescribed timeframes.
Customs Notice 20-10, issued March 29, 2020: for transactions released by the CBSA from March 11, 2020 to May 14, 2020, importers will receive a 45-business-day grace period for late accounting penalties. Importers will not need to submit individual applications to have late accounting penalties waived for this period. The grace period is subject to review as matters evolve, and an update will be posted if it is extended.