Canada’s COVID-19 Emergency Response Act

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April 3, 2020

The Parliament of Canada has formulated a response plan to help Canadians facing hardship as a result of the COVID-19 outbreak. This response plan includes assistance for both individuals and businesses. The COVID-19 Emergency Response Act was recently passed by Parliament to provide an estimated $107 billion in assistance.

This article will focus on support plans for businesses. Below is a partial list of items that may be of interest to business owners.

  1. Work-SharingThe maximum duration of the Work-Sharing program has increased from 38 weeks to 76 weeks. The Work-Sharing program is offered to workers who agree to reduce their normal working hours because of developments beyond the control of their employers.
  2. Wage Subsidies of up to 75 per cent of the wage subsidy have been approved for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. This will help businesses to keep people on and return workers to the payroll.
  3. The Business Credit Availability Program ( BCAP) provides $65 billion of additional support through Export Development Canada (EDC) and the Business Development Bank of Canada (BDC).
  4. The Deferral of Sales Tax Remittance and Customs Duty Payments allows businesses, including self-employed individuals, to defer, until June 30, 2020, payments of the Goods and Services Tax/Harmonized Sales Tax (GST/HST), as well as customs duties owing on their imports. The deferral will apply to GST/HST remittances for the February, March, and April 2020 reporting periods for monthly filers; the January 1, 2020, through March 31, 2020, reporting period for quarterly filers; and for annual filers, the amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year. For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April, and May. These amounts were normally due to be submitted to the Canada Revenue Agency and the Canada Border Services Agency as early as the end of March.
  5. Changes to Canadian tax filing and payment dates have also been approved.

The above information is intended to provide general information on the Canadian government’s assistance provisions that might affect small business. This information is not intended to provide accounting, tax or legal advice. Consultation with appropriate professionals is recommended.