Last Updated: April 6, 2020
In light of the current COVID-19 situation, we recognize that individual businesses are facing unprecedented challenges. We believe it is vital to ongoing operational success to have access to accurate and reliable information with respect to COVID-19 and its relevance to commercial business operations. Accordingly, to help navigate the challenges posed by the COVID-19 outbreak, we have centralized related materials and information in our COVID-19 Knowledge Centre. As the situation is rapidly evolving, this information hub will be updated regularly.
As of March 18, 2020, the Alberta and federal governments have taken steps to assist Canadian businesses during this time, through a number of different initiatives. We have compiled the following announcements which we believe to be relevant to your business. However, we encourage you to visit both the Alberta and federal homepage for the most up to date information.
Federal Assistance
The Government of Canada’s COVID-19 Economic Response Plan will provide up to $27 billion in direct support to Canadian workers and businesses, plus $55 billion to meet liquidity needs of Canadian businesses and households through tax deferrals. This support includes:
- Canada Emergency Business Account: provides up to $25 billion to eligible financial institutions so they can provide interest-free loans to small businesses.
- Who can apply: Small businesses or not-for-profit that paid between $50,000 to $1,000,000 in total payroll in 2019 are eligible.
- How to apply: Contact your financial institution to apply for the loan.
- Canada Emergency Wage Subsidy: a three-month measure in which the government will cover up to 75% of a salary on the first $58,700, up to a maximum of $847 a week, retroactive to March 15, 2020.
- Note: Employers/businesses who are eligible for both the Canada Emergency Wage Subsidy and the Temporary Wage Subsidy, may only claim a subsidy under one or the other. Further, an employer cannot claim the Emergency Wage Subsidy for an employee for a week that the employee is eligible for the Canadian Emergency Response Benefit
- Who can apply: Eligible businesses of all sizes and from all sectors of the economy, regardless of the number of workers they employ, that suffer a drop of at least 30% in gross revenues due to COVID-19 in March, April or May, when compared to the same month in 2019, would be able to access the subsidy.
- How to apply: Through Canada Revenue Agency’s My Business Account portal as well as a web-based application. More details on how to apply will follow soon.
- Additional Information: For more information, click here.
- 10% Temporary Wage Subsidy: a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (“CRA”). The subsidy is equal to 10% of the remuneration you pay from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee and to a maximum of $25,000 total per employer.
- Who can apply: Individuals, partnerships, non-profit organizations, registered charities, or Canadian-controlled private corporations who are eligible for the small business deduction, who have an existing business number and payroll account with the CRA on March 18, 2020 and pay remuneration to an employee.
- How to apply: No application needed, employers can simply calculate the subsidy amount and reduce their current payroll remittance by that amount.
- New Loan Guarantee For Small and Medium Enterprises: Export Development Canada (“EDC”) will guarantee new operating credit and cash flow term loans that financial institutions extend to small and medium-sized enterprises (“SMEs”), up to $6.25 million.
- How to apply: Contact your financial institution to apply for the loan.
- Additional Information: For more information, click here.
- Co-Lending Program for Small and Medium Enterprises: The Co-Lending Program will bring the Business Development Bank of Canada (“BDC”) together with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements.
- Who can apply: SMEs that have been impacted directly or indirectly by recent events and have been financially viable prior to the impact from COVID-19.
- How to apply: Contact your financial institution to apply for the loan.
- Additional Information: For more information, click here.
- Canada Emergency Response Benefit:provides a taxable benefit of $2,000 a month for up to 4 months to support workers and entrepreneurs who have lost their income due to COVID-19.
- Who can apply: This benefit is open to individuals:
- residing in Canada, who are at least 15 years old;
- who have stopped working because of COVID-19 or are eligible for Employment Insurance regular or sickness benefits;
- who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
- who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four week period.
- How to apply: Applications can be completed: (1) by accessing your CRA MyAccount secure portal; or (2) by calling 1-800-959-2019 or 1-800-959-2041.
- Benefits are expected to be delivered 10 days after you submit your application form.
- Who can apply: This benefit is open to individuals:
- Business Credit Availability Program: provides more than $10 billion of additional support to businesses through BDC and EDC.
- How to apply: Contact your financial institution, which will contact BDC and/or EDC where appropriate.
- Corporate income tax changes: allowing businesses to defer, until after August 31, 2020, the that become owing on or after March 18, 2020 and before September 2020.
- Deferred payments of taxes: allowing businesses to defer until June 30, 2020 payments of the Goods and Services Tax/Harmonized Sales Tax, as well as customs duties owing on imports.
- Work-Sharing temporary special measures: an extension of work-sharing agreements by an additional 38 weeks, for a total of 76 weeks.
Additional information on resources for Canadian businesses can be found here. Further announcements issued by the Department of Finance Canada will be posted on their website.
Provincial Assistance
Financial assistance programs are targeted to Albertans generally, as well as to employers and employees. Financial measures to support businesses include:
- Corporate income tax changes: corporate income tax balances and installment payments will be deferred until August 31, 2020.
- Education property tax deferral: education property tax rates will be frozen at last year’s level.
- WCB premium payment deferral: small, medium and large private sector employers can defer WCB premium payments until 2021.
- Utility payment deferral: residential, farm and small commercial customers can defer electricity and natural gas bill payments for the next 90 days to ensure no one will be cut off, regardless of the service provider. Call your utility provider directly to arrange for a 90-day deferral on all payments.
- Tourism levy deferral: hotels and other lodging providers can delay paying the tourism levy until August 31, 2020 for amounts that become due to government on or after March 27, 2020.
In addition, six banks in Canada (BMO, CIBC, National Bank, RBC, Scotiabank and TD Canada Trust) have offered specific financial relief programs for their clients, including up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products.
Canadian Securities Administrators
The COVID-19 situation has also impacted a number of market participants. The Canadian Securities Administrators have recently published an article providing guidance on conducting annual general meetings for reporting issuers during this period. We have also discussed the issue of providing relief from certain regulatory filings as well as certain risk factors and disclosure during this time period.
At Fasken, our team of lawyers are available to guide you through these turbulent times. We have a great deal of experience in dealing with commercial uncertainty and are available to assist you in overcoming these extraordinary economic conditions. Please do not hesitate to reach out to us with any inquiries you may have.
Useful Links
General Information on Support Programs
- COVID-19 Information for Albertans
- COVID -19 Information for Businesses and Employees
- Canada's COVID-19 Economic Response Plan
- Government introduces Canada Emergency Response Benefit to help workers and businesses
- Department of Finance Canada - Latest Announcements
- A dedicated COVID-19 tile has been added to the Canada Business App, providing links to government announcements and information for businesses
Active Government Programs Available to Support Businesses
- Additional Benefits and Services offered by the Government of Canada
- Application for Canada Emergency Response Benefit through CRA My Account
- Business Credit Availability Program
- Business Development Bank of Canada Small Business Loan
- Business Development Bank of Canada Working Capital Loan
- Business Development Bank of Canada – Venture Capital
- Canada Emergency Response Benefit
- CRA: Helping Canadians with the economic impact of the COVID-19 Pandemic
- EDC-BDC Purchase Order Financing
- Employment Insurance Benefits
- How the Business Development Bank of Canada Plans to Support Entrepreneurs
- How the Export Development Canada Plans to Help Businesses
- Resources for Canadian Businesses
- Start Alberta
- Support for Albertans
- Support for Employers and Employees
- Temporary Wage Subsidy
- What Canada's Regional Development Agencies are doing to help businesses
- Work-Sharing Program – Temporary Special Measures
- Work-Sharing - Income Support to Avoid Layoffs
- Labour, Employment & Human Rights Bulletin
Impact on Market Participants
- Guidance on Conducting Annual General Meetings during COVID-19
- Canadian Securities Regulators Will Provide Blanket Relief to Market Participants due to COVID-19
- Risk Factors and Disclosure in the Time of COVID-19
- Proposed Tax Measures to Stabilize the Economy during COVID-19 (Canada)
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