Government of Canada Announces Additional Economic Measures in Response to COVID-19
On March 27, 2020, the Prime Minister announced additional economic measures in response to the COVID-9 pandemic.
Canadian Governments COVID-19 Economic Response Measures Include:
1. Wage Subsidies
An increase in wage subsidies to 75% for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. The government is hoping employers can keep workers on the payroll. Details of this subsidy will be announced on or before March 31, 2020.
2. Deferral of GST/HST Tax Payments
The federal government will allow 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; 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.
3. Deferral of Customs Duty Payments
For GST and customs duty payments for imported goods, this deferral will include amounts owing for March, April, and May These amounts were normally due to be submitted to the Canada Revenue Agency (CRA) and the Canada Border Services Agency as early as the end of this month (March 31, 2020).
4. Canada Emergency Business account
The federal government is also launching the new Canada Emergency Business Account – a new loan program, that will be implemented rapidly by eligible financial institutions in co-operation with Export Development Canada (EDC). This $25 billion program will provide interest-free loans of up to $40,000 to small businesses and not-for-profit organizations, to help cover their operating costs during a period where their revenues have been temporarily reduced. To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000). Details on accessing this program will be available soon.
5. Loans for the Export Sector
A $20 billion loan guarantee for the export sector through the EDC.
6. Loans for Small and Medium-Sized Businesses
Finally, a $20 billion loan program for small- and medium-sized enterprises through the Business Development Corporation.
The government has confirmed that the new $2000/month Canada Emergency Response Benefit will be taxable.