COVID-19 COVID-19-related cash-flow challenges for businesses
Friday, March 20, 2020 8:00:00 AM
- Call BDC (1-877-232-2269) and your bank ASAP if you expect to encounter COVID-19-related cash-flow challenges.. -
A full rundown of federal government supports for businesses can be found here, but here’s a quick(ish) overview of measures announced to support Canadian businesses during the crisis:
• Increased credit is available to Canadian businesses through the Business Credit Availability Program, providing more than $10 billion of additional support through BDC, EDC, etc.
• Canadian big banks have committed to provide small and medium enterprise customers with flexible solutions to help them get through COVID-19. The federal government is providing additional liquidity to these banks to ensure business continuity.
• Businesses can defer, until after Aug. 31, 2020, the payment of any income tax amounts that become owing on or after March 19, 2020 and before September 2020. This relief will 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.
• A temporary wage subsidy for small businesses has been introduced. To prevent layoffs, small employers facing losses will be eligible for 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. This measure essentially eliminates the payroll tax for three months.
• The Work-Sharing Program will be enhanced to help businesses pay wages and avoid layoffs. The program works this way: workers remain on the payroll, but their hours are reduced, with the federal government helping to make up for the drop in income for these workers.