The support measures for businesses have been coming almost daily, and there is great confusion. Some programs are listed below. However, it is difficult to determine who qualifies for these. For example, wage subsidies are intended to assist businesses in the retention of employees. However, how they will apply to owner operators and if the form of owner remuneration (salary or dividends) impacts the eligibility is unknown at this point. We hesitate to make suggestions but can provide the following information.

• The benefit is 75% of remuneration paid up to a maximum of $847 per week per employee – there is no overall limit.
• Eligible employers include small and large businesses – taxable companies.
• Must show a drop in gross revenues of at least 30%.
• Compare March, April, and May 2020 with the same periods in 2019.
• March 15 – April 11 subsidy is based on a March revenue comparison.
• April 12 – May 9 subsidy is based on an April revenue comparison.
• May 10 – June 6 subsidy is based on a June revenue comparison.
• The accounting method used must be consistent.
• Eliminate non-arm’s-length revenue from both periods.
• Income excludes extraordinary items or items on account of capital.
• You must apply for each claiming period.
• Apply through CRA “My Business Account” or via a soon-to-be-released app – expected April 6.
• CEWS is reduced by any Temporary Wage Subsidy (TWS) claimed (see below).
• Increases in pay won’t be eligible, so you can’t increase wages.
• Does apply to new employees.
• Applies to basic pay – auto benefits not included.
• Reference to non-arm’s-length salary – unclear yet.
• If you do not qualify for this program, you can still apply for the TWS.
• May take 3-6 weeks to implement.
• Considered government assistance and hence is taxable.

If you reduce your hours for all staff by 50%, they will not qualify for individual benefits and the wage subsidy is reduced. Instead, consider retaining half your staff at full-time and allow others to cease employment, hence qualifying for individual benefits. The wage subsidy will be the same either way.

For more details:

April 10 2020 Update

• There have been changes – see link below for details.
• Essentially, the 30% reduction is now changed to 15% reduction for March as shutdowns happened part way through March.
• You can now also compare to same month in 2019 or for the average revenue earned for January and February 2020.
• For those who only paid dividends, we would question the ability to set up a payroll account, start paying salary, and apply for the subsidy. Keep in mind, the intent is to allow businesses with employees to retain employees. So corporations, including professional corps, where payment was by dividends may be ineligible.
• Also continue to consider the 10% wage subsidy if you do not qualify for the 75% subsidy.

April 18 2020 Update

• Now passed into legislation
• Still does not include considerations for those on dividends
• Key limitation is the average weekly salary for Jan 1 to Mar 15, 2020.
• If no salary between those days – no benefits for non arms-length employees (ie family members)
• Can hire arms length benefits
• Considered taxable income to recipient
• Application process will be through your CRA “My Business Account” – not up yet

• Those not qualifying for the 75% subsidy (CEWS) may wish to consider this program.
• Available to CCPCs (most small private Canadian corporations), charities, NPOs, sole proprietorships, and partnerships (if individual partners would otherwise qualify).
• 10% of remuneration paid from March 18, 2020, to June 19, 2020.
• Capped at $1,375 per employee and $25,000 per employer.
• Benefit claimed by reducing payroll remittances (not CPP/EI).
• See CPA Blog and CRA FAQs.

For more details:

Work-Sharing (WS) is an adjustment program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. The measure provides income support to employees eligible for EI benefits who work a temporarily reduced work week while their employer recovers. This program was in place prior to Covid-19 but is more relevant now. The link below provides general information and contains within it a link specific to Covid-19. Changes have been made to the program to make it more responsive to the current situation.

The new Canada Emergency Business Account will provide interest-free loans of up to $40,000 to small businesses and not-for-profits to help them cover their operating costs during a period when their revenues have been temporarily reduced.

To qualify, these organizations will need to demonstrate that they paid between $50,000 and $1 million in total payroll in 2019.

The program administration will be handled by the financial institutions. Details are still coming, but it would appear that the program will operate as a revolving line of credit until the end of 2020. The balance at that point will become a five-year loan maturing on December 2025. No interest will apply until January 1, 2023, after which the interest rate will be 5% with monthly payments. If 75% of the balance is repaid by January 1, 2021, the remaining amount will be forgiven.

Please look to your financial institution for assistance on this program. Your business banking manager would be the first point of contact. Stay tuned for more details on this in the upcoming days.

April 10 2020 Update

• Of the $40,000 loan, $10,000 can be forgiven eventually if 75% is repaid. It is also no interest for the first period.
• However, the business must have paid at least $50,000 in salaries in 2019. You will need to support this with a copy of your T4 summary return filed as part of T4 reporting for 2019.
• If you did not pay salary (or paid less than $50,000) and/or relied upon dividends – your company does not qualify at this time. We have been asked repeatedly about how this can be if dividends are a form of compensation used by many businesses. Keep in mind, the government is intending this to apply to those with arms length employees. The government seems to be less concerned with those shareholders remunerated by dividends, many of whom are professional corporations. We are not convinced they will rectify this flaw in the CEBA.
• If you qualify, apply through your financial institution.

April 18 2020 Update

• The minimum salary requirement has been reduced from $50,000 to $20,000 and maximum to $1.5 Million.

New April 18 2020

• New program - details not available yet – will involve Federal and Provincial governments
• Commercial landlords will be eligible for loans, including forgivable loans, to those who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), Mar and June.

April 10 2020 Update

There are two new programs announced. One if for the individual benefit and the link below provides details. Links for each are provided below.

• This is a supplemental program to the CERB for Nova Scotians and applies to employees who lost their jobs or self employed with individual who lost revenue due to Covid-19.

April 18 Update

• If you were laid off or out of work on or after 16 March 2020 because of COVID-19 and you aren’t eligible for Employment Insurance, you may be eligible for the Worker Emergency Bridge. The Worker Emergency Bridge is a one-time $1,000 payment to help you meet your basic needs as soon as possible. It can be combined with the Canada Emergency Response Benefit (CERB). The payment counts as taxable income and you’ll need to include it on your 2020 tax return.
•  See details below

• 15% of sales from April 2019 or February 2020 up to a maximum of $5,000.
• Restricted generally to those businesses forced to close.
• See eligibility criteria and details at link below.

April 18 2020 Update

• Applies to businesses directed to close or to substantially curtail operations in the Covid-19 public health order
• Anticipate revenue loss of at least 30% for April 2020
• Established prior to March 15, 2020
• Sole proprietors, partnerships, corporations (if pays small business tax rate), societies, social enterprises, not-for-profits, charities in business and other similar organizations
• Grant is 15% of the business’s monthly revenue from sales up to a maximum grant of $5,000

• If you have a holding company, consider taking payments from there or your professional corporation as shareholder loan payments. Doing so allows you to tap into the cash source (minimize it as much as you can) but do not take these as dividends and try to avoid going through the trust. This will keep your personal income low so as to qualify for current or potential future benefits. Taking salary or dividends would likely disqualify you for benefits.
• The Halifax Chamber of Commerce and Canadian Federation of Small Business have good summaries. Links provided below.

New April 15 2020 

• Applies to both residential and business customers
• Payments due April 30, 2020 now due June 1, 2020
• Suspension of NSF fees
• Reduction of the interest rate on arrears from 15% to 10%