Canada Announces Economic Assistance Programs
In response to the COVID-19 (coronavirus) pandemic, the Canadian federal government is proposing several economic assistance programs to try and stabilize the economy during the pandemic. The assistance programs focus on wage subsidies, access to credit, deferring the collection of several taxes, and additional time to pay your income taxes.
Specifically, the Canadian government is proposing a wage subsidy program which would subsidize 75 percent of an employers wages for up to 12 weeks. Additionally, the government has established a Business Credit Availability Program (BCAP) to provide $65 billion of additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). BDC and EDC are working with private sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation, exportation and tourism. 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 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. EDC is also working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to small and medium sized enterprises (SME). Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.
In addition to the loan programs, the Canadian government has extended the period for when individuals and businesses need to pay their taxes for almost all taxpayers. For businesses, the new filing date in Canada will be August 31, 2020. Furthermore, the federal government is deferring the payment of their Goods and Services Tax (GST) as well as the Harmonized Sales Tax (HST) for taxes owed between March 27, 2020 and June 1, 2020. This means that you will not be subject to penalties or interest if companies are unable to pay their GST/HST until the end of June.
The Canadian government is in the process of approving and implementing these programs, and some of the programs are being enacted quicker than others. In an effort to help businesses and individuals keep track of the programs implemented by the Canadian Government they have created a website which they are updating as programs change to meet the challenges brought by the coronavirus situation. You may view the Canadian Government's website by clicking here.
If you have any questions regarding the Canadian assistance programs please do not hesitate to contact Jake Jacoby at firstname.lastname@example.org or Andrew Stasiowski at email@example.com.