Wage Subsidy Launching April 27

A new calculator is being launched on the Canada Revenue Agency (CRA) website to help businesses determine how much they will be able to claim through the wage subsidy program. Justin Trudeau said employers will be able to apply as of April 27 for the 75% salary top-up to keep staff on the payroll.

Treasury Board President Jean-Yves Duclos said the new dedicated webpage will allow employers to get a sense of what to expect to receive through the massive economic program set to cost $73 billion. “It is expected that 90% of the applications will have been processed by May 5, with direct deposits and cheques made and sent soon after,” Duclos said.

In advance of the application opening, the CRA is encouraging businesses to sign up for a business account, and are noting that all claims will be subject to verification by the CRA. The calculator allows employees to plug in the number of employees they have and their gross payroll to better determine specific line amounts they should use when they go to apply, officials said. The entire first batch of applications will be processed at the same time, by the end of next week, so there is no need to log in first thing on April 27, officials said.

While there is some concern about fraud or companies seeking to exploit tax loopholes to tap into more funds than they should be eligible for, the national revenue body says it’s confident its internal auditing team will be able to identify any irregularities. Business owners found to be misusing the funds could face up to five years in prison and heavy fines, potentially having to pay 225% of what they received.

“We hope to be able to get this help out to businesses to keep employees on their payroll as quickly as possible,” Trudeau said, noting that eight million Canadians who are out of work or whose income has been considerably reduced have now applied for the $2,000 a month Canada Emergency Response Benefit.

During the April 20 meeting of MPs on Parliament Hill various ministers continued to indicate that more help is coming, with some economic programs still being finalized and expected to be ready to accept applicants in the coming days.

Click here to lean more about the Canada Emergency Wage Subsidy (CEWS)

Source: CTV News

Trudeau Lowers the Bar for Small Business Loans, Says Rent Relief Coming Amid Coronavirus Crisis

Prime Minister Justin Trudeau has announced more measures to help Canadian businesses get through the COVID-19 crisis, including expanded loan eligibility and assistance with commercial rent. 

The previously announced loan program, which offers businesses up to $40,000 in a government-backed loan, will now be available to businesses with payrolls worth between $20,000 and $1.5 million. Up to $10,000 of the loan is non-repayable.  Trudeau said 195,000 loans amounting to about $7.5 billion have been approved since the loan program opened for applications.

“No one should feel as if they’re alone in this fight,” Trudeau said. “Our government is here to help you through these challenging times. So when we hear the program is not reaching as many people as it should, we make changes.” “This is money entrepreneurs and employers can use to cover operational costs and help with other immediate needs,” Trudeau said.

Trudeau also announced a plan to help small businesses pay commercial rents for April, May and June. He said that plan will be worked out with the premiers, as rent issues fall under provincial jurisdiction.  Business groups praised the measures announced on April 16th but called for even broader eligibility requirements and quick delivery of rent relief.  

The Canadian Chamber of Commerce said rent is one of the biggest fixed costs for businesses and the ability to pay it is often a factor in determining whether a firm can survive. The Canadian Federation of Independent Business (CFIB) said rental costs should be reduced or eliminated, not just deferred.  “CFIB is also working to ensure there is support for small business owners with commercial mortgages.”  

Both CFIB and  the Chamber said changes to the loan program will help more small businesses access the funds but pointed out that new firms, the self-employed and businesses that pay with dividends still will not qualify. 

“This program will provide support to help small businesses with their rents for the months of April, May and June,” Trudeau said. “To implement this program, we have to work with the provinces and territories as they govern rental relationships.”

Click here to lean more about the Canada Emergency Business Account (CEBA)

Source: Financial Post

Ottawa to Provide $250 Million to Prop up Strategic Innovative Firms Hurt by COVID-19

The Canadian tech sector is expressing cautious optimism about a federal government announcement of $250 million in new funding to prop up innovative, strategically important startups during the COVID-19 crisis. For weeks, high-growth startups have been saying that the suite of federal funding programs left them out in the cold, and some technology companies have already been forced to lay off workers.

The finances of early-stage technology companies are often radically different than established firms, with some companies not recording any revenue during pre-market product development, and other startups recording triple-digit growth as they rapidly scale. In both scenarios, those companies are likely unable to establish the 30% revenue drop that would qualify them for Ottawa’s 75% wage subsidy.

Many technology startups also rely heavy on stock options as a form of compensation, and that isn’t covered by the wage subsidy either. In an interview,  Innovation Minister Navdeep Bains said that the money will be specifically for labour costs, and the government will be delivering the money through the existing Industrial Research Assistance Program. Bains said IRAP allows the government to be flexible and give money on “a case-by-case basis” to strategically important firms.

“We’re looking for high-impact firms that are dealing with new technologies, or companies that have a significant amount of their payroll dedicated to R&D,” Bains told the Financial Post. “We want to be able to make sure that people who have good ideas, that are focused on research and development, that are focused on new technology, that are focused on solutions, are considered.”

Bains said he believes the funding will help upward of 1,000 Canadian tech companies, and support 10,000 jobs through the crisis. The government said applications will open on the week of April 20th.

Click here to lean more about the NRC COVID-19 programs.

Source: Financial Post

Trudeau Hosts Call With Premiers on Wage Boost, Reopening Economy and Andrew Scheer Repeats His Call for Regular In-Person Sittings in the House of Commons

Trudeau spoke with the premiers and re-opening the economy was on the agenda. But the prime minister warned that taking such steps too early could undo the progress made to date in containing the virus. “We know that there are lots of conversations to be had about how we reopen our economy, what happens in the right order, what the sequencing is, how we keep people safe. But we’re a long way from having the ability to start doing that.”

Ontario Premier Doug Ford’s spokesperson said in email that, “The premier is interested in hearing what other provinces and the federal government are looking to do in terms of first steps, as well as ensuring support for the most heavily impacted sectors in Ontario.” Ford also will be seeking clarity on the proposed wage top-up for essential workers. The measure, which Trudeau announced April 15, aims to boost the pay for people who make less than $2,500 a month working essential jobs, such as caring for elderly or vulnerable people.  

Deputy Prime Minister Chrystia Freeland said the details of the shared federal-provincial program would be worked out in collaboration with the premiers.  The supply of personal protective equipment (PPE) and procurement of other vital supplies will also be discussed. Trudeau also spoke with G7 leaders today about global efforts to combat COVID-19.

Conservative Leader Andrew Scheer held a news conference in Ottawa to repeat his call for regular in-person sittings in the House of Commons, and said the opposition parties have been effective in improving legislation to provide better benefits for Canadians struggling financially due to the pandemic.  He said the operations of Parliament should be deemed an “essential service” to ensure government accountability and transparency.  

Scheer has proposed scaled-down sessions in the House involving a smaller number of MPs attending in person four times a week while respecting physical distancing guidelines.  He suggested that he is willing to compromise on that number — but said having no in-person sittings at all is “unacceptable.”  The House is scheduled to return on April 20 and the parties have not yet reached an agreement to alter the Commons calendar.  

Source: CBC

Canada’s COVID-19 Economic Response Plan

The Government of Canada is taking immediate, significant and decisive action to support Canadians and businesses facing hardship as a result of the global COVID-19 outbreak. For a full list of programs please visit Canada’s COVID-19 Economic Response Plan webpage.