*Update* on New Canadian Economic Measures for Businesses
On Friday March 27th, we wrote about the new economic measures taken by the government of Canada to help businesses get through the COVID-19 pandemic. On Monday March 30th, a few more details were released in this regard, although we are still waiting for more specifics to be released.
Increased Wage Subsidy
The previously announced wage subsidy would allow small businesses to withhold 10% of remunerations paid to their employees as a tax credit. The new Canada Emergency Wage Subsidy will be covering 75% of employees' salaries on the first $58,700, which means that it will cap at $847 per week per employee. The subsidy will be backdated to March 15th.
The size of a company or the number of employees it has will not impact whether or not they qualify for this subsidy, so this new measure will have a great impact on businesses of all sizes. In order to qualify for this wage subsidy, a business' revenue must have dropped by at least 30%. There is a chance that if a business for example only saw a 25% decrease in revenue, they could receive the subsidy and later repay part of it based on the remaining 5%, but this has not been confirmed.
Deferred GST/HST Payments
In order to provide additional help to keep businesses afloat, it was announced that companies will be able to defer GST and HST payments until the end of June.
No more details have been released around this.
Small businesses will also be able to take out up to $40,000 in bank loans, which will be interest-free for the first year. In addition it was announced that up to 25% of the loan will be forgiven if it is repaid by December 31st, 2022. This is a great opportunity for small businesses to inject some cash into their business during these difficult times.
If you need help applying for such a loan, please reach out to us at firstname.lastname@example.org or call us at (778) 860-6141.
The Canadian government is working hard to figure out the best ways to help Canadian businesses stay afloat through the COVID-19 pandemic, and a lot of the details around the economic measures that are being taken to ensure this will come out little by little. We will continue to do our best to make sure that you get all the information you need to help your business tackle this pandemic, and fill in the details as they are released.