UPDATE REGARDING COVID-19
APRIL 8, 2020
The Federal and Provincial Governments continue with regular announcements regarding the current Covid-19 situation and how it affects taxpayers. We are staying on top of the daily information and remain ready to answer any questions you may have. This update is current to April 8, 2020 11am. Please consult the Government web pages for up to date information.
We want to thank all of our clients who have sent in their information electronically or limited office visits to drop off and pick-up only. We know that this can be a challenge but the safety of all our clients and staff must come first. Fortunately, all of our staff remain healthy and we do not know of any clients that have contracted the virus.
While some of our staff continue to work from home, the office remains open to receive your information. If you choose to drop your information personally, please make use of our hand sanitizer and practice social distancing conventions as best you can. If you would like to send us files electronically you can use our secure portal, this can be arranged by emailing Kristi Spence at kspence@bandp.ca or by calling the office at (204) 831-1700.
Some of the measures that the Government announced can be found at CRA’s website listed below and include:
BUSINESSES
WAGE SUBSIDIES
CANADA EMERGENCY WAGE SUBSIDY
The government will provide a benefit up to 75% of pre-crisis wages for eligible employers for up to 12 weeks, retroactive to March 15, 2020
Eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities.
This subsidy would be available to eligible employers that see a drop of at least 30 per cent (15 per cent for March 2020) of their revenue (see Eligible Periods). In applying for the subsidy, employers would be required to attest to the decline in revenue.
The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:
- 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
- the amount of remuneration paid, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration, whichever is less.
In effect, employers may be eligible for a subsidy of up to 100 per cent of the first 75 per cent of pre-crisis wages or salaries of existing employees. These employers would be expected where possible to maintain existing employees’ pre-crisis employment earnings.
Eligible remuneration may include salary, wages, and other remuneration. These are amounts for which employers would generally be required to withhold or deduct amounts to remit to the Receiver General on account of the employee’s income tax obligation. However, it does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.
The subsidy amount for employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020. A special rule will apply to employees that do not deal at arm’s-length with the employer. For non arm’s-length employees, the rebate is limited to 75% of wages actually paid during this period.
- The maximum rebate for any employee is the lesser of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration.
- There is no overall limit on the subsidy amount that an eligible employer may claim.
- Employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.
- Employers will also be eligible for a subsidy of up to 75 per cent of salaries and wages paid to new employees.
Eligible Periods
Eligibility would generally be determined by the change in an eligible employer’s monthly revenues, year-over-year, for the calendar month in which the period began. The amount of wage subsidy (provided under the COVID-19 Economic Response Plan) received by the employer in a given month would be ignored for the purpose of measuring year-over-year changes in monthly revenues.
For example, if revenues in March 2020 were down 50 per cent compared to March 2019, the employer would be allowed to claim the Canadian Emergency Wage Subsidy (as calculated above) on remuneration paid between March 15 and April 11, 2020.
The table below outlines each claiming period and the period in which it has a decline in revenue of 30 per cent or more (15 per cent for March).
For eligible employers established after February 2019, eligibility would be determined by comparing monthly revenues to a reasonable benchmark.
How to Apply
Eligible employers would be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly.
Interaction With the 10 Percent Wage Subsidy
Any amounts claimed under the 10 percent Temporary Wage Subsidy would reduce the 75 percent Emergency Wage Subsidy.
Follow this link for up to date information on the Canada Emergency Wage Subsidy.
https://www.canada.ca/en/department-finance/news/2020/04/the-canada-emergency-wage-subsidy.html
TEMPORARY WAGE SUBSIDY FOR EMPLOYERS (ORIGINAL WAGE SUBSIDY STILL IN EFFECT)
The Government is providing a wage subsidy for non-profit organizations, registered Charities and Canadian controlled private corporations equal to 10% of wages paid from March 18, 2020 to June 20, 2020. The maximum subsidy will be $1,375 per employee and to $25,000 per employer. You will receive this subsidy by reducing your remittance of Federal, Provincial or Territorial income tax starting with your April remittance. If you choose not to reduce your remittances, other options will be available to receive the subsidy. Follow the link below for the Government of Canada Frequently asked questions page.
CANADA EMERGENCY BUSINESS ACCOUNT
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. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).
The loans are arranged through your primary financial institution.
SME Loan Guarantee program
BDC co-lending (with financial institutions up to $6.25 million at commercial interest rates over a 10-year repayment period. Contact your financial institution for more information.
Follow this link for information on the Canada Emergency Business account and SME Loan Guarantee program
WORK-SHARING
The Government is extending the Work-Sharing program. This program allows employers and employees to agree to reduce normal working hours. The employee would be eligible for EI benefits for a 76-week period. For further details on this program, follow the link below.
https://www.canada.ca/en/employment-social-development/services/work-sharing.html
MORE DETAILS CAN BE FOUND ON CANADA’S COVID-19 ECONOMIC RESPONSE PLAN PAGE
https://www.canada.ca/en/department-finance/economic-response-plan.html
TAX DEADLINES AND PAYMENTS
The Governments of Canada and Manitoba have announced an extension of several filing and payments deadlines.
The most up to date information from information can be found at the following links:
https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html
GST
Province of Manitoba
https://www.gov.mb.ca/finance/taxation/pubs/bulletins/noticerst2003.pdf
https://www.gov.mb.ca/finance/taxation/pubs/bulletins/noticehe2001.pdf
INDIVIDUALS
CANADA EMERGENCY RESPONSE BENEFIT
This will provide a taxable benefit of $2,000 a month for up to 4 months to:
- Residing in Canada, who are at least 15 years old;
- Who have stopped working because of COVID-19 or are eligible for Employment Insurance regular or sickness benefits:
- Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
- Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment income.
Application details will be available through My CRA and My Service Canada beginning the April 6, 2020. Application availability will be staggered by birth month.
The Benefit is only available to individuals who stopped work as a result of reasons related to COVID-19. If you are looking for a job but haven’t stopped working because of COVID-19, you are not eligible for the Benefit.