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  • Writer's pictureFort Group CPA

COVID-19 Update: Government Subsidies for Businesses

On October 9, 2020, the Government of Canada announced new and extended programs aimed at helping businesses with reduced revenues and increased costs as a result of the COVID-19 pandemic operate through the end of 2020 and first half of 2021.

New legislation is expected to be introduced and passed shortly.

These new and extended measures include:

Canada Emergency Rent Subsidy

  • Will replace the Canada Emergency Commercial Rent Assistance (CECRA)

  • Will provide rent and mortgage support until June 2021

  • Subsidy will be provided directly to tenants, while also providing support to property owners

  • Businesses, charities and non-for-profit organizations that have experienced the required revenue shortfall would be eligible

  • Can retroactively make claim back to period commencing September 27, 2020

  • Up to 90% subsidy for eligible expenses for organizations that have been forced to shutdown due to mandatory public health orders

Update Regarding Canada Emergency Wage Subsidy (CEWS)

  • The current wage subsidy program has been extended until June 2021

  • The subsidy will remain at the current maximum subsidy rate of 65% for the September 27, 2020 to October 24, 2020 period

  • 65% subsidy rate includes:

    • A maximum base subsidy rate of 40% if revenue is down

    • A maximum top-up subsidy of 25% if revenue is down

Update Regarding Canada Emergency Business Account (CEBA)

  • Additional $20,000 interest-free loan being offered to businesses and non-for-profits impacted by the pandemic

  • $10,000 of the additional $20,000 of funding would be forgivable if repaid by December 31, 2022

  • Application deadline for CEBA has been extended to December 31, 2020

  • Attestation of pandemic’s impact on business required to access additional financing

Update on Manitoba Wage Subsidy Programs

Over the last couple of months, the Manitoba Government has developed support programs to encourage organizations to hire or re-hire employees.

The Back to Work in Manitoba Program has been updated in the following ways:

  • Program extended to December 31, 2020

  • Promotes the hiring and re-hiring of employees in the private and non-for-profit sectors

  • Program covers 50% of wage costs between July 16 and December 31, 2020, to a maximum of $5,000 per worker

  • Businesses must not have received support from other government subsidies for the same positions

  • Employee start date must be July 16, 2020 or later

  • Application deadline extended to December 1, 2020

  • Payments will be made as a lump sum upon proof of payment of wages

Additional Programs

For those who do not qualify or have not received the Canada Emergency Business Account (CEBA), there is an additional loan available through the Western Economic Diversification’s Regional Relief and Recovery Fund (RRRF).

  • Businesses must have been impacted by pandemic

  • Sole proprietors and not-for-profits organizations are not eligible for this loan

  • Information regarding 2020 revenue and expenses is required for the application process

There are 2 categories for this loan:

Category #1

  • Loan of $40,000 or less

  • 75% of the financing must be repaid (similar to CEBA)

  • No scheduled repayments until 2022

Category #2

  • Loan between $40,000 and $1,000,000

  • 100% of the financing must be repaid

  • No scheduled repayments until 2022

Applications will be accepted on an ongoing basis and program will close once all funds to eligible businesses are successfully disbursed

More Information to Come

Over the coming weeks, Fort Group will be providing more information and guidance about:

  • PD27 Form & T4 Summary & slips - Additional payroll reporting will be required for businesses that have claimed the 10% Temporary Wage Subsidy and/or the Canada Emergency Wage Subsidy

  • Home Office expenses - What needs to be provided to employees who worked at home for part of the year due to COVID-19.

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