The deadline for most individuals to file their 2019 taxes has been extended to June 1, 2020. The deadline to pay amounts owed has also been extended to September 1, 2020. Penalties and interest will not be charged if payments are made by the extended deadlines of September 1, 2020. This includes the late-filing penalty as long as the return is filed by September 1, 2020.

If you, your spouse, or your common-law partner are self-employed, you still have until June 15, 2020, to file your taxes. However, your payment deadline has also been extended to September 1, 2020.

For those who have to pay by instalments, the June 15, 2020, payment due date has also been extended to September 1st. Instalment penalties and interest will not be charged for this payment if it is made by the extended deadline of September 1, 2020.

For more information on the filing and payment deadline changes due to COVID-19, go to Income tax filing and payment deadlines: CRA and COVID-19.

Why file by the deadline if no payment is due until September 1?

Filing by the deadline will minimize impacts to your benefit and credit payments. If your 2019 return has not been assessed by the CRA, information from your 2018 return will be used to calculate benefit and credit payments until September 2020. That will ensure you continue to receive important payments that will help through the COVID-19 crisis. However, you may not be getting exactly the right amounts. By filing a return by the deadline, you will minimize this impact. Also, if you are owed a refund, the earlier you file, the earlier it will arrive in your pocket. By registering for direct deposit, you’ll get your refund even faster.

1. What is the Temporary Wage Subsidy for Employers?

The Temporary Wage Subsidy for Employers is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA).

2. Which employers are eligible?

You are an eligible employer if you:

• are a non-profit organization, registered charity, or a Canadian-controlled private corporation (CCPC);
• have an existing business number and payroll program account with the CRA on March 18, 2020; and
• pay salary, wages, bonuses, or other remuneration to an employee.

Note: CCPCs are only eligible for the subsidy if their taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, is less than $15 million.

The Temporary Wage Subsidy for Employers is limited to the eligible employers listed above.

3. How much is the subsidy?

The subsidy is equal to 10% of the remuneration you pay between March 18, 2020, and June 20, 2020, up to $1,375 per employee and to a maximum of $25,000 total per employer.

Associated CCPCs will not be required to share the maximum subsidy of $25,000 per employer.

For example, if you have 5 employees, the maximum subsidy you can receive is $6,875 ($1,375 x 5 employees), even though the per employer maximum is $25,000.

4. How do I calculate the subsidy?

The subsidy must be calculated manually unless your payroll program does it for you.

Here is a sample calculation to assist you:

Employee view example:

Employee Gross Wages $1,000

Less Income Tax ($300)

Less CPP ($30)

Less EI ($20)

Employee Net Pay $650

Employer source deductions tax responsibility:

Income Taxes $300

CPP – match $30

EI – match (1.4x 20) – $28

Tax liability $358

Less subsidy (10% x $1000 gross earnings)= ($100)

Adjusted Tax liability to remit – ($358-100)= $258

As this tax break is for the business, the entry required would be:

Debit – Tax liability $100

Credit – Other Income $100 (this subsidy is confirmed to be taxable)

If you need assistance with this calculation, please reach out.

5. How will I receive the subsidy?

Once you have calculated your subsidy, you can reduce your current remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy.Important: You cannot reduce your remittance of Canada Pension Plan contributions or Employment Insurance premiums.

For example, if you calculated a subsidy of $2,050, you would reduce your current remittance of federal, provincial, or territorial income tax by $2,050. You could continue reducing future income tax remittances, up to the maximum of $25,000, for all remuneration paid before June 20, 2020.

6. When can I start reducing remittances?

You can start reducing remittances of federal, provincial, or territorial income tax in the first remittance period that includes remuneration paid between March 18, 2020, and June 20, 2020.

For example, if you are a regular remitter, you can reduce your remittance that is due to the CRA on April 15, 2020.

7. What if subsidies exceed the remittances?

If the income taxes you deduct are not sufficient to offset the value of the subsidy in a specific period, you can reduce future remittances to benefit from the subsidy. This includes reducing remittances that may fall outside of the application period for the wage subsidy (after June 20, 2020).

For example: If you calculated a subsidy of $2,050 on remuneration paid between March 18, 2020, and June 20, 2020, but only deducted $1,050 of federal, provincial, or territorial income tax from your employees, you can reduce a future income tax remittance by $1,000, even if that remittance is in respect to remuneration paid after June 20, 2020.

8. Will the subsidy affect deductions from my employees?

No. You will continue deducting income tax, Canada Pension Plan contributions, and Employment Insurance premiums from salary, wages, bonuses, or other remuneration paid to your employees, as you currently do. The subsidy is only calculated when you remit these amounts to the CRA.

9. What if I don’t reduce remittances during the year?

If you are an eligible employer, but choose not to reduce your payroll remittances during the year, calculate the temporary wage subsidy on remuneration paid between March 18, 2020, and June 20, 2020. You can then ask for the subsidy to be paid to you at the end of the year, or transferred to the next year’s remittance.

10. What books and records do I need to support the subsidy?

You will need to keep information to support your subsidy calculation. This includes:

• the total remuneration paid between March 18, 2020, and June 20, 2020;
• the federal, provincial, or territorial income tax that was deducted from that remuneration; and
• the number of employees paid in that period.

The CRA is currently updating reporting requirements. More information on how to report this subsidy will be released in the near future.

11. Is the subsidy considered taxable income?

Yes. If you receive the subsidy, you have to report the total amount as income in the year in which the subsidy is received.

12. What if my business is closed?

If you did not pay salary, wages, bonuses, or other remuneration to an employee between March 18, 2020, and June 20, 2020, you cannot receive the subsidy, even if you are an eligible employer.

Emergency isolation support

• Eligible working Albertans can receive a one-time emergency isolation support payment of $1,146 if they:
  • experienced total or significant loss of income as a result of having to self-isolate, or are the sole caregiver of a dependent who is self-isolating, and
  • have no other source of compensation, such as workplace sick leave benefits or federal employment insurance benefits

Utility payment deferral

• Residential customers can defer electricity and natural gas bill payments for the next 90 days to ensure no one will be cut off, regardless of the service provider.
• This program is available to Albertans who are experiencing financial hardship as a direct result of COVID-19. For example, those who have lost their employment or had to leave work to take care of an ill family member.
• Call your utility provider directly to arrange for a 90-day deferral on all payments.

Learn more about the 90-day utility payment deferral (PDF, 128 KB)

Student loans repayment deferral

We are implementing a six-month, interest free, moratorium on Alberta student loan payments for all Albertans in the process of repaying these loans.

• Alberta Student Loan repayments will be paused for 6 months, beginning March 30, 2020.
• Interest will not accrue during this period. This mirrors the approach of the Canada Student Loans Program. This mirrors the approach of the Canada Student Loans Program.
• Students do not need to apply for the repayment pause.
• Borrowers may continue making payments during this period if they choose and this will not affect their eligibility to receive the benefit.

Banks and credit unions

ATB financial customers

• Personal banking customers can apply for a deferral on their ATB loans, lines of credit and mortgages for up to 6 months.

Alberta Credit Unions

• Credit union members will have access to a variety of programs and solutions designed to ease difficulties with loan payments and short-term cash flow.
• Contact your credit union to work out a plan for your personal situation

Education property tax freeze

• Residential education property tax rates will be frozen at last year’s level – reversing the 3.4% population and inflation increase added in Budget 2020.
• This will save households $55 million.

Updated July 29, 2020

Canada Emergency Student Benefit (CESB)

The Canada Emergency Student Benefit (CESB) provides financial support to post-secondary students, and recent post-secondary and high school graduates who are unable to find work due to COVID-19.

Please read our blog post for full details on this benefit at: https://seniuk.com/canada-emergency-student-benefit-cesb/

Support for Seniors

One-time non-taxable payment for seniors:

• $300 for seniors eligible for the Old Age Security pension, and
• an additional $200 for seniors eligible for the Guaranteed Income Supplement

This measure will give a total of $500 to seniors who receive both the Old Age Security pension and the Guaranteed Income Supplement, and will help them cover increased costs caused by COVID-19. You do not have to apply.  All individuals who are eligible to receive the Old Age Security pension or the Guaranteed Income Supplement in June 2020 will receive the one-time payment for seniors.

Registered Retirement Income Funds (RRIFs) minimum withdrawal reduced:

The minimum withdrawals requirement from RRIFs will be reduced by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors’ retirement savings.

Temporary extension of 2019 OAS payments

OAS payments to non-resident seniors have been temporarily extended if their 2019 OASRI has not been assessed. This will ensure that the most vulnerable seniors continue to receive their benefits when they need them the most. To avoid an interruption in your benefits, you are encouraged to submit your 2019 OASRI as soon as possible and no later than October 1, 2020.

Canada Emergency Response Benefit (CERB)

This is a $2000/month taxable benefit for up to 16 weeks between March 15 and October 3, 2020, for workers who lose their income as a result of COVID-19

Availability:

• Applications will start to be accepted April 6th
• Funds expected to be direct deposited into bank accounts within 3 -5 business days, or 10 business days if no direct deposit
• Payment to be made every 4 weeks
• For those individuals who have no income as a result of COVID-19
• Available to those individuals who have no income because:
  • Lost their job
  • Are sick/quarantined or taking care of someone who is sick
  • Working parents that must stay home without pay because of children who are sick, or because of school/daycare closures
  • Others who may not otherwise be eligible for EI, but have lost their income

Eligibility:

• Applies to wage earners, contract workers & self-employed individuals who wouldn’t be eligible for EI
• Any resident of Canada who is 15 years old or older and for 2019 or inthe 12 month period preceding the day on which you make an application has total income of at least $5000 from:
  • Employment
  • Self employment
  • EI Maternity Benefits
  • EI Parental Benefits
• You are not eligible if:
  • Your income has only decreased. You must show that you have NO income for a minimum period of 14 consecutive days within each four week period.
  • You are currently collecting EI.  

Application process:

• Applications to start being accepted April 6th.
• You will be able to apply in one of these three ways:
  • by accessing it on your CRA MyAccount secure portal;
  • by accessing it from your secure My Service Canada Account; or
  • by calling a toll free number equipped with an automated application process. (Phone number not yet available)
• Canadians receiving EI already (regular or sickness) should not apply to CERB
  • If benefits end before Oct 3, they could apply for the CERB once the EI benefits end, if they are still unable to return to work
  • Canadians who have applied for EI but application not yet processed would not need to reapply.
• Canadians eligible for EI would be able to access their normal EI benefits after the 16 week period covered by CERB
• If you have already applied for EI but not yet received any benefits your application will automatically be transferred over.
• You must reapply every 4 weeks

There are two ways to apply:

1. Online
2. Over the phone with an automated phone service:
   1-800-959-2019 or 1-800-959-2041

Both of these services are available 21 hours a day, 7 days a week. Both services are closed from 3:00 a.m. to 6:00 a.m. (Eastern time) for maintenance.

Employment Insurance Applications

Here is the information and links to apply online for EI depending upon your situation:

Employment Insurance Regular Benefits (Layoff due to shortage of work – closure not due to quarantine/sickness) – There is a 1 week waiting period before you will receive benefits

Employment Insurance Sickness Benefits (Layoff due to quarantine or self-isolation)

For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is:

• Waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure is in effect as of March 15, 2020.
• Waiving the requirement to provide a medical certificate to access EI sickness benefits.
• Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to:
  • Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
  • Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not quality for EI sickness benefits.
  • Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.

Application for the Benefit will be available in April 2020, and require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility. Canadians will select one of three channels to apply for the Benefit:

1. by accessing it on their CRA MyAccount secure portal at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html;
2. by accessing it from their secure My Service Canada Account at https://www.canada.ca/en/services/benefits/ei/ei-regular-benefit/apply.html; or
3. by calling 1-800-531-7555 or 1-800-206-7218 for an automated application process.

Payment Deferrals and Loan Relief

• The major banks are allowing Mortgage payment deferrals.  You would need to call the bank and request this.  We have been told that wait times are ridiculously long, but they are allowing deferral between 4 and 6 months on personal mortgage payments. Interest will still continue to accrue on your mortgage, it is only principal payments that are being deferred
• Other lenders such as car leasing agencies and credit card companies are making payment arrangements on a case by case basis (you will need to call) and have deferred or lessened payments with little or no interest impact.
• There is a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.

GST and Child Tax Benefit Payments

• On May 15, it was announced that eligible Canadians who are presently receiving the Goods and Services Tax (GST) credit and/or Canada child benefit (CCB) payments will continue to receive these payments until the end of September 2020. Benefit payments starting in July 2020 and those scheduled for August and September won’t be interrupted.
• Increase of the Child Tax Benefit for 2019-2020 by $300 per child. Beginning April 2020.
• No need to apply, you will receive these payments automatically if you qualify
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GST Tax Credit Increase and Payment Changes

You will get an extra GST payment amount automatically if you normally receive the GST/HST credit and have filed a 2018 tax return. Payments will be issued on April 9, 2020.

If you were previously not entitled to the GST/HST credit, but have filed your 2018 tax return, you may also get the one-time credit amount based on your family net income.

The amount you receive will be calculated based on information from your 2018 income tax and benefit return. Therefore, if you didn’t file taxes for 2018, you won’t receive this payment.

If you’re late in filing your 2018 taxes, we encourage you to file as soon as possible. You may be eligible for retroactive benefits and credits. The only way to get them is to file.

If you’re not entitled for the extra GST/HST credit amount, you may be eligible for the Canada Emergency Response Benefit.

How much is the increase?

The one-time payment will be calculated based on information from your 2018 tax return.

The maximum amounts for the 2019-2020 benefit year will increase from:

• $443 to $886 if you’re single
• $580 to $1,160 if you’re married or living common-law
• $153 to $306 for each child under the age of 19 (excluding the first eligible child of a single parent)
• $290 to $580 for the first eligible child of a single parent.

There will be no changes to:

• The family net income used to calculate the amount.
• The family net income used to calculate the single supplement.

The current shared custody rules apply (shared custody parents get half of the amount they would otherwise receive in respect of a shared custody child).

Here’s the link with all of the details – https://seniuk.com/covid-19-supports-for-albertans/

Updated December 1, 2020

Please see below for all the various programs available.

The Government of Canada has also set up a website to help you determine what programs your company could be eligible for at the following link: https://innovation.ised-isde.canada.ca/s/?language=en

Canada Emergency Commercial Rent Assistance (CECRA) for small businesses

CMHC administers CECRA for small businesses on behalf of the Government of Canada. This program will offer unsecured, forgivable loans to eligible commercial property owners to:

• reduce the rent owed by their impacted small business tenants
• meet operating expenses on commercial properties

Please read our blog post for full details about this program: https://seniuk.com/covid-19-canada-emergency-commercial-rent-assistance-cecra-for-small-businesses/

Canada Emergency Wage Subsidy (CEWS) – 75% Wage Subsidy

This program would provide a 75% wage subsidy to eligible employers for up to 12 weeks, from March 15, 2020 to August 29, 2020. There is no cap on this subsidy.

On July 17, 2020, the government announced proposed changes to the CEWS. The proposed changes include:

• Allow the extension of the CEWS until December 19, 2020, including redesigned program details until November 21, 2020.
• Make the subsidy accessible to a broader range of employers by including employers with a revenue decline of less than 30% and providing a gradually decreasing base subsidy to all qualifying employers. This would help many struggling employers with less than a 30-per-cent revenue loss get support to keep and bring back workers, while also ensuring those who have previously benefited could still qualify, even if their revenues recover and no longer meet the 30% revenue decline threshold.
• Introduce a top-up subsidy of up to an additional 25% for employers that have been most adversely affected by the pandemic. This would be particularly helpful to employers in industries that are recovering more slowly.
• Provide certainty to employers that have already made business decisions for July and August by ensuring they would not receive a subsidy rate lower than they would have had under the previous rules.
• Address certain technical issues identified by stakeholders.

Current CEWS Information

Availability:

• Funding will be in the form of direct deposit to the employers bank account.  If direct deposit is not set up, cheques will be mailed out.

Eligibility:

• Canadian Business – Taxable Corporation, Sole Proprietor, Partnership, Charity, or Not for Profit
• Public Bodies are not eligible.
• NOT driven by number of employees.
• NOT driven by size of payroll.
• Applies to existing or new arm’s length employees.
• For employees who are non-arms length to the business (ie, owners, shareholders, family members), the maximum amounts that can be claimed will be determined by pre-crisis salaries paid to these individuals.
• The non-arms length individuals must also have been on payroll prior to March 15th.
• It is not mandatory for the business to pay the remaining 25% of the wage, however it must be attested that every effort was made to do so.
• It does not matter if the business has closed its doors or is still operating. To qualify, you must demonstrate that your revenues in March, April and May have dropped by at least 30% over the same period last year as a result of COVID-19.
• For employers that are eligible for both the CEWS and the 10% Temporary Wage Subsidy for a period, any benefit from the Temporary 10% Wage Subsidy for remuneration paid in a specific period will generally reduce the amount available to be claimed under the CEWS in that same period.

Calculation Process:

• To qualify, you must demonstrate that your revenues in March fell by 15%, and April and May revenues have dropped by at least 30% as a result of COVID-19
• The period of revenue comparison is either over the same period last year or vs. the average of January and February of this year.
• The second comparison metric was designed to address those businesses that are start ups, or have been in high growth mode.

Subsidy Calculation:

Payroll amounts are being driven by pre-crisis amounts paid to employees

• Payroll amounts are being driven by pre-crisis amounts paid to employees.
• The subsidy amount is 75% of wages paid to employees to a maximum of $847/employee/week.

Application Process:

• Businesses will be able to log into “My Business Account” beginning April 27, 2020 to apply. Make sure your business details and direct deposit information for your payroll accounts (RP) are up to date. This will ensure that any payments to you will be processed quickly and easily.
• We may be able to apply on behalf of our clients through “Represent a Client”.
• If you are unable to register for My Business Account, make sure you have an online web access code so you are prepared to use the alternative application.
• Must reapply every month

Full details on the program on the Canada.ca website This link includes all the most current information including an online sample calculator find out how much your wage subsidy may be.

Temporary 10% Wage Subsidy

Organizations that do not qualify for the Canada Emergency Wage Subsidy may qualify for the previously announced 10% Wage Subsidy paid from March 18 to before June 20, 2020. Please see our blog post: 10% Wage Subsidy for additional information and how to calculate this subsidy.

The Temporary 10% Wage Subsidy is a three-month measure that will allow eligible employers to reduce the amount of payroll deduction required to be remitted to the Canada Revenue Agency (CRA).

You are an eligible employer if you:

• are a(n):
  • individual (excluding trusts),
  • partnership.
  • non-profit organization,
  • registered charity, or
  • Canadian-controlled private corporation (including a cooperative corporation) eligible for the small business deduction;
• have an existing business number and payroll program account with the CRA on March 18, 2020; and
• pay salary, wages, bonuses, or other remuneration to an eligible employee.

Note: Partnerships are only eligible for the subsidy if their members consist exclusively of individuals (excluding trusts), registered charities, or Canadian-controlled private corporations eligible for the small business deduction.

Year end reporting – Please follow this link for our latest post regarding reporting requirements: 10% temporary Reporting Post

Canada Emergency Business Account (CEBA) Loan

A new loan program that will be implemented by eligible financial institutions in cooperation with EDC (Export Development Canada).  The program will provide interest free loans of up to $40,000 to small businesses and not-for-profits, to help cover fixed operating costs (payroll, rent, utilities, property taxes) during a period of reduced revenues. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25% or up to $10,000.

Availability:

• The program is now available and application is through your current financial institution.

Eligibility:

The CEBA application process follows one of two streams: (i) the Payroll Stream (Applicants with employment income paid in the 2019 calendar year between Cdn.$20,000 and Cdn.$1,500,000) or (ii) the Non-Deferrable Expense Stream (Applicants with Cdn.$20,000 or less in total employment income paid in the 2019 calendar year).

Every applicant must meet the following criteria:

• Has an active CRA Business Number (BN) with an effective date of registration on or prior to March 1, 2020.
• Has an active business chequing/operating account with the Lender at the time of applying for CEBA. Note: If Borrower currently does not have a business chequing/operating account the Borrower must create one at their primary financial institution before applying for CEBA.
• Has not previously used the Canada Emergency Business Account Program (the “Program”) and will not apply for support under the Program at any other financial institution.
• Intends to continue to operate its business or to resume operations.

If you fall into the Payroll Stream and once you have completed the application with your financial institution, the Government of Canada will assess the application and inform your financial institution of the approval or decline of the loan. If approved, your financial institution will provide the funds into your business chequing / operating account.

If you fall into the Non-Deferrable Expenses Stream you must also meet the following criteria:

• Have eligible non-deferrable expenses between Cdn. $40,000 and Cdn. $1,500,000. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. Expenses will be subject to verification and audit by the Government of Canada.
• Filed an income tax return with the CRA with a tax year ending in 2019 or, if its tax return for 2019 has not yet been submitted, 2018.

CEBA applications under the 2020 Eligible Non-Deferrable Expenses Stream will follow a three-step process:

Step 1: Complete the online Pre-Screen Tool. The Pre-Screen Tool is not a CEBA application and is solely intended to provide a non-binding indication of eligibility to inform your decision of whether to open a business account (if needed) and apply for CEBA at your financial institution. If you are declined at this step you can still apply for CEBA and therefore still need to complete the next two steps as identified.

Step 2: Businesses will initiate applications directly at their primary financial institution where they hold their primary business chequing /operating account. The financial institution will then direct applicants to Step 3 of the application process.

Step 3: Following the initial application through your financial institution, applicants will be directed to a CEBA website to provide supporting documentation of the 2020 Eligible Non-Deferrable Expenses and to complete the application.

The Government of Canada will assess application information submitted via financial institutions together with the supporting documentation and information provided in Step 3. If successful, the Government of Canada will notify your financial institution and provide funding for your CEBA loan.

Use of Funds:

• There are restrictions around the use of the funds being made available. Funds are to be used for operating costs that cannot be deferred – ie. payroll, rent, utilities, insurance, property tax.

Terms:

• 0% interest until Dec 31, 2022
• No minimum monthly principal payments until Dec 31, 2022
• No fees until Dec 31, 2022. If there is an outstanding balance at that time, interest and service charges will be applied
• Principal payments can be made at any time
• $10K loan forgiven if the outstanding balance is fully paid on or before Dec 31, 2022.

Extending the Work-Sharing program

The government is extending the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks. The Work-Sharing program is offered to workers who agree to reduce their normal working hours because of developments beyond the control of their employers.

Apply to the Work-Sharing program

Loan Guarantee for Small and Medium-Sized Enterprises

EDC is working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to SMEs.

Co-Lending Program for Small and Medium-Sized Enterprises

BDC is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements.

Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.

Business Credit Availability Program (BCAP)

If you are concerned about your cashflow in the coming weeks or months, we would highly recommend that you apply for the loan assistance that the government is currently offering for small businesses.  It may help alleviate some cashflow issues, as currently, there is no known timeline for how long there will be self-isolation or quarantine requests.  The application process has moved away from through the BDC links originally provided and are now to be applied through your bank.  Contact your bank representative to apply.

The application process is fairly straightforward and would take you about 30 minutes to complete.  A couple of things to note on these loans:

• They are looking for personal guarantees from the business owner(s)
• They do request information about the personal net worth of the business owner(s)
• You must have been in business for 2 years.
• They are requesting financial and tax information for the last two years of the business (if they approve your initial application)
• This is a loan and not an operating line of credit.  We have not received any information yet as to the structure of the loan and whether there are early repayment plans with no penalty if you end up not utilizing the funds.  
• There is currently no information available on the interest rates, if any, which apply to the loan.
• Working capital loans of up to $2 million with flexible terms and payment postponements for up to 6 months for qualifying businesses;
• Postponement of payments for up to 6 months, free of charge, for existing BDC clients with total BDC loan commitment of $1 million or less.

Learn more about the Business Credit Availability Program

Canada Emergency Commercial Rent Assistance (CECRA)

On April 16, 2020, the Federal Government introduced the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses that, will seek to provide loans and/or forgivable loans to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), May, and June.

Implementation of the program will require a partnership with provincial and territorial governments who are responsible for property owner-tenant relationships.

More details will be available soon.

Support for farmers – Increasing credit available

The government is supporting Farm Credit Canada by allowing an additional $5 billion in lending capacity to producers, agribusinesses, and food processors. This will offer increased flexibility to farmers who face cashflow issues and to processors who are impacted by lost sales, helping them remain financially strong during this difficult time.

The government will provide support of $1,500 for each temporary foreign worker, to employers or those working with them to ensure requirements are fully met. The funding is conditional on employers not being found in violation of the mandatory isolation.

The government has granted an exemption for temporary foreign workers from travel restrictions to Canada, along with other foreigners with student and work visas, provided they adhere to a strict 14-day isolation protocol upon arrival.

Learn more

Insured Mortgage Purchase Program

The government launched an Insured Mortgage Purchase Program, in which the government will purchase up to $150 billion of insured mortgage pools through the Canada Mortgage and Housing Corporation.

This action will provide long-term stable funding to banks and mortgage lenders, help facilitate continued lending to Canadian consumers and businesses, and add liquidity to Canada’s mortgage market.

More time to pay income taxes

The government is allowing all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act.

No interest or penalties will accumulate on these amounts during this period. 

Learn more

Deferral of GST Remittance and Customs Duty Payments

The government will allow businesses, including self-employed individuals, to defer until June 30, 2020 payments of the Goods and Services Tax / Harmonized Sales Tax (GST/HST), as well as customs duties owing on their imports.

The deferral will apply to GST/HST remittances for the February, March and April 2020 reporting periods for monthly filers; the January 1, 2020 through March 31, 2020 reporting period for quarterly filers; and for annual filers, the amounts collected and owing for their previous fiscal year and installments of GST/HST in respect of the filer’s current fiscal year.

For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May.

These amounts were normally due to be submitted to the Canada Revenue Agency and the Canada Border Services Agency as early as the end of this month.

Phone Numbers

BDC – the Canadian government has set up a $10 Billion fund to assist businesses in this period.  The funds for entrepreneurs are currently being administered through the BDC. – More Info

EDC  – The EDC has set up a toll free number number for anyone with any questions relating to exporting as the pandemic and its effects evolve, 1-800-229-0575.

CFIB – Has opened their helpline to all business owners including non-CFIB members for advice on managing COVID-19 situations in the workplace. Call them at 1-888-234-2232.

Important Notice: Due to tax department security changes, for the 2019 personal tax filing, our office is no longer able to enter direct deposit information on behalf of our clients. If you have already signed up for direct deposit, the tax department will use the existing bank account information for any payments you are entitled to receive. Please see the information below on how to set up direct deposit and receive your refund.

How to sign up for Direct Deposit

Online

You can sign up yourself if you are registered for My Account. My Account can help you quickly and easily manage your tax affairs online, including signing up for direct deposit or changing your account information.

Online – mobile application

To start or update direct deposit information, use MyCRA.

Sign up through two financial institutions

Desjardins members and TD Canada Trust customers can now sign up for direct deposit through their financial institutions. Desjardins members can sign up online and TD Canada Trust members can sign up over the phone or in person at their branch.

By phone

To sign up for direct deposit or to change your account information, call 1-800-959-8281. You will need your:

• social insurance number
• full name and current address, including postal code
• date of birth
• most recent income tax and benefit return and information about the most recent payments you received from the Canada Revenue Agency
• banking information: three-digit financial institution number, five-digit transit number, and your account number

By mail

To sign up for direct deposit, follow these steps:

1. Fill out the Canada direct deposit enrolment form.
2. Mail the completed form to the address on the form.

Note

Do not close your old bank account until your first payment has been deposited to your new bank account as it may already be in process.

Business number (BN), Payroll and Goods, and Services Tax (GST)

You may need a new BN. To find out, go to Business number registration.

To find out about payroll accounts and other related topics, go to Payroll overview.

You will want to review the relevant information on GST for the type of business you are buying at Register for a GST account.

Change of ownership

When the owner of a sole proprietorship or one of the partners in a partnership or one of the members of a corporation’s board of directors changes, it is important that you contact your tax services office.

Depending on your business structure, a change of owner(s) will have a different impact on your business. Your partnership agreement and whether or not your business was registered using the legal names of each partner or the provincially registered partnership operating name could require a legal name change, or the registration of a new Business number (BN) and program accounts with the CRA. For corporations, it is important that we have the correct name and social insurance number (SIN) of each director.

Value of the inventory and other assets

When you buy a business, you generally pay a set amount for the entire business. In some cases, the sale agreement sets out a price for each asset, a value for the inventory of the business and, if applicable, an amount that you can attribute to goodwill.

If the individual asset prices are set out in the sale agreement, and the prices are reasonable, then you should use these prices for claiming capital cost allowance (CCA).

If the individual asset prices are not set out in the contract, you have to determine how much of the purchase price you should attribute to each asset, how much to inventory and how much, if any, to goodwill. These amounts should coincide with the amounts the seller determined when reporting the sale. The amount you allocate to each asset should be its fair market value (FMV). You should allocate to goodwill the balance of the purchase price that remains after you allocate the FMV to each asset and to inventory.

Once you have determined the values for the assets and the goodwill, add the fixed assets (such as buildings and equipment) into the appropriate CCA classes. The goodwill is considered to be an eligible capital expenditure and is treated like assets eligible for CCA.

Treat the value of the inventory as a purchase of goods for resale, and include it in the cost of goods sold in your income statement at the end of the year.

For GST/HST purposes, if you buy a business or part of a business and acquire at least 90% of all of the property that can reasonably be regarded as necessary to carry on the business, you and the vendor may be able to jointly elect to have no GST apply to the sale by completing form GST44, Election Concerning the Acquisition of a Business or Part of a Business. You cannot make this election if the seller is a registrant but the buyer is not a registrant. In addition, you must buy all or substantially all of the property, and not only individual assets.

For the election to apply to the sale, you have to be able to continue to operate the business with the property acquired under the sale agreement. You have to file Form GST44, on or before the day you have to file the GST return for the first reporting period in which you would have otherwise had to pay GST on the purchase.

Even if you file the election, GST will still apply to:

• a taxable supply of a service made by the seller
• a taxable supply of property made by way of lease, licence, or similar arrangement
  
• where the buyer is not a registrant, a taxable sale of real property

Another way of buying a business is to buy the shares of an incorporated business. This does not affect the cost base of the assets of the business. Since a corporation is a separate legal entity and it can own property in its own name, a change in the ownership of the shares will not affect the tax values of the assets owned by the corporation.

Generally, the purchase of shares of a corporation is not subject to GST.

Please contact our office if you require any help with your purchase or have any questions.

You can file a GST/HST return electronically, by TELEFILE, or on paper. Before you choose a method, you must determine if you are required to file online and which online method you can use.

For instructions about how to complete each line of your return, see Instructions for completing a GST/HST return.

GST/HST NETFILE is an online filing service that allows registrants to file their GST/HST returns and eligible rebates directly to the Canada Revenue Agency (CRA) over the internet.

My Business Account

My Business Account is a secure online portal that allows you to interact electronically with the CRA on various business accounts. Business accounts include GST/HST (except for GST/HST accounts administered by Revenu Québec), payroll, corporation income taxes, excise taxes, excise duties, and more.

Represent a client

Represent a Client is a service that provides you with secure and controlled online access to tax information on behalf of individuals and businesses, including your employer.

Electronic Data Interchange (EDI)

EDI lets you pay the net tax you owe electronically through a participating Canadian financial institution.

GST/HST TELEFILE

GST/HST TELEFILE is a fast, free, and easy-to-use filing option that allows qualifying registrants to file their GST/HST returns in a matter of minutes, using their touch-tone telephone and a toll-free number.

GST/HST Internet File Transfer

GST/HST Internet File Transfer is an internet-based filing service that allows eligible registrants to file their GST/HST returns directly to the CRA over the internet using their third-party accounting software.

Paper filing

If you are not required to file online, you may be eligible to file a paper return. To use this method, you can either mail your GST/HST return (GST34-2 or GST62) to the address on your return, or file in person at a participating financial institution.

You cannot file in person at a participating financial institution if:

• you are claiming a refund
• you are filing a nil return
• you offset the amount owing on your return with a rebate or refund
  

Your personalized GST/HST return package

Each fiscal year, the CRA will mail you a personalized GST34-3 return package that includes:

• an information sheet with your reporting periods and due dates
• an access code for filing your returns electronically on GST/HST NETFILE or by phone using GST/HST TELEFILE
• remittance vouchers to use if you make your payments at your financial institution

If you are filing electronically and make 2 consecutive electronic payments, the CRA will no longer send you an electronic filing package unless you request one.

If you file on paper, the CRA will send you the GST34-2 filing information package, which also includes personalized returns. You can use the access code provided in the package if you decided to start using GST/HST NETFILE or GST/HST TELEFILE.

If you need a new return package or access code, do one of the following:

• to request a new GST34-2 or GST34-3, call the Business Enquiries phone line at 1-800-959-5525
• to get a new access code for GST/HST NETFILE or GST/HST TELEFILE, go to GST/HST Access Code Online
• to get a non-personalized version of the paper return (Form GST62), use the Order forms and publications

You can also register for My Business Account to view the due dates for your returns, make electronic payments or file your GST/HST returns without an access code.

View a previously filed GST/HST return

You may view the status and the details of a previously filed GST/HST return using My Business Account. You will also be able to view upcoming and overdue GST/HST returns by using the same online service.

GST/HST outreach seminars for non-profit organizations, charities, and similar organizations

GST/HST outreach seminars are informal presentations designed to help non-profit organizations, charities and similar organizations understand their GST/HST obligations and claim all eligible amounts to which they are entitled.

For more information and to register, see GST/HST Outreach Seminars for Non-Profit Organizations, Charities and Similar organizations.

Other GST/HST returns

Depending on your situation, you may have to file a different return. For more information, see:

• GST59 GST/HST Return for Imported Taxable Supplies and Qualifying Consideration
• GST60 GST/HST Return for Purchase of Real Property or Carbon Emission Allowances
• GST489 Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST)

If you cannot pay the full amount of taxes you or your company owes, you may qualify for a payment arrangement or ask for taxpayer relief. Contact the Canada Revenue Agency (CRA) as soon as possible to make arrangements. Ignoring your debt won’t make it go away.

What are your options?

The CRA can work with you to set up a payment arrangement in My Account, My Business Account, MyCRA, or CRA BizApp. The sooner you take action, the less interest you’ll have to pay. To make a payment arrangement for you or your business, go to Pay by pre-authorized debit or contact them directly.

What is a payment arrangement?

A payment arrangement with the CRA lets you make smaller payments over time, until you have paid your entire debt, including interest. The CRA has two new tools that can help you manage your tax debt. Try out our new Payment Arrangement Calculator, which you can use to estimate your payments and the time needed to reduce your debt to zero. The CRA has also introduced an Income and Expense Worksheet. This worksheet will help you calculate the part of your net income that is available to pay your tax debt. To help the CRA determine your ability to pay, you may have to give details of your financial situation and proof of your income, expenses, assets, and liabilities.

For small business owners, the concept of writing a business plan is new and they have no idea where to start. It can be a daunting experience, but when you do it right, the payoff can be enormous.

What is a business plan?

A business plan is the roadmap for your small business’ growth and development. It communicates who you are, what you plan to do, and how you plan to do it.

Why do I need one?

The first thing any investor or venture capitalist will ask for is a business plan. It doesn’t matter how great your pitch is—if your business plan doesn’t hold up to scrutiny, they’re not going to invest a dime. Good business plans give investors an idea of what to expect from your company, and tells them about you as an entrepreneur. It’s the handshake of the small biz sector.

Even if you don’t plan on courting Venture Capitalists, there are other compelling reasons to develop a business plan. Writing out your goals and the action plan to achieve them allows you and your team to view your strategy objectively. It helps you see the holes and blind spots you may not have accounted for, or uncertainties that could cause trouble down the road. If you can discover these weaknesses yourself, you’ll be in a better position to fix them before you start pitching investors.

What makes a good business plan?

Business plans come in many different formats and styles, but the best ones cover the same critical topics:

Purpose. Explain why your small business exists and why it’s important. What problem or need is your business trying to solve? How does it solve your customer’s pain points?

Product/Service. Describe the product or service that you’re offering, and what makes it unique from its competitors.

Customer. Identify your company’s ideal customer. Get into their head, have a clear understanding of their challenges, and explain why your product is perfect for them.

Marketing. How do you plan to promote your brand? Show what you’ve already done, what you plan to do given your existing resources, and what results you expect from your efforts.

Monetization. The key to a sustainable company is a profitable business model. Explain how your business will make money and what kind of ROI (Return on Investment) investors can expect.

Team. A business idea is only as good as the team that executes it. Identify your team members and why they are the perfect team to bring this idea to life. Also look ahead and mention the people you still need to expand your company.

It’s not enough to just dump all this information into a single document and send it off. Venture capitalists read dozens of these documents a month, and have little patience for badly written or poorly created documents. You want your business plan to be as attractive and readable as possible.

Here are some tips to make your business plan more presentable:

• Don’t write a novel. Make your business plan as short as possible while still communicating all the essentials. The fewer pages you use, the better.
• Make it easy to read. Divide your document into distinct and logical sections, so that investors can quickly flip between key pieces of information.
• Proofread. Double and triple check the writing for typos and grammatical mistakes. Awkwardly written documents are hard to read through and easy to dismiss as amateur.
• Invest in design and printing. A proper layout and decent printing or bookbinding gives your business plan a professional feel.

Also remember that content is more important than design. Strategize and research your business plan thoroughly and know your numbers inside out—from costs to sales projections. Once you’re confident in your plan’s viability, then you can worry about formatting and layout. If you can show investors you can perform to a professional standard even during the pitch phase, they’ll be more willing to join you in building a thriving business!

Once your business is off the ground, you will need to start bookkeeping.  Please contact our firm to discuss the alternatives.