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COVID-19: Government of Canada New Economic Relief Measures

Updated: Apr 21, 2020

On March 27, 2020, Prime Minister Justin Trudeau announced new economic relief measures that the Government of Canada is providing for small business in response to the Covid-19 pandemic.

  • Wage Subsidy

  • GST/HST and Customs Duties Payment Deferral

  • Canada Emergency Business Account

  • Small and Medium-sized Enterprise Loan and Guarantee program

Wage Subsidy

The Government of Canada announced a 75% salaries subsidy for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. This will help businesses to keep and return workers to the payroll. The subsidy is intended to support businesses that are facing revenue losses and to help prevent lay-offs.

GST/HST and Customs Duties Payment Deferral

The Government of Canada will allow businesses, including self-employed individuals, to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments until June, as well as customs duties owed for imports.

The deferral to June of GST/HST payments, as well as customs duties owing on imports, will generally apply to remittances that become due in March, April, and May.

Canada Emergency Business Account

Eligible small businesses and not-for-profits may be able to receive interest-free loans of up to $40,000 under the new Canada Emergency Business Account. This program is available to businesses with payrolls of less than $1 million. 25% of this loan up to $10,000 is eligible for complete forgiveness.

Small and Medium-sized Enterprise Loan and Guarantee program

The government also announced that it would offer financial support to small and medium-sized enterprises. Specifically, the government said the EDC will guarantee new operating credit and cash flow term loans that financial institutions extend to small and medium-sized enterprises up to $6.25 million. The government said that these loans will be 80% guaranteed by EDC, to be paid within one year. In addition, the government announced a new Co-Lending Program that brings the Business Development Bank of Canada together with financial institutions to co-lend term loans to an small and medium-sized enterprises of up to $6.25 million.

Please contact us about your circumstances and to understand the tax impact of owning these plans.

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