OTTAWA – Prime Minister Justin Trudeau announced on Monday, March 30 that the recently announced wage subsidy for businesses would be expanded to all Canadians that have seen at least a 30 percent drop in revenues.
Employees who qualify for the Canada Emergency Wage Subsidy will have 75 percent of their salary covered on the first $58,700 earned this year. That tallies up to $847 per week and the program will be backdated to March 15.
“The number of employees you have will not determine whether or not you get this support,” said the prime minister. “It will apply to non-profit organizations and charities, as well as companies both big and small.”
Urging companies that could do so to top up employee salaries with the additional 25 percent, Prime Minister Trudeau added “We are trusting you to do the right thing.”
The prime minister went on to caution that there would be serious consequences for any company that tries to game the system and that a verification system will be set up before the program is rolled out.
The wage subsidy had originally been set at 10 percent, an amount that business groups and the opposition had labelled as falling far below adequate.
The wage subsidy is just one of several programs that has been introduced by the federal government to tackle the economic hit presented by the COVID-19 pandemic. Prime Minister Trudeau has also promised a $2,000 direct payment to those workers who have been laid off or cannot work due to the pandemic. The application portal for that assistance is scheduled to be available by April 6.
More government measures to help business could be unveiled as things progress, but the prime minister did not commit to specific aid to help businesses pay rent on April 1.
At a press conference following the prime minister’s address, Deputy Prime Minister Chrystia Freeland assured the nation that Ottawa was working hard to eliminate any issues.
“I really apologize, sincerely, for some of the kinks in these systems,” Deputy Prime Minister Freeland said.
Other measures to help businesses facing financial hardship as a result of the COVID-19 pandemic were outlined on March 13, by Minister of Finance Bill Morneau, Governor of the Bank of Canada Stephen Poloz and Superintendent of Financial Institutions Jeremy Rudin, including measures to provide continued access to financing for Canadian businesses.
On March 18 the government and its partners announced further measures to support businesses.
The government is changing the Canada Account so that the minister of Finance would now be able to determine the limit of the Canada Account in order to deal with exceptional circumstances. The Canada Account is administered by Export Development Canada (EDC) and is used by the government to support exporters when deemed to be in the national interest. This will allow the government to provide additional support to Canadian companies through loans, guarantees or insurance policies during these challenging times.
As part of the aforementioned wage subsidy program, businesses will be able to immediately reduce remittances of income tax withheld on their employees’ paycheques.
The Canada Revenue Agency will now allow all businesses to defer the payment of any income tax amounts that become owing from now until before September until after August 31. 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 time.
The Canada Revenue Agency will not contact any small or medium businesses to initiate any post assessment GST/HST or income tax audits for the next four weeks. For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.
The liaison officer service offers help to owners of small businesses to understand their tax obligations and this service is now available over the phone and will be customizing information during the pandemic shutdowns by ensuring small businesses are aware of any changes such as filing and payment deadlines and proactive relief measures, etc.
The Business Credit Availability Program will allow the Business Development Bank of Canada (BDC) and EDC to provide more than $10 billion of extra support, largely targeted to small- and medium-sized businesses. This will be an effective tool to help viable Canadian businesses remain resilient during these very uncertain times. BDC and EDC are co-operating with private sector lenders to co-ordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation and tourism. The near term credit available to farmers and the agri-food sector will also be increased through Farm Credit Canada.
Other somewhat more esoteric measures can be found online at the Canada.ca COVID-19 info page.