The coronavirus pandemic has cast a ghastly shadow over the entire world as the number of positive cases has reached 2.71 million. Canada also has confirmed community transmission and has over 42,000 confirmed cases in the country. With the highest number of cases in Ontario and Quebec and confirmed cases in all the provinces, the government has imposed restrictions to curb the spread of the lethal disease.
Non-essential businesses have been asked to close down, and bars, restaurants, and cinemas are shut to reduce the congregation of people and maintain social distancing. However, takeout and food delivery have been permitted to operate under safety guidelines. Most small businesses have been impacted by the crisis and are struggling to survive in the current situation.
Amidst all the chaos, the economic response plan adopted by Canada has come as a ray of hope. If you have purchased a small business for sale in Canada in the recent past and are feeling apprehensive about the current economic conditions, then you can take advantage of the relief programs initiated by the government to stay afloat. Here are the programs that can by utilised be businesses.
1. Make Use of The Credits Being Offered
The government is making sure that businesses are getting access to credit through a variety of sources. The Business Credit Availability Program has been initiated to allow private-sector lenders to collaborate with Business Development Bank of Canada (BDC) and Export Development Canada (EDC) for providing credit to businesses operating in sectors like tourism, exports, oil and gas and air transport.
There is also the Canada Emergency Business Account (CEBA) that is offering interest-free loans to small businesses and not-for-profits for up to $40,000. It will help these organisations to bear the cost of operations while the profits have declined. All the entities which paid between $20,000 and $1.5 million in payroll last year are eligible for CEBA.
Another relief effort being offered is the Canada Emergency Commercial Rent Assistance (CECRA) program under which owners of commercial real estate will be provided loans so that they do not charge rent from small businesses from April to June 2020. Moreover, Futurpreneur Canada will be given $20.1 million to offer relief to young entrepreneurs. Other credit assistance includes assisting innovative and early-stage businesses and other ventures which are unable to access support measures.
2. Deferred Tax Payments
All businesses have been permitted to postpone their income tax payment until August 31, 2020, for due payments during the period of March 18 to September 2020. The postponement is applicable to tax balance dues and instalments that fall under the Income Tax Act, and there will be no penalties for this period.
Businesses have also been allowed to push back the GST/HST payments and customs duty on imports until June 30, 2020. The GST/HST payments due from March 27 to May 30 will be postponed to the end of June.
3. Assistance For Self-Employed Individuals
The government is offering a taxable benefit of $2000 every month for up to four months to eligible individuals whose income has stopped during the COVID-19 crisis. After a few changes announced on April 15, the new guidelines suggest that eligible people can earn up to $1000 every month under the Canada Emergency Response Benefit program and it will be applicable to seasonal workers who have already utilised the EI benefits and are not getting new work offers because of the pandemic.
Self-employed individuals have also been allowed deferral of sales tax remittance and customs duty payments until the end of June 2020. The same income tax deferral support, which has been provided to businesses is applicable to self-employed people as well.
4. Wage Subsidies For Employee Retention
Businesses which have had to bear a decline of 15% in gross revenue in March and may suffer up to 30% reduction in profits in April and May will be given wage subsidies. The Canada Emergency Wage Subsidy (CEWS) covers 75% of an employee’s wages which tantamount to $847 per week and is applicable to all the entities irrespective of their size and domain.
It will begin from March 15 and last until June 6, 2020. The eligible business owners can also claim a 100% refund for their contributions to Employment Insurance, the Quebec Pension Plan, the Canada Pension Plan, etc. Building strong teams is a piece of important advice offered by successful small business owners, and thus you must retain your talented staff in the current conditions using these programs.
Besides CEWS, there is a Temporary 10% Wage Subsidy for three months which benefits the employers by decreasing the amount of payroll deduction that is to be submitted to the Canada Revenue Agency (CRA). Another measure for avoiding layoffs involves the extension of the Work-Sharing Program from 38 weeks to 76 weeks. Under the program, employees who have agreed to reduce their working hours due to COVID-19 challenges will be eligible for income support.
5. Enhancing Economic Stability
The government has offered relief for business owners who are pension plan sponsors. It will allow them to continue trading in the current situation and sustain the offering of pension plans and retirement security to their current workers and those who have retired from service.
The government has also come up with the Insured Mortgage Purchase Program wherein they will be offering funding to banks and mortgage lenders so that these can lend money to businesses. The Bank of Canada has also reduced the interest rates and is extending support to financial institutions and markets.
6. Generating More Employment Opportunities for Youngsters
The Youth Employment and Skills Strategy program has been put in place wherein the government will provide a package of $153.7 million for the skill development of youngsters so that they can become a part of the labour market. The funding will aid in generating more than 6,000 jobs.
A Student Work Placement Program has been created that will offer support to 20,000 post-secondary students to take advantage of paid work experience in their subject. The government has further invested $40 million to support Mitacs for the creation of jobs.
7. Support For Indigenous Businesses
The government has announced a funding of $306.8 million for the support of small and medium-sized indigenous businesses and Aboriginal Financial Institutions. It will aid in offering short-term and interest-free loans to 6000 indigenous businesses through the Aboriginal Financial Institutions.
Although the pandemic has brought forth several economic challenges, it is time to maintain a positive approach and work towards a better tomorrow. If you have purchased a business for sale in Canada recently, then utilise the relief programs being offered by the government to avoid economic damage and continue to work progressively.