Upcoming deadlines, Canada and Ontario’s COVID-19 financial relief measures and tax changes
The deadline to apply for the Canada Emergency Wage Subsidy for the March 15 – April 11, 2020; April 12 – May 9, 2020; May 10 – June 6, 2020; June 7 – July 4, 2020; and July 5 – August 1, 2020 reporting periods is January 31, 2021. See below for other upcoming deadlines, reminders, tax changes and government announcements relating to COVID-19 financial relief measures.
Canada Emergency Wage Subsidy (CEWS) Increase:
- The deadlines to submit the wage subsidy applications for the remaining periods are as follows:
- February 25, 2021 for August 2 – August 29, 2020;
- March 25, 2021 for August 30 – September 26, 2020;
- April 22, 2021 for September 27 – October 24, 2020;
- May 20, 2021 for October 25 – November 21, 2020; and,
- June 17, 2021 for November 22 – December 19, 2020
- If you require assistance completing the CEWS applications, SRC LLP has a team designated to help you. Please feel free to contact us for next steps.
Ontario Small Business Support Grant:
- Applications are open for the Ontario Small Business Support Grant. This grant helps small businesses with fewer than 100 employees required to close or significantly restrict services under the Provincewide shutdown effective December 26, 2020.
- This grant provides businesses with funding between $10,000 and $20,000 to cover any business expenses due to revenue decline from Provincewide shutdowns. Revenue decline must be at least 20% when comparing monthly revenue of April 2019 to April 2020.
- New businesses established since April 2019 are eligible if they meet other eligibility criteria. They will be able to select alternative months for comparing revenue decline in the application portal.
- Businesses must have a business number to be eligible. If a business does not have a business number, they must apply for one before completing the application.
- Businesses that are not eligible include those already required to close prior to the introduction of modified Stage 2 measures on October 10, 2020, and essential businesses permitted to operate with capacity restrictions.
- Businesses can expect funds within 10 days of submitting a successful application.
Highly Affected Sectors Credit Availability Program (HASCAP):
- On January 26, 2021 the Federal government announced the launch of the HASCAP to provide financial support to businesses hit the hardest by the pandemic.
- Through HASCAP, the Business Development Bank of Canada (BDC) will work with participating Canadian financial institutions to offer government-guaranteed, low-interest loans from $25,000 to $1 million. Repayment terms would be up to 10 years.
- To be eligible for HASCAP, the business must be Canadian based, must have been financially stable and viable prior to the COVID-19 pandemic, and needs to show a year-over-year revenue decline of at least 50% in three months, within the eight months prior to their application. Businesses must also show their financial institution that they previously applied for and received either CEWS or CERS. The loan must be used to continue or resume operations. It cannot be used to repay existing financing.
- Eligible businesses can start applying for HASCAP as early as February 1, 2021 at their financial institutions and more widely February 15, 2021. Interested businesses should contact their financial institutions to obtain more information and apply. The HASCAP guarantee is available until June 30, 2021.
Form PD27 – Temporary Wage Subsidy (TWS) Self-Identification Form for Employers:
- All employers who claimed the TWS must file form PD27 - Temporary Wage Subsidy Self-identification Form for Employers. CRA will use this form to reconcile the TWS to the employer’s payroll account. It is strongly encouraged that this form be submitted prior to the March 1, 2021 filing deadline for T4 reporting to avoid receiving a discrepancy notice.
Canada Emergency Business Account (CEBA):
- Reminder that business owners can apply for support under the CEBA program until March 31, 2021.
Employees Claiming Office in Home Expenses:
- To be eligible to claim home office expenses, employees must have worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020 due to the COVID-19 pandemic.
- CRA has created a new simplified Form T2200S Declaration of Conditions of Employment for Working at Home Due to COVID-19. Employees who are claiming other employment expenses should continue to use Form T2200. There will be two methods to calculate home office expenses as an employee for 2020: the New Temporary Flat Rate Method and the Detailed Method.
- To learn more, please refer to the following link: http://www.srcllp.com/homeofficeexpenses_2020.html
Prescribed Interest Rate for Q1 2021:
- The prescribed rate for Q1 2021 remained consistent at 1%. Funds loaned on or after July 1, 2020 will be eligible for this rate. The rate will be locked in for the duration of the loan.
- Prescribed rate loans can be an effective financial and tax planning tool. We would be happy to advise you on this matter.
- Tax-exempt automobile allowances can be paid by employers to employees who use their personal vehicle for business purposes. The tax-exempt limits are unchanged from 2020 to 2021: $0.59 per km for the first 5,000 km driven, and $0.53 per km thereafter.
- The limit on deductible leasing costs will remain at $800 per month plus applicable taxes for new leases entered.
Do not hesitate to contact us if you have any questions regarding how any of the above impacts you, your family, or your Company.
NOTE: Due to the rapidly evolving changes with respect to the Government’s Economic Response Plan to Covid-19, please understand that any posts written in the past may not be reflective of the current applicable obligations, rights and benefits of individuals and businesses.