Both the Federal and Provincial levels of government have announced sweeping financial measures to mitigate the economic impact of COVID-19. We have summarized and listed the measures implemented or proposed that may be of assistance to businesses in British Columbia. We will be updating this list as further guidance and information is made available.

Federal

1. Wage Subsidies. The Federal Government has established the Canada Emergency Wage Subsidy (CEWS), which would cover 75% of an employee’s remuneration for the first $58,700 of employee earnings, for eligible businesses who retain employees on payroll. Businesses, both large and small, will be able to access this subsidy if they are able to demonstrate a decrease in gross revenue of at least 15% in March and 30% in April and May. The subsidy will be in effect for three months from March 15 to June 6.

   Click here for further details.

   The previously announced Temporary 10% Wage Subsidy is still in effect and would operate as a separate program. The subsidy equates to 10% of employee remuneration, up to a maximum of $1,375 per employee and $25,000 per employer. This measure, which is available to non-profits, charities, and corporations eligible for the small business deduction, allows businesses to reduce remittances of income tax withheld on employee remuneration by the amount of the subsidy. Any benefit received from this subsidy will reduce the benefit obtained from CEWS.

   Click here for further details.

2. Canada Emergency Commercial Rent Assistance. The Federal government has reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance Program (CECRA) to assist commercial landlords and small business tenants experiencing financial hardship. The program will provide forgivable loans to eligible commercial landlords equal to 50% of three month’s rent payable by eligible small business tenants who are experiencing financial hardship through April, May, and June. Small business tenants are deemed to be experiencing financial hardship if they pay less than $50,000 per month in rent and have experienced a 70% drop in pre-COVID-19 revenues or have temporarily ceased operations.

   The intent is for the loan to be forgiven if the commercial landlord enters into a rent forgiveness agreement for the months of April, May, and June, the terms of which are expected to include: (i) a reduction of rent by 75% for the small business tenant; and (ii) a moratorium against evictions for the duration of the agreement.

   It is expected that CECRA will be available by mid-May. Further details of the terms and conditions of this program are expected to be released.

   Click here for further details.

3. Income Tax Deferral. Businesses are permitted, until after August 31, 2020, to defer the payment of income taxes owing on or after March 18, 2020 and before September 2020. No interest or penalties will accrue during this period.

   Click here for further details.

4. GST and Customs Duty Deferrals. Businesses are permitted to defer payments of GST and customs duties until June 30, 2020. The deferral applies to specific reporting periods of the filer and, accordingly, a business intending on utilizing this deferral will need to confirm which reporting periods are captured by the deferral.

   Click here for further details.

5. Business Credit Availability Program. The Business Credit Availability Program has been established with the support of the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide solutions to creditworthy businesses experiencing financial hardship. This program includes:
   1. the new Canada Emergency Business Account, which will provide interest-free loans of up to $40,000 to businesses with $20,000 to $1.5 million in total payroll in 2019. Twenty-five percent of the loan will be forgiven if the loan is repaid by December 31, 2020. If the loan is not repaid by December 31, 2020, the remaining balance will be converted to a three-year term loan at 5% interest;
   2. the EDC Loan Guarantee Program, which allows financial institutions to issue loans of up to $6.25 million with 80% guaranteed by EDC;
   3. co-lending term loans with BDC for small and medium sized businesses, which provides for loans up to $6.25 million depending on the size of the business. These loans provide for up to a 10-year repayment period with the possibility of interest-only payments for the first year; and
   4. BDC’s Mid-Market Financing Program, which will provide commercial loans ranging from $12.5 million to $60 million to medium-sized business with annual revenues in excess of approximately $100 million. Further details of this program are expected to be released; and
   5. EDC’s Mid-Market Guarantee and Financing Program, which seeks to bring liquidity to mid-sized companies with revenue between $50 million and $300 million. Loans from financial institutions under this program are expected to range from $16.75 million to $80 million, with guarantees provided by EDC in support. Further details of this program are expected to be released.

   Businesses seeking such support should reach out to their financial institution for an assessment of their situation. Referrals may then be made to BDC or EDC if the needs of the business cannot be provided through the private sector.

   Click here for further details.

6. Large Employer Emergency Financing Facility. The Federal Government has announced the Large Employer Emergency Financing Facility (LEEFF) to provide bridge financing to large for-profit businesses with annual revenues in the order of $300 million or higher. Qualifying businesses are those that are seeking financing in the amount of $60 million or more, have significant operations or workforce in Canada, and not be involved in active insolvency proceedings. The intent of the program is to provide large employers with financing not obtainable through conventional means to keep operations active.

   Further details are expected to be released in the coming days and weeks.

   Click here for further details.

7. Support from Financial Institutions. Canada’s largest banks have confirmed their support by offering flexible solutions for individuals and businesses impacted by COVID-19. This may include mortgage payment deferrals and relief on other credit products. Please contact your financial institution for further details.
8. Work-Sharing Program. The Federal work sharing program seeks to minimize layoffs during times when there is a reduction in business activity due to reasons beyond the control of the employer. Through a work share agreement amongst eligible employees, the employer, and Services Canada, eligible employees receive Employment Insurance benefits while working a reduced workweek and sharing what available work remains. In response to COVID-19, the Federal government has implemented temporary measures to increase the flexibility of this program:
   1. extending the maximum duration of a Work-Share Agreement from 38 weeks to 76 weeks;
   2. removing the mandatory waiting period between workshare applications;
   3. reducing the requirement for a recovery plan to a single line of text;
   4. reducing the eligibility criteria to allow business who have been in business for one year, rather than two, to apply; and
   5. eliminating the requirement of having to provide sales/production figures at the time of application.

   Click here for further details.

9. Income Support for Workers. The Federal Government has announced a number of supportive measures to assist workers, including: (i) waiving the one-week waiting period for individuals in quarantine that claim EI sickness benefits; (ii) waiving the requirement to provide a medical certificate to access EI sickness benefits; (iii) introducing the Canada Emergency Response Benefit. Employers should inform employees on leave to seek and apply for all available support.

   Click here for further details.

Provincial

1. Tax Deferrals. Businesses with a payroll over $500,000 can defer the payment of employer health tax payments until September 30, 2020. Further, the tax filing and payment deadlines for for PST, municipal and regional district tax on short-term accommodation, tobacco tax, motor fuel tax and carbon tax, have been extended to September 30, 2020.

   Click here for further details.

2. BC Emergency Benefit for Workers. The Provincial Government has announced a one-time payment of $1,000 for B.C. residents whose ability to work has been affected by the pandemic. Employers should inform employees on leave to seek and, if permitted, apply for this benefit.

   Click here for further details.