Summary of Relief Packages for Businesses
Provincial Government Initiatives
On March 23rd, the British Columbia government announced a $5-billion economic relief plan to support families, businesses and economic recovery in response to COVID-19. A centrepiece of the plan is a $1,000 payment to workers who have been have been laid off, those who are sick or quarantined and those who have had to stay home to care for their children or sick family members as result of COVID-19. Individuals receiving employment insurance will be eligible to apply for this benefit.
As part of its economic relief plan, the province allocated $2.2 billion in relief to help businesses recover after the outbreak. Details of how the $2.2 billion will be dedicated have not been articulated as of this writing.
Additional aspects of the economic action plan impacting businesses include:
- Permitting businesses with a payroll over $500,000 to defer their employer health tax payments until Sept. 30, 2020. Businesses with a payroll under this threshold are already exempt from the tax;
- extending tax filing and payment deadlines for the provincial sales tax, municipal and regional district tax on short-term accommodation, tobacco tax, motor fuel tax and carbon tax until Sept. 30, 2020; and
- delaying the scheduled April 1 increase to the provincial carbon tax, as well as the new PST registration requirements on e-commerce and the implementation of PST on sweetened carbonated drinks until September 30, 2020.
Federal Government Initiatives
The Federal Government recently released its COVID-19 Economic Response Plan. A key feature of the plan is a 75% wage subsidy for societies and small and medium businesses. Last week, the Federal Government announced a 10% wage subsidy. This amount was criticized for being insufficient. In response, the federal government announced that it was increasing the amount of the wage subsidy to 75% to encourage employers to retain employees. Companies that experience a drop of at least 30% revenue may be eligible for the wage subsidy which will cover 75% of an individual’s salary up to $58,700 (i.e., up to $847 per week).The subsidy is slated to last for up to 3 months, retroactive to March 15, 2020. Additional details about the subsidy (including eligibility and the application process) are expected early this week. However, the government has stated that the number of persons employed will not determine eligibility.
Other features of the plan for businesses and employees are in the below table:
|Extending the Work-Sharing Program from 38 weeks to 76 weeks
|Work-Sharing is a program that helps employers and employees avoid layoffs when there is a temporary decrease in business activity beyond the control of the employer. The program provides employment insurance benefits to eligible employees who agree to reduce their normal working hours and share the available work while their employer recovers.
|Canada Emergency Response Benefit
|A taxable benefit of $2,000 a month for up to four months to eligible individuals who have lost income as a result of COVID-19.
|Business Tax Deferral
|Businesses may defer the payment of any income tax that becomes owing on or after March 18 and before September 2020 until after August 31, 2020.
|Business Credit Availability Program
|Export Development Canada and the Business Development Bank of Canada will provide more than $10 billion in direct lending and other types of financial support at market rates to eligible businesses. It will provide interest-free loans of up to $40,000 to small business and not-for profits to cover expenses during the pandemic.