Canada Emergency Business Account Loan - A Refresher CEBA loan came into effect April 9th, 2020. This provided companies with a $40,000 loan at zero interest and zero repayments till December 31, 2022. If the company repays $30,000 of this loan by December 31, 2022, then the $10,000 balance is forgivable. If the company does not repay the $30,000 by December 31, 2022, then the remaining balance is converted into a 3 year term loan at a 5% interest, and there is no forgivable amount. Recently CRA has indicated that this loan will be increased to $60,000 ? more on this later.
The Canadian Chamber of Commerce will distribute 62 grants of $10,000 to small Canadian Businesses. The funds are being donated by Salesforce (NYSE:CRM). Application deadline is June 12th at 8 pm ET. Funds will be distributed shortly after successful applicants have been announced in late June.
Today, Prime Minister Justin Trudeau said the 75 per cent federal wage subsidy program is being expanded by three months, to the end of August to assist employers as they look to reopen their businesses. Companies that saw their revenues drop by 15 per cent in March or 30 per cent in April and May are eligible for the program ? but Trudeau hinted changes could be coming to that threshold. "As businesses start up again, this shouldn't become a barrier to growth." He said this aspect of the program will be one explored during talks with business and labour stakeholders in the weeks ahead.
Today, I was talking with one of our clients about whether they qualify for the 75% wage subsidy. Sadly, they have been closed since the beginning of the COVID crisis, but now with the governments willing to slowly start opening some businesses, they are looking to bring back their employees and slowly start working again. They did not think they qualified, as when they were closed they had no employees, and now that they are opening in May, they don't expect a full 30% drop in revenue year over year.
The Canadian Government reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. This program will lower rent by 75 per cent for small businesses that have been affected by COVID-19. The program will provide forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.
Ready, Set, Go! Today, April 27th, 2020, certain employers will be able to apply to receive the 75% Canada Emergency Wage Subsidy (CEWS). This temporary subsidy, which is available to qualifying employers who have lost revenue during the COVID-19 crisis, provides an amount to employers equal to 75% of employees' remuneration paid, up to a maximum of $847 per week per employee from March 15, 2020 to June 6, 2020. CRA notes that employees who have been laid off or furloughed, must be rehired and paid before they can be included in the subsidy calculation.
75% Wage Subsidy (CEWS) Updated April 19, 2020 The Canada Emergency Wage Subsidy (CEWS - the 75% Wage Subsidy) was passed into law on April 11, 2020. This law amends the Income Tax Act to introduce an emergency wage subsidy as part of the COVID-19 response, specifically it details the 75% wage subsidy and how it can help businesses during this unprecedented time. It is a complex law. Bill C-14 encompasses about 11 pages, and about 5 of them are definitions of terms that have not been used in the Income Tax Act before, or they are very specific to this provision. You should consult your tax professional if your situation is not straight forward. Previously, it was indicated that the government wanted to provide an enhanced Wage Subsidy (75%) to help employers keep workers on the payroll. Here are some of the details that were initially released with the recent changes.
Canada Emergency Business Account On April 16th, the Prime Minister, Justin Trudeau, announced an expansion to the Canada Emergency Bank Account (CEBA). Now businesses that had payroll in 2019, as evidenced by their T4 Summary remittance, of between $20,000 and $1,500,000, are eligible for the $40,000 loan program at 0% interest. This new range replaces the prior range of $50,000 to $1,000,000. Since the launch of CEBA, more than 195,000 loans have been approved by financial institutions, which represents approximately $7.5 billion in credit made available to small and medium sized businesses.
In this blog we wanted to talk about the latest changes in Canada's incentive programs. Over the past couple of days, there have been a number of announcements with clarifications or minor modifications made to some programs. CERB ($500/week) for Workers The CERB opened for applications on Monday April 6th, 2020. The application process turned out to be surprisingly efficient and easy. Applicants must attest but they've been out of work at least 14 straight days, and that their unemployment was caused COVID 19. Even applications done over the phone are quick and easy, and take about four minutes to complete.
Earlier today Finance Minister Bill Morneau announced further details about the 75% wage subsidy. The following is a summary of what was disclosed today and last week: The wage subsidy will reimburse employers 75% of an employee's salary, to a maximum of $847 per week, per employee,
75% Wage Subsidy Last Friday, the government announced the 75% wage subsidy. Today, details were announced that eligible businesses would have had to experience a 30% drop in revenue. The definition of drop in revenue has not yet been defined - is it Revenue to Budget? Revenue to Prior Year? Revenue to Prior Month? What about Revenue that has been booked but the customer can no longer pay? Still many questions to answer - hopefully the next couple of days will shed some light on these and other questions.
COVID-19 and Your Business Today we wanted to update you on the CRA deadlines, extensions and other important information that has been implemented during the Corona Virus outbreak. Today's compilation is in part from the CRA website and CPA Canada, our regulatory body. Filing Deadlines Personal tax returns originally due by April 30th have been extended to June 1st. Amounts originally due on April 30th, have also been been extended to September 1st. This means that you will not incur interest or penalties if you pay the amount on your personal taxes owing by September 1st.
COVID-19 and Your Business Today we wanted to take a moment to talk about the 10% wage subsidy that the federal government has implemented. We have been receiving many calls from our customers looking for some direction of how to take advantage of this subsidy. Who is Eligible You are an eligible employer if you: are a non-profit organization, registered charity, or a Canadian-controlled private corporation (CCPC); have an existing business number and payroll program account with the CRA on March 18, 2020; and pay salary, wages, bonuses, or other remuneration to an employee. Note, CCPCs are only eligible if their taxable capital for all associated companies is less than $15 million.
COVID-19 and Your Business We have been receiving many calls from our business customers and what they should do with respect to COVID-19 or Corona Virus. We wanted to take this time to give you some brief information about Employment Insurance. The Federal Government has waived the one week waiting period for EI due to sickness benefits. Meaning that the employee will receive payment as soon as they apply for EI. Payments are made bi-weekly, and their first payment is likely to be 3 weeks out. For Your Business From an employers' perspective, you have 5 days to issue the Record of Employment (ROE). The ROE is generally filed on line and the employee will receive a copy on-line as well. This link will take you to the Service Canada page for filing the ROE. The following codes should be used when completing the ROE for your employee:
CRA Audits Increasing Every Year Do a Google search on CRA (Canada Revenue Agency) Audits and you will find hundreds of articles about how CRA is spending more money to hire more auditors and improve statistical analysis to improve targeted audits. A few years ago, CRA reported to Parliament that random audits detected significant non-compliance in 12.2% of cases. However, targeted audits based upon certain risk assessments detected a whopping 46.7% of non-compliance. To this end, CRA has proposed to increase spending by $1.2 billion by 2024-25 to hire new auditors to improve tax compliance -- and they expect to recover and collect $5.8 billion more in taxes as a result. We should first understand why taxpayers get audited, then we can talk about things you can do to alleviate the anxiety. So what activities or characteristics will increase your risk of getting audited?
CRA Audit Project - Reviewing Your Vehicle Expenses The team at GBA have observed an increased number of CRA reviews and audits surrounding vehicle expenses. We normally see a number of these each year, but this year, we feel like it has become a project for CRA to target these expenses, and we feel that it is important enough to not only tell our clients how they can ensure that they are protected, but to tell the general public as well by way of this blog. These expenses can be found in several scenarios with individual and/or corporate taxpayers. With individual taxpayers, if you are using your vehicle as part of your business as a sole proprietor, or as part of employment expenses, your risk of being audited has increased over the past year. So, if one of the above situations applies to you, please continue to read the following as we explain how to audit proof your taxes.
In this blog, we will be looking at the 6 critical reports that you need to look at to ensure you success with your small business.
Choosing an accountant for your business is one of the most important decisions for you and your business. The right accountant can help you do more than just file your taxes, they can help you grow your business, keep you from increasing your risk of being audited and save you time and money in the end. With that in mind, we created a list of the most important questions you should ask your prospective accountant when the time comes to hire one or change. Do They Have a Designation? In Canada, there use to be 3 different designations that have all amalgamated under the Chartered Professional Accountant (CPA) designation. With this designation, you can feel assured that the individual or firm has had to undergo a certain amount of training and education and are regulated by CPA Canada and one of the Provincial organizations as well, such as CPA Ontario. These regulatory bodies give the public some peace of mind as the individual accountant or firm is monitored on a regular basis to uphold the standards in place.
FATAL MISTAKES? You Must Absolutely, Positively Eliminate From Your Business Right NOW! Here is part 4 of our 5 part series. If you have not read parts 1 - 4, please read those blogs first.
FATAL MISTAKES? You Must Absolutely, Positively Eliminate From Your Business Right NOW! Here is part 4 of our 5 part series. If you have not read parts 1 - 3, please read those blogs first. Marketing Mistake #6 Failing To Use Testimonials Let?s be honest - selling isn?t easy. Unless a prospect is convinced, the product or service will give them the result they?re seeking, the sale won?t be made. And what people say themselves about their business and their products or services is often taken with a ?pinch of salt?. After all, we are all skeptics these days. So how can you almost instantly prove to the prospect you can deliver on your promises? It?s actually much easier than you may think. All you need to do is use ?customer testimonials?. Again we can?t tell you how often we see businesses trying to sell and market their products or services without the use of testimonials. They make life very, very difficult if they don?t use testimonials. Testimonials have the power to get customers by the bucketful (we also call this ?Social Proof?).