The Top Line
The global public health reaction to COVID-19 is increasingly accompanied by monetary and fiscal policy responses that are in all respects unprecedented in scale – including in Canada. In this latest TSA COVID-19 Update, we are providing a comprehensive overview of the business support and economic stimulus measures, as well as the opportunities for public-private collaboration, announced to date by the Federal Government as well as the four largest Provincial Governments and the City of Toronto.
We hope that this note serves as a useful resource for determining how your business, association, charity, or non-profit organization can access any needed government support for your operations and employees during the pandemic, and, if feasible, contribute to the cross-governmental effort to combat the virus. Where possible, links to program criteria and application resources have been provided, and TSA Consultants are available at any time to provide further counsel on successfully accessing the programs.
On March 25, a special sitting of Parliament passed Bill C-13, An Act respecting certain measures in response to COVID-19, which enacted the entire $82 billion Federal COVID-19 fiscal stimulus package. The Bill also gave the Government the power to borrow and spend money without Parliamentary approval for 6 months in the areas of income supports, purchasing medical supplies, public health-related programs, and Provincial assistance. For business stakeholders, the most impactful stimulus measures are detailed below and finer details on the administration of the policies can be found here.
The Canadian Emergency Wage Subsidy
All businesses, non-profit organizations, and charities are eligible for a taxable wage subsidy of 75% to help cover payroll during the COVID-19 outbreak, subject to the following criteria:
- Applicants must prove that their revenues have decreased by at least 30% due to COVID-19.
- The Government will pay 75% of the first $58,700 that an employee earns, which equates to a subsidy of $847 per week.
- The subsidy is retroactive to March 15, so that businesses can back-fill the subsidy and/or use it to re-hire employees that were laid off due to COVID-19.
- Applicants are strongly requested to cover the remaining 25% of their employees’ wages (i.e. not reduce wages) and their will be strong penalties for abusing the subsidy.
A full backgrounder on the subsidy will be published the morning of March 31, at which time the Ministers of Finance and of Small Business, Export Promotion and International Trade will hold a press conference to answer questions about the implementation of the subsidy. The Government has indicated that the subsidy will flow to businesses within a few weeks.
Loans and Tax Deferrals for Businesses
Businesses, non-profit organizations, and charities may defer GST/HST payments and import duties until June 30, and can access the following loans to fund operational expenses:
- A Canada Emergency Business Account will provide loans of up to $40,000 to organizations that had a payroll of between $50,000 and $1 million in 2019. The loans are interest-free for one year and up to $10,000 of a loan will be forgiven if it is repaid by December 31, 2022.
- Export Development Canada and the Business Development Bank of Canada will increase their co-lending programs for small and medium-sized businesses.
In each case, customer interface and loan approval will be provided by financial institutions.
Canada Emergency Response Benefit
Self-employed business owners, freelance workers, and the general working population are eligible for a $2,000 per month benefit, payable every four weeks from March 15 to October 3. The benefit can be claimed by anyone who lost their job or income or is unable to work (e.g. caring for a sick relative or a child) due to COVID-19 – except for anyone currently collecting EI. An online portal and an automated telephone line for applications for the benefit will go live in early April, and funds will begin flowing shortly thereafter.
The Government has signaled its intention to provide sector-specific aid to key industries – such as airlines, charities, and resource extraction – in the coming days and weeks. A special aid package for the oil and gas sector is expected to be announced imminently. For the longer term, Federal Economic Development Minister Mélanie Joly and the Provincial Tourism Ministers have discussed an aid package for the domestic travel and tourism industry as a cornerstone of the post-pandemic economic recovery. Stakeholders that are interested in ensuring that they benefit from sector-specific aid packages for large industries should contact the offices of the Ministers of Finance and of Innovation, Science and Industry without delay.
Federal Government – Private Sector Collaboration
The Government continues to view mobilization of the private sector as a key element of both treating the COVID-19 pandemic and of mitigating its economic impact. All organizations should consider if there are any ways that they could contribute to those efforts.
A call to action for manufacturers and a call to all suppliers to support the Government’s response to COVID-19 have been issued. Additionally, Federal industry-facing programs have been re-focussed to prioritize ongoing projects that can help combat COVID-19 or to support the re-tooling of industrial operations towards new product lines for combating the virus:
- The Strategic Innovation Fund will fast-track funding approval for Canadian companies that are working on large-scale and late-stage R&D projects aimed at treating or curing COVID-19, including vaccines and critical medical supplies.
- The Innovative Solutions Canada program will launch a competition specifically for innovations by Canadian entrepreneurs to meet the immediate needs of the healthcare system.
- The Regional Development Agencies will work with small and medium-sized businesses in urgent need of assistance to access Federal support.
In that context, funding programs that normally take a year or more to assess applications will disburse funds in a matter of weeks or months. The Government is proactively looking to fund creative solutions and innovations from the manufacturing, IT, financial, and other sectors that can address COVID-19 or its impacts. Please contact TSA if you would like counsel on crafting a complete and successful application to those programs.
Social Distancing and Travel Restrictions
The increasingly-stringent public health measures to combat COVID-19 have growing operational implications for businesses. Most pertinently, the Government is now actively discouraging travel of any kind into and within Canada.
As of midnight, on March 25, an Emergency Order under the Quarantine Act requires any person entering Canada by air, sea, or land to self-isolate for 14 days, whether or not they have symptoms of COVID-19. All individuals permitted to enter Canada are subject to the Order, except for persons who cross the border regularly for essential commercial operations (e.g. truckers) and persons who provide essential services (e.g. healthcare). Canada Border Services Agency staff are enforcing the Order, and the maximum penalty for violating it is a fine of up to $1,000,000 and/or imprisonment of up to three years.
As of Noon, on March 30, individuals that present COVID-19 symptoms are barred from domestic flights or inter-city trains (excluding commuter trains) for 14 days or until they present a medical certificate stating that they do not have COVID-19. Air and rail operators will conduct health screening of all passengers to enforce this Transport Canada measure.
Economic Update 2020 and Fiscal Stimulus
On March 25, the Government issued an Economic and Fiscal Update that was essentially a fiscal stimulus package in response to COVID-19. The most impactful measures for businesses in the Update were:
- The Employer Health Tax exemption is increased from $490,000 to $1 million for 2020.
- A Regional Opportunities Investment Tax Credit will be given to Canadian-controlled private corporations that construct, renovate, or acquire eligible commercial and industrial buildings and other assets in specified regions of Ontario after March 25, 2020. The tax credit will apply to expenditures of between $50,000 and $500,000, at a rate of 10% of eligible expenses. A list of the specified regions and specifics on eligibility can be found here.
- Tax filing deadlines for select Provincial taxes, including the Employer Health Tax, Tobacco Tax, Fuel Tax, Gas Tax, Wine and Spirits Taxes, Mining Tax, Insurance Premium Tax, International Fuel Tax Agreement, and Retail Sales Tax on Insurance Contracts and Benefit Plans, are extended until August 31. The government is also postponing the planned property tax reassessment for 2021.
- Workplace Safety and Insurance Board payments can be deferred for up to six months.
- Electricity prices for time-of-use customers (including small businesses) will be set at the lowest rate, known as the off-peak price, for 24 hours a day for 45 days.
Ontario Government – Private Sector Collaboration
The Government created an ‘Ontario Together’ program to foster government – private sector collaboration on responding to COVID-19. Businesses of all types – but particularly the IT, financial, and manufacturing sectors – are asked to consider how they can help combat COVID-19 or help society operate during social distancing, and to submit any proposals to the Government through the portal.
Social Distancing in the Private Sector
As of March 24, non-essential workplaces are prohibited from operating, except by telework and e-commerce, until at least April 7 at 11:59 PM. The list of essential services that can remain open is subject to continuous updates, so businesses that are not on the list but believe that they should be should contact the offices of the Premier or of the Minister of Labour. Businesses that have questions about the operational impacts of the policy can call the Stop the Spread Business Information Line at 1-888-444-3659, from 8:30 AM to 5:00 PM on any day of the week.
On March 28, the Government banned public gatherings of five or more people and, on March 31, the Province-wide state of emergency will be extended for two weeks, after which it will be re-considered on a rolling two-week basis.
On March 23, the Provincial government allocated $5 billion to a COVID-19 Action Plan that provides income supports, tax relief, and direct funding to people, businesses, and services impacted by the virus. For businesses, non-profit organizations, and charities, the most impactful measures are:
- Organizations with a payroll over $500,000 per year can defer employer health tax payments until September 30, 2020.
- Tax filing and payment deadlines for the PST, municipal and regional district tax on short-term accommodation, tobacco tax, motor fuel tax, and carbon tax are extended until September 30, 2020.
- The scheduled April 1 increase to the provincial carbon tax and the new PST registration requirements on e-commerce are delayed, and their timing will be reviewed by September 30, 2020.
- Non-profit organizations and charities will continue to receive Provincial funding, even if they are closed or their regular operations have been disrupted.
The Action Plan also allocates $1.5 billion for longer-term economic recovery. That funding will be disbursed to particularly hard-hit parts of the economy, such as the tourism, hospitality, and cultural sectors. The Government is partnering with businesses and labour leaders to develop that stimulus plan, so interested stakeholders should contact the office of Finance Minister Carole James.
Employment, Business and Economic Development BC has created and will regularly update a webpage compiling all of the Federal, Provincial, Municipal, and financial sector supports that are available to small businesses in the province during the COVID-19 outbreak.
Social Distancing in the Private Sector
The Government created a list of essential services that are encouraged to stay open during the pandemic. However, unlike in several other provinces, non-essential workplaces may remain open, as long as they obey all orders and notices issued by the Office of the Provincial Health Officer that are relevant to their sector.
On March 19, the Government of Quebec announced the Programme d’action concertée temporaire pour les entreprises (PACTE), which allocates $2.5 billion to help companies maintain operations during the pandemic. All businesses are eligible for the program, if they can demonstrate that they are likely to be profitable after the pandemic. PACTE will provide loans or loan guarantees of $50,000 or more to eligible businesses. Finer details and the application portal for PACTE can be found here, though the page is currently published only in French.
Social Distancing in the Private Sector
As of March 25, non-essential workplaces are prohibited from operating, except by telework and e-commerce, until at least April 13 at 12:01 AM. There is a list of essential services that can remain open and workplaces that are unsure if they qualify should complete this form, after which the Government will contact you with a ruling.
As of March 30, all Quebec businesses (except for convenience stores, gas stations, pharmacies, and takeout food vendors) must be closed on Sundays.
On March 31, the Legislative Assembly will convene to consider legislation pertaining to the Government’s fiscal response to COVID-19. In the meantime, the Government has already announced the following tax deferrals and direct support measures for businesses:
- The collection of corporate income tax is deferred until August 31.
- Workers’ Compensation Board (WCB) premiums may be deferred until 2021, and a rebate can be claimed by businesses that have already paid for 2020. The Government will pay 50% of 2020 WCB premiums for small and medium-sized businesses.
- Utility payments for residential, farm, and small commercial customers may be deferred for the next 90 days.
- The tourism levy may be deferred until August 31.
Social Distancing in the Private Sector
As of March 27, non-essential workplaces are prohibited from operating, except by telework and e-commerce, and public gatherings of 15 people or more are banned. There is a list of essential services that can remain open and workplaces that are unsure if they qualify should contact BizConnect@gov.ab.ca.
City of Toronto
The Mayor’s Economic Support and Recovery Task Force has published a survey to collect information about how COVID-19 is impacting Toronto’s businesses and what supports they would find most useful. The feedback will be used to shape short-term and long-term policies to address the economic fallout of COVID-19. As of now, the City has suspended all municipal tax and utility payments for 60 days.
As the public health response to COVID-19 plays out, Canada’s governments are very aware that the economic fallout of the pandemic may yet worsen. As such, all governments have indicated that their initial fiscal stimulus packages are likely to be expanded upon in the coming weeks and months. The Federal Government is also working proactively with the G7, the G20, and other international partners to secure supply chains for the duration of the crisis.
If you would like assistance in engaging governments about COVID-19, please contact your TSA consultant or Don Moors at email@example.com.
And, as always, TSA recommends that stakeholders monitor www.canada.ca/coronavirus for the most up-to-date public health information about COVID-19.