What You Need to Know in Regards to Your Business
The Corner Office is here to help.
UPDATED AS OF APRIL 5, 2020, 7:30pm
We are facing unprecedented times in the wake of the Covid-19 pandemic, and we are acutely aware of the financial impact you are all feeling. Many, many of you have been reaching out for advice and information on how to protect your businesses and organizations, and we are doing our best to get back to each of you. Our professionals all continue to be available through email, calls and video or conference call. In an effort to ensure you have the information that we have, here are some COVID-19 (coronavirus) Resources for you as business owners.
Ottawa has released the below information as an economic response plan.
The Premier of Saskatchewan has also released a financial support plan for employees and employers.
Federal Employment Insurance
Employment Insurance wait periods will only be waived if your employees become sick with Covid-19. All other employment insurance claims will be subject to a one week waiting period from the last day worked.
If your employees have not been able to work due to COVID-19, you must issue an ROE. We have had many questions on the ‘reason for separation’ code. Service Canada advice is stated below:
When an employee is sick or quarantined, use code D (illness or Injury)
When an employee is no longer working due to shortage of work due to closed or decreased operations due to COVID-19, use code A (shortage of work)
If the employee refuses work, but is not sick or quarantined, use code E (Quit) or code N (Leave of absence).
It is very important to NOT add comments as it will slow down the process of the claim.
Changes to the Saskatchewan Employment Act
The new legislation will ensure that during a public emergency, businesses will not have to provide notice or pay in lieu of notice when they lay-off staff if it is for a period of 12 weeks or less in a 16-week period.
And if an employer lays off employees periodically for a total of more than 12 weeks in a 16-week period, the employees are considered to be terminated and are entitled to pay instead of notice as outlined in the Act. This will be calculated from the date on which the employee was laid off.
It will be important for businesses to manage this 12 week window to avoid terminations and severance payouts per normal Saskatchewan employment standards.
Provincial Self-Isolation Support Program
This program was announced on March 20th. It will be administered by the Ministry of Finance, the Self-Isolation Support Program will provide $450 per week, for a maximum of two weeks or $900. The Self-Isolation Support Program is targeted at Saskatchewan residents forced to self-isolate that are not covered by recent federally announced employment insurance programs and other supports. The program is designed to ensure that all Saskatchewan residents are covered by either a federal or provincial program to ensure no one is faced with choosing to work instead of protecting their family and community from COVID-19 by self-isolating.
The program will mostly benefit self-employed residents of Saskatchewan that meet the following eligibility criteria:
• They have contracted COVID-19 or are showing symptoms;
• They have been in contact with an individual infected with COVID-19;
• They have recently returned from international travel and have been required to self-isolate;
• If they are not eligible for compensation including sick leave, vacation leave from their employer
• If they do not have private insurance covering such disruptions
• If they are not covered by other programs such as federal employment insurance that has been updated.
Applications are open and can be accessed through the following link:
CANADA EMERGENCY RESPONSE BENEFIT (UPDATED APRIL 5, 2020)
The application process for the Canada Emergency Response Benefit opens on April 6, 2020. The Canada Emergency Response Benefit (CERB) will provide up to $2,000 a month for the next four months if you don’t qualify for Employment Insurance.
The CERB would cover Canadians:
who have lost their job, are sick, quarantined,
who are taking care of someone who is sick with COVID-19,
working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures but were not laid off and are not ineligible for EI,
the CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI),
all Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not, would be able to receive the CERB to ensure they have timely access to the income support they need. This is because the EI system was unable to process the unprecedentedly high volume of applications received in the past week.
A worker is eligible for the CERB if:
a person resident in Canada who is at least 15 years of age,
has total income of at least $5,000 in 2019 or in the 12 months preceding application, AND
meets the following:
the worker, whether employed or self-employed, ceases working for reasons related to COVID-19 for at least 14 consecutive days within the four-week period in respect of which they apply for the CERB, and
they do not receive income, EI or any other benefits during that period they ceased working.
The government said that Canadians who are already receiving EI regular and sickness benefits as of today would continue to receive their benefits and should not apply to the CERB. EI eligible Canadians who have lost their job can apply for EI here.
if your EI benefits end before October 3, 2020, you could apply for the CERB once their EI benefits cease, if they are unable to return to work due to COVID-19.
Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply.
Canadians who are eligible for EI regular and sickness benefits would still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.
When applying through My CRA or My Service Canada, you will need a secure PIN code. If you feel you qualify for this benefit and do not have access to either of these accounts, you can request your PIN through the below link. It can take up to 10 business days before you receive it in the mail. If you have received your PIN, please register your PIN early and anticipate delays.
HERE IS OUR DOWNLOADABLE CHECK LIST SO YOU CAN KNOW IF YOU QUALIFY:
EI Work-sharing (WS) Program
Workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers can receive EI benefits for an extended period of up to 76 weeks due to the downturn in the business as a result of COVID-19.
Saskatchewan – State of Emergency LIST OF CLOSURES (UPDATED MARCH 25)
The new measures announced Friday, March 20th include limiting gatherings to no more than 25 people in one room, except when people can maintain two metres between them.
Nightclubs, bars, and lounges all need to close. Takeout food and alcohol can be permitted with two meters of distancing between customers and delivery persons.
The following businesses are now prohibited from providing public-facing services:
The following clinics are ordered to close with the exception of non-elective procedures:
Registered massage therapy
All daycares are limited to a maximum of eight children per teacher.
Allowable business services as of March 25, 2020:
The province has ordered mandatory 14-day self-isolation for anyone who has travelled internationally or has come into contact with someone with COVID-19.
“This is not a suggestion, this is not a guideline, this is now the law,” Moe said. He said anyone not following the directive could be arrested. Penalties could include a $2,000 fine for failing to self-isolate for 14 days upon returning to Saskatchewan.
Canadian Border Closures
Businesses with cross-border interests should be aware that the Canadian federal government is temporarily restricting all non-essential travel between the Canadian-U.S. border to address concerns related to COVID-19. The Canadian government made this announcement on March 18, 2020, in agreement with the United States. While commercial trade is still able to continue, businesses should keep an eye on the Canada Border Services Agency (CBSA) and, in some areas, brace for certain shipment delays.
Sporting good and adventure stores
Vaping supply shops
Boats, ATV, or snowmobile retailers
Gift, book, or stationery stores
Jewelry and accessory stores
Music, electronic and entertainment stores
PST PENALTY & INTEREST RELIEF
The provincial government has introduced penalty and interest relief in relation to Covid-19. Note that you will have to submit a waiver request if you do not file and pay, and a decision will be made after the fact. This waiver request can be sent through SETS or emailed to firstname.lastname@example.org
Crown Corporation Utilities
To assist with cash flow, all crown utilities will defer bills with zero interest for six months for those impacted by COVID-19. Those of you with bills on autopay to SaskPower, SaskTel and SaskEnergy may consider cancelling those automatic payments. Each Crown has a different process for this through email or online.
Federal Tax filings and Deferrals (UPDATED April 5, 2020]
Businesses will be able to defer payment of any income tax amounts until September 1, 2020. This deferral applies to tax balances and installments that are owing on or after March 18, 2020 and before September 2020. These amounts will not be subject to interest or penalties during this period.
Self-employed individuals and spouses filing date of June 15 has not changed. Corporate filing of T2’s has been deferred to June 1 if your filing deadline was originally between March 18, 2020 and May 31, 2020. GST/HST remittances can now be deferred until June 30, 2020. Deferrals will similarly be available for customs duty and sales taxes for importers. The deadline for businesses to file their returns is unchanged. Those who are able to, should continue to file their GST/HST returns on time. CRA has indicated that they recognize the difficult circumstances faced by businesses, the CRA won’t impose penalties where a return is filed late provided that it is filed by June 30th.
In addition, the government has indicated that payroll remittances are due on a business’s regular schedule.
Additionally, CRA says it will temporarily suspend all audit interaction with taxpayers and representatives for the vast majority of businesses. In particular, the CRA will not contact any small or medium businesses to initiate any post-assessment GST/HST or Income Tax audits for four weeks. Those of you waiting for refunds will quite likely be
put on hold.
Deadlines for personal tax filings have been delayed to June 1, 2020.
Temporary Wage Subsidy – Reduction of Payroll Remittances
The Temporary Wage Subsidy for Employers is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA).
You are an eligible employer if you:
are a non-profit organization, registered charity, an individual, r a Canadian-controlled private corporation (CCPC); or a partnership (if the members of the partnership fit certain criteria)
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.
The subsidy is equal to 10% of the remuneration you pay between March 18, 2020, and June 20, 2020, up to $1,375 per employee and to a maximum of $25,000 total per employer. For example, if you have 5 employees, the maximum subsidy you can receive is $6,875 ($1,375 x 5 employees), even though the per employer maximum is $25,000.
The subsidy will need to be calculated manually. Once you have calculated your subsidy, you can reduce your current remittance of federal, provincial, or territorial income tax from your payroll remittances. It is important to note that you cannot reduce your remittance of Canada Pension Plan contributions or Employment Insurance premiums, only the remittance portion that is related to income tax.
If the income taxes you deduct are not sufficient to offset the value of the subsidy in a specific period, you can reduce future remittances to benefit from the subsidy. This includes reducing remittances that may fall outside of the application period for the wage subsidy (after June 20, 2020).
You can start reducing remittances of federal, provincial, or territorial income tax in the first remittance period that includes remuneration paid between March 18, 2020, and June 20, 2020.
For example, if you are a regular remitter, you can reduce your remittance that is due to the CRA on April 15, 2020.
If you receive the subsidy, you have to report the total amount as income in the year in which the subsidy is received.
The Canada Emergency Wage Subsidy (UPDATED APRIL 2, 2020)
To help businesses keep and return workers to their payroll through the challenges posed by the COVID-19 pandemic, the Prime Minister proposed the new Canada Emergency Wage Subsidy. This would provide a 75 per cent wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020.
Eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities. This subsidy would be available to eligible employers that see a drop of at least 30 per cent of their revenue in the comparable period in their previous year. In applying for the subsidy, employers would be required to attest to the decline in revenue.
Any benefit from the 10% Temporary Wage Subsidy would reduce the amount available to be claimed under the Emergency Wage Subsidy in that same period.
Legislation for this subsidy has not passed, and additional details of the program are pending.
Bank Debt Relief and New Debt Facilities (UPDATED APRIL 5)
Banks are providing relief for personal and commercial mortgages and other lending products be deferring the principal portion of loan payments. We suggest asking for relief as soon as you can, as the queue for these requests is growing rapidly. They will likely be reviewed on a first-come, first-served basis. Some banks are processing these
requests simply from an email request, and others are requesting up to date financial statements. Limitations may exist, such as BDC is deferring loans only up to a loan balance of $1 million.
Canada Emergency Business Account
The Canada Emergency Business Account (CEBA) is being administered by retail
banks such as RBC, TD and Scotiabank. They are designed to help SME’s with their
most pressing needs and position the economy to recover.
The CEBA will provide businesses with access to a $40k line of credit with the following
0% interest until December 31, 2022
Requires no minimum monthly principal payments until December 31, 2022
Principal payments can be made at any time
$10k forgivable loan is available provided balance is paid before December 31, 2022
Borrowers must agree to use the funds for operating costs that cannot be deferred, such as payroll, rent, insurance, property tax and vendor payments.
To be eligible, your organization must fit the following criteria:
You must be an operating company and not a holding company
Your payroll expense in 2019 calendar year was between $50k and $1M
You must provide your employer account number from your T4 Summary and
your employment income reported in Box 14 of your 2019 T4.
Applications will be available starting April 6 th and should be made online through the same bank as your business account or your primary financial institution for your business.
Student Loan Relief
Student loan relief has also been announced in the Federal Government stimulus program. Effective March 30, 2020, all student loan borrowers will automatically have their repayments suspended until September 30, 2020. No payment will be required and interest will not accrue during this time. Students do not need to apply for the repayment pause.
Clients that carry interruption insurance are urged to check their policies on coverage. Each policy and carrier is different, so please review.
Those of you with property that are paying taxes to the City of Regina through TIPPS may consider deferring these automatic payments. Property tax must be up to date as of June 30th to avoid penalties. The attached form can be mailed to email@example.com
Most legal contracts, including leases, include an Act of God clause or “Force Majeure” clause that is likely to list a pandemic. You may need to review these agreements in the conduct of your business.
We are committed to informing you as new information unfolds, so please come back to this page often to review updates and changes.
The Corner Office, President & CFO