COVID-19 Relief Funding for Small Businesses

The Canadian and Ontario Governments have created several relief programs for small and mid-sized businesses. We have gathered the relevant details on requirements and how to apply below.

Canada Emergency Wage Subsidy (CEWS) 

Apply through ‘My Business Account’ on the CRA website 

Requirements to qualify: 

1. Have had a CRA payroll account on March 15, 2020 

2. Employer type

   1. Individuals

   2. Corporation not exempt from income tax

   3. Registered charities

3. Have experienced a drop in revenue

   1. Periods 1 – 6 (March 15, 2020 – August 29, 2020) are closed

   2. Periods 7 (August 30, 2020) onwards still open for application

   3. No minimum revenue drop required, but rate of revenue drop is used to calculate how much subsidy you receive (wage subsidy calculator) and requires the following info: i.

      1. Base revenue calculation*

      2. Employee wages

      3. Total EI and CPP contributions

 *for base revenue drop, choose one the following two methods: 

1. 1) the average of the eligible revenue you earned in January and February 2020 

1. the higher of the following two calculations (note you will need to repeat this process for each period you apply for):

   1. Current period: Revenue drop (%) = 1 – (Current claim period revenue divided by revenue from the prior reference period for the claim period)

   2. Previous period: Revenue drop (%) = 1 – (Previous claim period revenue divided by revenue from the prior reference period for the previous claim period)

Canada Emergency Business Account (CEBA) 

$60,000 loan interest free until December 31, 2022. If you have the $40,000 loan already, you may instead apply for a $20,000 expansion. In either case ($60,000 loan OR $20,000 expansion of original loan) you are eligible for up to $20,000 loan forgiveness if you repay the full amount on or before December 31, 2022. If you do not, the loan automatically extends to a 3-year term with 5% annual  interest and you are no longer eligible for the $20,000 forgiveness. 

Apply through your primary financial institution, must have business chequing/operating account. Estimated 10 - 15 business days to approve your application. You can check application status online here. 

Requirements to qualify: 

1. Must have sole proprietorship, partnership or Canadian-controlled private corporation (CCPC) in operation by March 1, 2020 (CRA Business Number is required) 

2. Type of application

   1. Payroll stream (employment income between $20,000 – $1,500,000) for 2019

      1. isum of T4 slips (box 14)

   2. b. non-deferrable expense stream (employment income less than 20,000) for 2019

      1. eligible expenses between $40,000 - $1,500,000 for 2020 (includes rent, property tax, utilities, insurance)

      2. filed income tax return in 2019 tax year (or 2018 if 2019 not yet submitted)

      3. pre-screen tool available (this is non-binding, just an estimate)

      4. can be adjusted due to CEWS, CERS

      5. evidence of 2020 non-deferable expenses (receipt, invoices, agreements)

Canada Emergency Rent Subsidy (CERS) 

Eligible periods run between Sept 27, 2020 and June 2021 for qualifying renters and property owners. This includes a base subsidy and lockdown support, which applies if you have been affected by public health orders for one week or more. 

Current claim period in effect is January 17, 2021 - Feb 13 2021. The last day to apply for this period is August 12, 2021. Next claim period will be February 14m 2021 - March 13, 2021. Applications for this period open on March 14, 2021. 

Apply through ‘My Business Account’ on the CRA website.

Requirements to qualify: 

1. 1) must have CRA Business Number on Sept 27, 2020 OR payroll account on March 15, 2020

   1. a. in payroll case, you must apply for CRA Business Number prior to application

2. Employer type

   1. Individuals

   2. Corporation not exempt from income tax

   3. Registered charities

3. Have experienced a drop in revenue

   1. No minimum revenue drop required, but rate of revenue drop is used to calculate how much subsidy you receive (rent subsidy calculator)

4. Qualifying properties

   1. Any ‘real or immovable property’ (buildings or land) in Canada

   2. Not any of your residences, nor properties primarily used for rental income

5. Eligible expenses

   1. Must be paid or payable under written agreement in place prior to Oct 9, 2020 (or a renewal on substantially similar terms)

   2. Rent, insurance, utilities, common area maintenance, property taxes, interest on commercial mortgages

   3. Expenses may total up to $75,000 per location, and $300,000 total across all properties

Ontario Covid-19 Relief Programs 

Applications for the following programs are submitted through the Ontario website here. These programs all require a CRA Business Number, banking information and bills/receipts for associated costs. 

1. Ontario Small Business Support Grant

   1. a. Eligible for $10,000 - $20,000 in relief funds for small businesses that were required to close or significantly restrict services under the December 26, 2020 provincewide shutdown

   2. Must demonstrate a revenue drop of at least 20% comparing April 2019 and April 2020

2. Ontario’s Main Street Relief Grant: PPE Support

   1. Eligible business will get a one-time grant of up to $1,000

   2. Must have between 2 – 19 employees

   3. Operate in one of the following sectors:

      1. Retail

      2. Accommodation and food services

      3. Repair and maintenance

      4. Personal and laundry services

      5. Gyms and yoga studios

      6. Arts, entertainment and recreation

3. Property tax and energy cost rebates

   1. You are eligible for these rebates if you qualify for the Ontario Small Business Support Grant; or

   2. You were required to close or significantly restrict services as a result of being under control, lockdown or shutdown measures, or under Stage 2 restrictions under the previous frameworks

   3. This program covers rebates for municipal and education property taxes, energy costs (electricity, natural gas, propane and heating oil) and covers the entire length of time the restrictions are in place

Highly Affected Sectors Credit Availability Program (HASCAP) Guarantee 

Apply through your primary financial institution. The program will be available until June 30, 2021. Further information can be found through the Business Development Bank of Canada. 

Requirements to qualify: 

1. Your business was financially stable and viable prior to the current economic situation 

2. One of the following applies to you: 

   1. You have received the Canada Emergency Wage Subsidy (CEWS) or the Canada Emergency Rent Subsidy (CERS) for at least three months (not necessarily consecutive) within the eight-month period prior to the date of application for HASCAP

   2. You have not received CERS or CEWS but are eligible - you must first apply for either or both

   3. You are not eligible for CERS or CEWS – you must provide financial information showing a monthly year-over-year revenue decrease of at least 50% for at least three months (not necessarily consecutive) within the eight-month period prior to the date of application for HASCAP

3. The loan must be used to continue or resume operations 

4. The loan cannot be used to pay or refinance existing debt