Cumulative is dedicated to helping small businesses during this challenging period. We've prepared this (always updated) page with information on the various measures available to your business.
If you have any questions about any of the support measures, please feel free to reach out.
Changes to this program were made after the initial announcement - you can now use revenues from Jan & Feb 2020, instead of revenues from prior year, when calculating your drop in revenue. You also only need to show a 15% drop in revenue for the month of March 2020 (instead of 30%).
In order to qualify, you need to be a corporation that has reported a drop in revenue of at least 15% in March 2020, or at least 30% in April and May 2020, compared to either the revenues in the same month in the prior year, or an average of January & February 2020. You can qualify for 1 or more of these months - please see the Eligibility Periods section below for more details.
Revenue has to be business revenue from third-party customers. It cannot be 'revenue' from a related company. It can be calculated using either the cash or accrual method, but you have to use the same method for each of the three periods.
A lot of companies are in the pre-revenue stage, who are also impacted by COVID-19 but may not qualify due to these revenue requirements. If you'd like to discuss your current situation or see what qualifies as revenue, please contact us.
Generally the subsidy is 75% of the total gross salary paid to your employees for the period between March 15, 2020 and June 6, 2020.
In cases where you have decreased current salaries as compared to the baseline period (before March 2020), you can get a subsidy of up to 75% of the baseline salary amount, with the expectation that you pay the remaining 25% to maintain the same baseline salary.
Baseline salary is the average weekly salary paid between January 1 and March 15 inclusive, excluding any seven-day periods where the employee was not paid.
In both cases, there is a maximum subsidy of $847 per week per employee for this period. There is no maximum subsidy per business.
For business owners, the subsidy is limited to 75% of pre-crisis weekly salary. If owners were not paid before March 15, they cannot qualify for this subsidy.
Dividends are not eligible; the subsidy only applies to salaries, wages and other remuneration on which you withhold payroll taxes & deductions.
Between March and May 2020, there may be only certain months during which your revenues dropped enough to qualify for the subsidy. Depending on the months that you qualify for, you can claim the subsidy for any salaries paid for a certain period.
When comparing your current revenues to a prior period, you can either compare each month to the average of Jan & Feb 2020, or to the same month in the prior year. You cannot switch the comparison period once you select it - if you compared March 2020 revenues to the Jan-Feb 2020 average, you will have to compare April and May 2020 revenues to the same period.
If you qualify for a certain period, you automatically qualify for the next period.
Revenue can be calculated using either the accrual method or the cash method, but not a combination of both. Once you select a method, you are required to use that method for the entire duration of the program.
For example, your revenue for March 2020 may have dropped by 50% from March 2019, but your May 2020 revenue may only have dropped by 10% from your May 2019 revenue. In this case, you would only be eligible for the subsidy for Period 1 and Period 2 (see previous paragraph) - but not for Period 3.
You can claim the 10% Temporary Wage Subsidy (described below) in addition to the CEWS. When calculating the CEWS amount, you will have to deduct any Temporary Wage Subsidy already claimed.
|Period||If your revenues dropped at least...||in the month of||compared to||you can claim the subsidy for wages paid during|
|Period 1||15%||March 2020||Mar 2019 or average of Jan & Feb 2020||March 15 – May 9, 2020|
|Period 2||30%||April 2020||Apr 2019 or average of Jan & Feb 2020||April 12 – June 6, 2020|
|Period 3||30%||May 2020||May 2019 or average of Jan & Feb 2020||May 10 – June 6, 2020|
The application is available on the CRA website as of April 27. Businesses can apply for the subsidy through CRA's My Business Account, or through a separate online application on the CRA website. Subsidy payments can be expected within 10 days of applying.
This new 75% wage subsidy does not replace the 10% Temporary Wage Subsidy which is described below. Any subsidy you received under the 10% TWS will reduce the CEWS that you will get. If you don't qualify for the CEWS, you may still eligible for the 10% Temporary Wage Subsidy.
Revenu Québec has not announced any such subsidies yet, so this only applies to Federal & Ontario tax withheld from employees' pay. We will let you know as soon as something is announced for Québec.
Revenu Québec has, however, announced that they are prioritizing personal income tax returns involving a refund, and are processing applications for business tax credits and tax returns faster.
Employers are required to keep records showing their reduction in revenues, as well as salaries paid to employees. You will be required to repay any subsidy amounts if you do not meet the eligibility requirements. The government will be proposing additional rules to ensure that the subsidy is not inappropriately obtained and to ensure that employees are paid the amounts they are owed. They will also be proposing new offences for employers that provide false or misleading information to obtain access to this benefit, or who misuse any funds obtained under the program.
The Temporary Wage Subsidy is available to qualifying businesses starting March 18, 2020.
In order to qualify, you need to be a private Canadian corporation with less than $15 million in taxable capital.
The subsidy is 10% of the total gross salary paid to your employees between March 18, 2020 and June 20, 2020. There is a maximum subsidy of $1,375 x number of employees paid during this period, and an overall maximum of 25,000 per business.
The subsidy is structured as a reduction of payroll remittances to CRA, instead of having to apply and receive funds. You can simply reduce the remittance of income tax tax withheld from employees by 10% of the gross salary.
The following payroll service providers that have implemented automatic calculation of the Temporary Wage Subsidy in their payroll platform:
Wagepoint - More Information
PaymentEvolution - More Information
EmployeurD - please refer to the email from them with instructions.
Nethris - please refer to the email from them with instructions.
Rise Payroll - More Information
If you're using CRA's Payroll Deductions calculator to calculate your withholding taxes & remittance amounts, you will still have to calculate the income tax withholding amount and deduct it from employees' net pay as you normally would. However, when remitting the income tax withholding to the CRA, you can reduce it by 10% of the gross salary paid.
The first remittance payment that will be affected by the subsidy would be April 15, 2020.
Revenu Québec has not announced any such subsidies yet, so this only applies to Federal & provincial (except Quebec) income tax withheld from employees' pay. We will update this page as soon as something is announced for Québec.
The subsidy is considered taxable income for your business, so it will be included as revenue in the next fiscal year-end that includes this three-month period.
The Canada Emergency Business Account is an interest-free loan of $40,000 for qualifying businesses, of which up to $10,000 is forgivable.
In order to qualify,
The Government has partnered with major banks & credit unions to provide this loan to businesses. The application is available via online banking. You need to have a business bank account that was active on March 1, 2020.
Please refer to the following information pages for your specific bank:
Note that the various banks have structured this loan differently - some banks will deposit the entire $40,000 into your bank account, however the interest-free periods below will still apply.
The Canada Emergency Business Account will initially be set up as an interest-free revolving line of credit until December 31, 2020.
On January 1, 2021, any outstanding balance on the $40,000 line of credit will be converted into a 5‑year term loan, with the balance to be fully repaid on Dec 31, 2025.
No interest applies until the end of 2022. Starting January 1, 2023, interest will accrue on the loan balance at the rate of 5% per annum, payable monthly.
If you pay 75% of the loan balance by December 31, 2022, omthe remaining balance of your term loan will be forgiven. For example, if you borrowed $40,000 by January 1, 2021 (the date the credit line was converted to a loan) and you repay $30,000 by December 31, 2022, the remaining $10,000 will be forgiven.
The government requires that companies agree to use funds from this line of credit to pay for operating costs that cannot be deferred, such as payroll, rent, utilities, insurance, and property tax. It cannot be used to for paying dividends or increases in management compensation.
Procesing of tax credits by CRA (including SR&ED and OIDMTC) has not been impacted.
The CRA will not be contacting small/medium businesses to initiate any new audits, except in high risk cases. All other audits are temporarily suspended. SR&ED claims that were awaiting an FTCAS meeting are now being pushed through for processing & refund.
Revenu Québec has pledged to expedite the processing of business tax credit applications, including the provincial R&D tax credit and the tax credit for the production of multimedia titles (MMTC/CTMM).
RQ has also suspended all audit activities. You will only be contacted if necessary to process a refund.
We have prepared a calculation worksheet that can help you calculate the amount of the Canada Emergency Wage Subsidy and the Temporary Wage Subsidy. Click here to download it.
|Corp Tax Filing||Corporations with a filing due date between March 18 and May 31, 2020 now have up to June 1, 2020 to file their tax returns||Corporations with a filing due date between March 17 and May 31, 2020 now have up to June 1, 2020 to file their tax returns, including tax credit applications.|
|Corp Tax Payments||Any tax balances or instalments due between March 18, 2020 and August 31, 2020, can be deferred until September 1, 2020.||Any tax balances or instalments due between March 18, 2020 and August 31, 2020, can be deferred until September 1, 2020.|
|GST/HST Filing||Unchanged, but the CRA will not impose penalties for late filings if filed by June 30, 2020.||RQ is following the federal changes and will not charge penalties for any late filings until June 30, 2020.|
|GST/HST Payments||Any GST/HST payments or instalments due between March 27 and June 30, 2020, can be deferred until June 30, 2020 without any interest.||Any GST/HST and QST payments or instalments due between March 27 and June 1, 2020, can be deferred until June 30, 2020 without any interest.|