Small Business Accounting Guide: How Your Business Can Benefit From Canada's COVID-19 Economic Response Plan

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  • Small Business Accounting Guide: How Your Business Can Benefit From Canada's COVID-19 Economic Response Plan

The Government of Canada announced last Friday that more measures have been added to the current COVID-19 Economic Response Plan which to date is committing $107 billion in financial support. The Canadian Government is hoping that this increase in funds and relief for businesses softens the economic blow on our country by providing businesses with the ability to continue operations in a safe manner while keeping more employees on payroll.


 

A series of recent events resulting from the COVID-19 pandemic has left many Canadians scrambling when it comes to their finances.

Our focus today?

Small Businesses. Small Businesses make up approximately 70% of Canada’s labour force. Additionally, a statistic from the Saskatchewan Government where KB Accounting Services Inc. is located:

“In 2018, Saskatchewan had the highest rate of small businesses in Canada, about 129 small businesses for every 1,000 people, compared to about 110 nationally”.

As your small business accounting guide, here are the current enhancements to the Government of Canada’s COVID-19 Economic Response Plan that pertain to businesses and how you can benefit:

Wage Subsidy—

A 75% wage subsidy for qualifying businesses, for up to 3 months as of March 15, 2020.

  • Helping keep and return workers to the payroll
  • More details on eligibility criteria will be shared by the end of the month

Goods and Sales Tax/Harmonized Sales Tax (GST/HST) Payments—

Defer all sales tax payments and custom duties owed for imports until June 2020.

  • Equivalent to $30 billion in interest-free loans to Canadian businesses
  • Ease cashflow challenges by assisting businesses in paying their employees and bills

New Canada Emergency Business Account—

Provide up to $25 billion to eligible financial institutions so they can supply interest-free loans to small businesses

  • Loans are guaranteed and funded by the Government of Canada
  • Ensuring small businesses have access to the capital they require at a 0% interest rate
  • Allowing small businesses to continue paying for rent and other business-related expenses in the coming months

New Small and Medium-sized Enterprise Loan and Guarantee Program—

Permits up to $40 billion in lending, supported through Export Development Canada and Business Development Banks for guaranteed loans when small businesses go to their financial institutions due to COVID-19.

  • For small and medium-sized companies who need greater financial assistance to meet operational cash flow requirements

Rest assured, the financial relief available for Canadian Businesses is continuing to grow as they days go by. Numerous policies and procedures are being launched, tweaked and implemented to support and benefit businesses across the country. As your small business accounting guide, I encourage you to review these supports available by the Government of Canada and see how your business can benefit from what is currently being offered.

 

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