Note: this article was published in February 2021 and is retained for reference. Program details, deadlines and amounts described below were current at that time and have since changed or expired.
A note on bookkeeping and COVID programs for business
The two most significant programs right now are the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS). Both require you to maintain up-to-date bookkeeping, specifically on the revenue side. If your business is one that generally does bookkeeping once a year, please pay attention to the deadlines for applying for these programs, because you may be out of luck if you miss the applications because of bookkeeping not being up to date. If you require our support to apply for these programs, please reach out as soon as possible.
As we wait for vaccines, the government is in the process of extending support programs for individuals and businesses, but at this point it does not look like any new programs are on the horizon. However, with an upcoming budget (and maybe even an election), this all could change.
Items to be aware of
Home office expenses (for employees) — Were you required to work from home in 2020? There are three ways to make a claim:
- Temporary flat rate method — claim $2 for each day you worked from home in 2020 due to COVID-19, up to a maximum of $400. You must be able to document the number of days.
- Detailed method — claim the actual amounts you paid, supported by documents, based on the percentage of the home you are using. You will require a form T2200S or T2200 from your employer. Many expenses are not claimable (e.g. mortgage interest and capital expenses), but many are, such as a portion of utilities, property tax, rent, and internet.
Which method is best for you depends on your specific situation.
CRA audits / Audit Shield — It is not yet clear what CRA audits will look like for these programs, but if you applied for CEWS or CERS we strongly encourage clients to purchase our Audit Shield when renewals come out. This covers up to $10,000 in fees for many CRA audits (exceptions apply).
CERB — Did you receive CERB? You should be receiving a T4A slip reporting the amounts you received. If you paid any back in 2021, you will get the deduction in next year's filing, not the current year.
HASCAP — The Highly Affected Sectors Credit Availability Program provides heavily impacted businesses access to guaranteed, low-interest loans of $25,000 to $1 million to cover operational cash-flow needs.
BC Small and Medium Sized Business Recovery Grant — Provides $10,000 to $30,000 to impacted B.C. businesses, with an additional $5,000 to $15,000 for eligible tourism-related businesses. Our firm is approved by Small Business BC to help with your recovery plan.
Income supports (CRCB, CRSB, CRB, EI) — The number of weeks one can qualify for has been extended; for example, one can now qualify for 50 weeks of EI, up from the original 26.
Business subsidy deadlines & reporting
- CEWS — Each period is due 180 days after the end of the period. Period 6 (Aug 2 – Aug 29, 2020) filing deadline is February 25.
- T4 slips — T4s are required to report amounts paid in specific periods that correspond to CERB periods (Boxes 57, 58, 59 and 60), used by CRA to audit CERB, CEWS and TWS claims.
- PD27 — If you claimed CEWS or the 10% Temporary Wage Subsidy (TWS), form PD27 must be filed even if none was claimed.
- CEBA — Increased to $60,000 with $20,000 being forgivable; review the bank agreement closely to ensure you qualify.
- CERS — Filings are required within 180 days of the end of the period; the first deadline (Sept 27 – Oct 24, 2020) is April 22, 2021.
Provincial programs of note
Alberta
- Small and Medium Enterprise Relaunch Grant — up to $20,000 to offset a portion of relaunch costs.
- Critical Worker Benefit — $1,200 for eligible frontline workers.
British Columbia
- BC Recovery Benefit — a one-time tax-free payment of up to $1,000 for families ($500 for individuals), subject to income thresholds.
- Launch Online — a grant of up to $7,500 to help a BC business start an e-commerce/online shop.
- BC Increased Employment Incentive — a refundable tax credit for private sector employers; applications open March 2021.
- BC PST Rebate on Select Machinery and Equipment — corporations can apply for a rebate of PST paid Sept 17, 2020 – Sept 30, 2021; applications open April 1, 2021.
- BC Land Owner Transparency Registry and BC Corporate Transparency Act — new beneficial-ownership disclosure requirements (contact your lawyer).
Ontario
- Main Street Recovery grants/rebates of up to $1,000 for eligible businesses (PPE, property tax, energy bills).
- Ontario Small Business Support Grant — $10,000 to $20,000 to help cover decreased revenue from the province-wide shutdown.
- Employer Health Tax (EHT) exemption permanently increased from $490,000 to $1 million.
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