Greetings to all Global Tax Services Clients!
COVID-19 is raging world-widely, but it will definitely be easier to overcome if we work together and help each other. Let’s all be brave and have to relax and enjoy the upcoming spring with keeping the social distance and stay home.
- CEBA (Canada Emergency Business Account)
CEBA is a federal government-guaranteed loan to help the eligible businesses pay for their operating expenses.
Amount applicable; Maximum: $40,000 (in the form of Revolving Line of credit)
- Business that has been registered and in operation on or before March 1, 2020
- Business with last 12 months’ payroll expense between $50,000 and $1M (possible for further changes)
** 2019 T4 Summary of Remuneration Paid is required for application.
2) How/When to Apply
Only available online via main banks from April 6, 2020. We have noticed that most chartered banks are working the online system.
- Interest Rate
- No interest applies until December 31, 2022.
- 5% interest per annum from January 1, 2023
- Payment exemption of 25% of Loan Amount
- If you pay 75% of the balance of the term loan on or before December 31, 2020, the remaining balance (25%) of the loan will be forgiven
(For example, if you repay $30,000 for the loan of $40,000, $10,000 will be forgiven)
3) Relief for Non-Eligible Business
Business that has been operating less than a year is not eligible for CEBA but need to keep a close eye on it since the qualifications may be more flexible as more detailed information is announced in the future.
- Additional Information
- Loan Expiration Date: December 31, 2025
2. Wage Subsidy
An employer (including individual, taxable corporation, partnership and NPO) experienced a year-over-year revenue decline of at least 30% for the months of March, April and May 2020. (Further information and details on how to compute revenue will be announced in the future)
**Employers will not be expected to submit any paperwork at the time of application but CRA will verify its attestation during an audit by the CRA.
- Subsidy Amount
- Subsidy for a new hire (hired after March 15) is 75% of the amount of remuneration paid, up to a maximum of $847/week
- Subsidy for a pre-existing employee is the lesser of 75% of the amount of remuneration paid or $847/week
2) How to Apply
Online application through CRA My Business Account portal (expect to launch in 3 to 6 weeks)
3) Limiting Condition
An employer is not eligible to claim the subsidy for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the CERB.
The federal government urgently convenes a emergency session of the Parliament to revise the Act on Government Grants; fair relief measures may be prepared for businesses that lack the specific application requirement and qualifications.
Next time, we look forward to hearing warm news from the Parliament (Ottawa) as well as from your banks.
We wish the best all clients and their families who are always with Global Tax Services!