Expanded eligibility for CEBA $40,000 interest-free loan

/in , , , , /by

“If you are the sole owner-operator of a business, if your business relies on contractors, or if you have a family-owned business and you pay employees through dividends, you will now qualify.” – PM Justin Trudeau

Eligibility

The Prime Minister outlined the expanded eligibility for the Canada Emergency Business Account and highlighted companies such as hair salon owners, independent gym owners with contracted trainers and local physio businesses will now be eligible.  

The eligible amounts are being expanded to include businesses with 2019 total payroll between $20,000 – $1.5 million.

How do I apply?

Prior to applying, please make sure you have this information readily available:

  • Canada Revenue Agency Business Number (BN 15 digits)

  • 2019 T4 Summary of Remuneration Paid (T4SUM)

Apply online at the financial institution your business banks with:

There are restrictions on the funds can be used. From their website https://ceba-cuec.ca/:

“The funds from this loan shall only be used by the Borrower to pay non-deferrable operating expenses of the Borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.”

Click to Get Full Details

Extended! Canada Emergency Wage Subsidy extended beyond June

/in , , , , /by

On May 8th, Prime Minister Justin Trudeau announced that they will extend the Canada Emergency Wage Subsidy (CEWS) beyond June. This measure gives qualifying employers up to $847 per employee each week so they can keep people on the payroll.

Eligibility

To be eligible to receive the wage subsidy, the Government of Canada website states you must:

  • be an eligible employer. Eligible employers include:

    • individuals (including trusts)

    • taxable corporations

    • persons that are exempt from corporate tax (Part I of the Income Tax Act), other than public institutions:

      • non-profit organizations

      • agricultural organizations

      • boards of trade

      • chambers of commerce

      • non-profit corporations for scientific research and experimental development

      • labour organizations or societies

      • benevolent or fraternal benefit societies or orders

    • registered charities

    • partnerships consisting of eligible employers

    Public institutions are not eligible for the subsidy. This includes municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals.

  • have experienced an eligible reduction in revenue.

  • have had a CRA payroll account on March 15, 2020

Online Calculator

The Canada Revenue Agency launched an online calculator to help businesses determine the amount they can expect from the wage subsidy program.  

Check Eligibility
Calculate your Subsidy amount

Succession Planning for Business Owners

/in , , , , /by

Succession Planning for Business Owners

Business owners deal with a unique set of challenges. One of these challenges includes succession planning. A succession plan is the process of the transfer of ownership, management and interest of a business. When should a business owner have a succession plan? A succession plan is required through the survival, growth and maturity stage of a business. All business owners, partners and shareholders should have a plan in place during these business stages.

We created this infographic checklist to be used as a guideline highlighting main points to be addressed when starting to succession plan.

Needs:

  • Determine your objectives- what do you want? For you, your family and your business. (Business’ financial needs)

  • What are your shares of the business worth? (Business value)

  • What are your personal financial needs- ongoing income needs, need for capital (ex. pay off debts, capital gains, equitable estate etc.)

There are 2 sets of events that can trigger a succession plan: controllable and uncontrollable.

Controllable events

Sale: Who do you sell the business to?

  • Family member

  • Manager/Employees

  • Outside Party

  • There are advantages and disadvantages for each- it’s important to examine all channels.

Retirement: When do you want to retire?

  • What are the financial and psychological needs of the business owner?

  • Is there enough? Is there a need for capital to provide for retirement income, redeem or freeze shares?

  • Does this fit into personal/retirement plan? Check tax, timing, corporate structures, finances and family dynamics. (if applicable)

Uncontrollable Events

Divorce: A disgruntled spouse can obtain a significant interest in the business.

  • What portion of business shares are held by the spouse?

  • Will the divorced spouse consider selling their shares?

  • What if the divorced spouse continues to hold interest in the business without understanding or contributing to the business?

  • If you have other partners/shareholders- would they consider working with your divorced spouse?

Illness/Disability: If you were disabled or critically ill, would your business survive?

  • Determine your ongoing income needs for you, your spouse and family. Is there enough? If there is a shortfall, is there an insurance or savings program in place to make up for the shortfall amount?

  • Will the ownership interest be retained, liquidated or sold?

  • How will the business be affected? Does the business need capital to continue operating or hire a consultant or executive? Will debts be recalled? Does the business have a savings or insurance program in place to address this?

Death: In the case of your premature death, what would happen to your business?

  • Determine your ongoing income needs for your dependents. Is there enough? If there is a shortfall, is there an insurance or savings program in place to make up for the shortfall amount?

  • Will the ownership interest be retained, liquidated or sold by your estate? Does your will address this? Is your will consistent with your wishes? What about taxes?

  • How will the business be affected? Does the business need capital to continue operating or hire a consultant or executive? Will debts be recalled? How will this affect your employees? Does the business have a savings or insurance program in place to address this?

Execution: It’s good to go through this with but you need to get a succession plan done.  Besides having a succession plan, make sure you have an estate plan and buy-sell/shareholders’ agreement.

Because a succession plan is complex, we suggest that a business owner has a professional team to help. The team should include:

  • Financial Planner/Advisor (CFP)

  • Succession Planning Specialist

  • Insurance Specialist

  • Lawyer

  • Accountant/Tax Specialist

  • Chartered Life Underwriter (CLU)

Next steps…

  •  Contact us about helping you get your succession planning in order so you can gain peace of mind that your business is taken care of.

Apply for Canada Emergency Wage Subsidy starting April 27th | Calculate your subsidy

/in , , , , /by

Apply for CEWS starting April 27th

On April 21st, Prime Minister Justin Trudeau announced that the Canada Revenue Agency will accept applications for the Canada Emergency Wage Subsidy (CEWS) starting Monday, April 27th. This new measure gives qualifying employers up to $847 per employee each week so they can keep people on the payroll.

To be eligible to receive the wage subsidy, the Government of Canada website states you must:

  • be an eligible employer. Eligible employers include:

    • individuals (including trusts)

    • taxable corporations

    • persons that are exempt from corporate tax (Part I of the Income Tax Act), other than public institutions:

      • non-profit organizations

      • agricultural organizations

      • boards of trade

      • chambers of commerce

      • non-profit corporations for scientific research and experimental development

      • labour organizations or societies

      • benevolent or fraternal benefit societies or orders

    • registered charities

    • partnerships consisting of eligible employers

    Public institutions are not eligible for the subsidy. This includes municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals.

  • have experienced an eligible reduction in revenue.

  • have had a CRA payroll account on March 15, 2020

Online Calculator

The Canada Revenue Agency launched an online calculator to help businesses determine the amount they can expect from the wage subsidy program.  

Check Eligibility
Calculate your Subsidy amount

BC: Reduces commercial property tax for businesses by average of 25%, help local governments

/in , , , /by

The province of British Columbia is providing additional support to businesses by reducing most commercial property tax bills by an average of 25%. In addition, the provincial government introduced new measures to support local governments facing revenue shortfalls.

“We know that B.C. communities and businesses are suffering from the economic impacts of COVID-19,” said Carole James, Minister of Finance. “That is why our B.C. COVID-19 Action Plan is focused on the health and safety of British Columbians, direct support for people and businesses and economic recovery for our province. We are providing further support by making additional temporary property tax changes to provide provincewide relief for business and local governments to help weather the pandemic, continue to deliver the services people count on and be part of our province’s economic recovery.”

– Minister of Finance, Carol James

From the BC government website:

“The Province is taking significant new steps to support B.C. businesses, non-profits and other organizations through the COVID-19 pandemic by:

  • further reducing the school property tax rate for commercial properties to achieve an average 25% reduction in the total property tax bill for most businesses, providing up to $700 million in relief. This enhances the 50% reduction to the provincial school property tax rate that was originally announced for classes 4, 5, and 6 as part of B.C.’s COVID-19 Action Plan.

  • Postponing the date that late payment penalties apply for commercial properties in classes 4,5,6,7 and 8 to Oct. 1, 2020, to give businesses and landlords more time to pay their reduced property tax, without penalty.

Responding to key concerns from local governments, the Province is addressing cash flow and revenue shortfalls with new measures that provide additional support:

  • authorizing local governments to borrow, interest-free, from their existing capital reserves to help pay for operating expenses, such as employee salaries.

  • delaying provincial school tax remittances until the end of the year. This will provide significant relief to local governments facing cash flow issues.

  • providing local governments greater flexibility to carry debt for an additional year.

  • These measures will provide local governments with the resources to meet their operational costs and required remittances to regional districts, regional hospital districts, TransLink and transit authorities, BC Assessment, the Municipal Finance Authority and other taxing authorities. This will ensure that other minor taxing authorities can count on receiving the full amount they bill to municipalities and the Province’s surveyor of taxes before Aug. 1, 2020.”

Click to see the Full News release

New Canada Emergency Commercial Rent Assistance | Canada Emergency Business Account Expanded

/in , , , , /by

Canada Emergency Commercial Rent Assistance

On April 16th, Prime Minister Justin Trudeau announced support for to help small businesses with their rent for the months of April, May and June.

The program is being worked out with the provinces and more details will be available shortly.

“Businesses and Commercial property owners are also facing specific challenges because of COVID-19 so we plan on introducing the Canada Emergency Commercial Rent Assistance. This program will provide support to help small businesses with their rent for the months of April, May and June. To implement this program we have to work with the provinces and territories as they govern rental relationships and we hope to have more details very soon” – PM Justin Trudeau

Canada Emergency Business Account

The eligible amounts are being expanded to include businesses with 2019 total payroll between $20,000 – $1.5 million.

There are restrictions on the funds can be used. From their website https://ceba-cuec.ca/:

“The funds from this loan shall only be used by the Borrower to pay non-deferrable operating expenses of the Borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.”

Click to Get Full Details

Expanded eligibility for Canada Emergency Response Benefit (CERB) & Boosted wages for Essential Workers

/in , , , , , , /by

From his speech this morning (April 15th), Prime Minister Justin Trudeau announced:

“Today, we’re announcing more help for more Canadians. This includes topping up the pay of essential workers. At the same time, we’ll also be expanding the Canada Emergency Response Benefit to reach people who are earning some income as well as seasonal workers who are facing no jobs and for those who have run out of EI recently. Expanding the CERB to include people who earn up to $1,000 per month. Maybe you’re a volunteer firefighter, or a contractor who can pickup some shifts, or you have a part-time job in a grocery store.”

Eligibility for CERB

On eligibility for CERB, the Prime Minister stated:

“If you earn $1,000 or less a month, you’ll now be able to apply for CERB.

If you were expecting a seasonal job that isn’t coming because of COVID-19, you’ll now be able to apply.

If you’ve run out of EI since January 1st, you can now apply for CERB as well

And for others who still need help, including post secondary students and businesses worried about commercial rent, we’ll have more to say to you very soon.”

Wage Boost for Essential Workers

On topping up wages for Essential Workers, PM Justin Trudeau said:

“Our government will work with the provinces and territories to boost wages for essential workers who are making under $2,500 a month, like those in our long-term care facilities”

The government website is being updated with the new qualifications, for full details and to apply click below:

Apply for CERB

Applications for the Canada Emergency Business Account starts TODAY!

/in , , , /by

The new Canada Emergency Business Account (CEBA) is available starting TODAY and is available through major banking institutions: TD, Scotiabank, BMO, CIBC, RBC, National Bank, HSBC and Canadian Western Bank.

The CEBA will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced until December 31, 2022. Up to $10,000 of that amount will be eligible for loan forgiveness if $30,000 is fully repaid on or before December 31, 2022.

Eligibility

Organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019

How do I apply?

Prior to applying, please make sure you have this information readily available:

  • Canada Revenue Agency Business Number (BN 15 digits)

  • 2019 T4 Summary of Remuneration Paid (T4SUM)

Apply online at the financial institution your business banks with:

Rules changed to allow more struggling business owners access to CERB, Wage Subsidy. Summer jobs program increased to 100%

/in , , , /by

Help for Small/Medium Businesses & Entrepreneurs – 75% wage subsidy, $40,000 interest-free loan & more

/in , , /by

March 27, 2019 – Prime Minister Justin Trudeau announced programs and measures focused on helping Small & Medium Sized Businesses and Entrepreneurs cope with the economic consequences caused by the COVID-19 pandemic.

“With these new measures, our hope is that employers being pushed to laying off people due to COVID-19 will think again,” Trudeau said. “And for those of you who have already had to lay off workers, we hope you will re-hire them.”

Wage Subsidy increased to 75%

The Prime Minister has been under pressure from the small business community to boost the wage subsidy beyond the 10% initially announced to help keep people employed. Today, Mr. Trudeau announced the government will increase the wage subsidy from 10% to 75% to help keep employees on the payroll. This increase will be backdated to Sunday, March 15th.

“It is clear we have to do more, much more so we are bringing that percentage up to 75 per cent for qualifying businesses”

– Prime Minister Justin Trudeau

Canada Emergency Business Account (CEBA)

The CEBA will allow banks to offer $40,000 loans that will be interest-free for the 1st year which will be guaranteed by the government. If you meet certain conditions, $10,000 of the loan can be forgivable.

“To help you bridge to better times, we are launching the Canada Emergency Business Account. With this new measure banks will soon offer $40,000 which will be guaranteed by the government”

Defer GST, HST, Duty

The government will defer GST & HST payments, as well as duty and taxes owed on imports until June 2020.

“This is the equivalent of giving $30-billion of interest free loans to businesses”

Bank of Canada Rate Cut

Bank of Canada slashed its key overnight interest rate to 0.25%.

Full details and qualification requirements will be available on Monday.