Government Assistance Update

07 Jan 2021

The Federal and Ontario governments have recently released various updates on existing and new government assistance programs including the following:

Federal:

  • Increased the Canada Emergency Wage Subsidy ("CEWS") top-up rate from 25% to 35%
  • Indicated the deadline to apply for CEWS
  • Introduced Form PD27 to report the 10% Temporary Wage Subsidy ("TWS") claimed
  • New lockdown support through the Canada Emergency Rent Subsidy ("CERS")

Ontario:

  • Introduced the New Ontario Small Business Support Grant ("OSBSG")

CEWS Updates and Deadline

In November 2020, the Department of Finance announced the new updates to the current CEWS program.

For Periods 8 to 10, the base subsidy percentage (BSP) and top-up subsidy percentage (TUSP) would be extended through Periods 9 and 10. This means the BSP rate will be 0.8 * revenue decline and the TUSP will be 1.25 * (revenue decline -50%) throughout Periods 9 to 10. The maximum CEWS is 65% of the eligible remuneration paid, up to the maximum of $847 per person.

The government also indicated that the deadline to apply for the CEWS will be the later of January 31, 2021, or 180 days after the end of the qualifying periods.

New Form PD27 for the TWS

New Form PD27 needs to be completed and submitted to the Canada Revenue Agency ("CRA") if you are eligible to take advantage of the TWS and:

  • you already reduced your remittances
  • you intend to reduce your remittances (the forms will help you calculate your eligible TWS amount)
  • you claimed the CEWS and, as a result, need to confirm on Form PD27 the amount of the TWS you are taking advantage of.

The form can be submitted online through My Business Account, by mail, or by fax. There is currently no specific deadline indicated for the form, however, it should be submitted as soon as possible in order to avoid any payroll discrepancy issues.

CERS Updates

Aside from the base rent subsidy of up to 65%, eligible properties may also be entitled to 25% of additional lockdown support.

The base subsidy rate applies to a maximum of $75,000 in eligible expenses per location and an overall maximum of $300,000 in expenses for you and any affiliated entities per claim period.

If you must close or cease certain activities at one or more of your locations under a public health order for one week or longer, you may be eligible for lockdown support of up to 25% of eligible expenses per affected location for the days the order was in place.

Claim periods 1-3 (September 27 to December 19, 2020) are currently open to applications. Additional information for upcoming claim periods will be available shortly.

New OSBSG

The government is announcing the new OSBSG, which will provide a minimum of $10,000 and up to $20,000 to help small business owners during this challenging period.

Small businesses required to close or restrict services under the Provincewide Shutdown will be able to apply for this one-time grant.

Eligible small businesses include those that:

  • Are required to close or significantly restrict services due to the Provincewide Shutdown being imposed across the province effective 12:01 a.m. on December 26
  • Have fewer than 100 employees at the enterprise level
  • Have experienced a minimum of 20 per cent revenue decline in April 2020 compared to April 2019.

Starting at $10,000 for all eligible businesses, the grant will provide businesses with dollar for dollar funding to a maximum of $20,000 to help cover decreased revenue expected as a result of the Provincewide Shutdown.

For small businesses not in operation in April 2019 or April 2020, eligibility criteria will be announced in January 2021.

Businesses that are not eligible include those that were actually required to close prior to the introduction of modified Stage 2 measures, and essential businesses permitted to operate with capacity restrictions (e.g., discount and big box stores selling groceries, supermarkets, grocery stores, convenience stores, pharmacies, and beer, wine and liquor stores).

Further details, including how to apply for the Ontario Small Business Support Grant, will be announced in January 2021.

If you have any questions regarding the information above, please feel free to contact us.