by Ryan Robertson

by Jason Rosen

CRA Articles, News, Pandemic Response, TaxApril 23, 20200 comments

Canada and COVID-19: Rent Relief and Loans for Businesses

Last week the Canadian government took an additional step towards helping small business owners overcome the impact that COVID 19 is having on their enterprises. The latest assistance program announced by the federal government is being billed as a, “Rent Assistance Program for Businesses”. To ensure that the program will have a positive impact on as many Canadian business owners as possible, the announcement of the new scheme was accompanied by attestations from the Prime Minister that the federal government would be easing restrictions that may presently hinder small and medium sized businesses from accessing loans. Please see our tax blog for additional information on last week’s other Emergency Response updates.

Rent Relief – The Canada Emergency Commercial Rent Assistance Program

The Canada Emergency Commercial Rent Assistance Program will assist eligible small businesses with their rent payments for April, May, and June. The program will be administered in conjunction with the provinces and territories, who are typically responsible for overseeing the administration of commercial property in their respective locales. The crux of the program involves providing loans to commercial property loans, some of these will be forgivable in the future, to enable them to reduce or forgo the rent they charge to small businesses.

Tenants who have their rent deferred by their landlord may still input a tax credit even if they have not paid their rent. This makes it important for landlords to record deferrals properly, so as to make them legally binding, and thus the owner of the property will not be burdened by a GST/HST liability before they have received the rent for the property.

However, it is also worth noting that short-term accommodations to tenants will likely not impact a landlord’s GST/HST liability as the federal government has deferred the due date for any GST/HST owing until the 30^th of June 2020.

Forgivable Loans – The Canada Emergency Business Account

In addition, there will be expanded access to the Canada Emergency Business Account. This program is aimed to provide small and medium sized companies with loans of up to $40,000 in order to assist with keeping their businesses viable during the COVID 19 crises. As an additional method of assistance, if a company can pay the remaining balance of the loan by the end of 2022, up to $10,000 of the loan may be forgiven.

To qualify for a loan under this program, the company must demonstrate that they paid between $50,000 and 1,000,000 in payroll during their 2019 fiscal year. However, as part of the expanded access programs the eligibility is being extended to companies with a 2019 payroll between $20,000 and 1,500,000.

If you have any questions about how these programs above may affect you as a business owner, or questions about applying, contact our firm for a free consultation. We are here to help! In the meantime, we will continue to keep you informed and hope you and your families remain safe and healthy in these uncertain times!

*Disclaimer

This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.