Immediate Funds

Updated April 16,2020 – to reflect the changes in the qualifying amounts related to the Canada Emergency Business Account program

Capital preservation is a primary concern for any association leader at the moment. For this reason crisis funding opportunities for small business and not-for-profits have been made available by the federal government.  For example:

You can defer your taxes

Available Now – to any organization that remits GST/HST

1. 1. The federal government will allow tax payers to defer their sales taxes (GST/HST) until June. Still file them on time, but defer the payment until June 30.
   2. Defer your income taxes until the end of August.

You can apply for the 10% Temporary Wage Subsidy

Available Now – to any organization with payroll

1. 1. https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html
   2. Immediate relief is available under Canada’s COVID-19 Economic Response Plan. This is fairly simple to obtain if you still have payroll. Calculate 10% of your gross payroll for the period and reduce your remittance to CRA by that amount.
   3. The subsidy is equal to 10% of the remuneration you pay from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee to a maximum of $25,000 total per employer. For pay periods which bridge the March and June dates, calculate carefully.
   4. These funds are not due back to the government but are taxable. For accounting purposes, you can either include it as a line item under revenue or reduce your expense. Talk with your accountant about the best way to treat it.
   5. Depending on your payroll provider you may have to formally inform them that you are claiming the deduction, or they will withhold the usual draw and remit all to the CRA.

You can apply for the 75% Canada Emergency Wage Subsidy

Available Now – to any organization with payroll

1. 1. The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week.
   2. An alternative is that this program will cover 100% of up to 75% of previous earnings if the employee is furloughed. This allows employers to hold onto staff they would have, or have dismissed.
   3. To qualify for this program you need to suffer an earnings decline of 30% year over year. As the program develops the qualifying details become clearer in order to accommodate businesses which only recently started. See the government information page for details. https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html
   4. The government is very concerned about possible abuse of this program, so there is no “double-dipping”, any benefit claimed under the 10% Temporary Wage Subsidy will be reduced from the funds available under this program.
   5. This program must be applied for at the end of each qualifying period, and at the same time there is an application to recover 100% of the employer portion of CPP & EI. This program is still in development.

Other Crisis funding opportunities for not-for-profits

Get $40,000 of emergency funding from your bank

Available Now – to any organization with payroll between $20,000 and $1,500,000

Formally know as the Canada Emergency Business Account program this is the best of the bunch for small business. The federal government, along with the chartered banks have created a loan program specifically for small business. Are you small enough? If your payroll is between $20,000 and $1,500,000 you qualify.  If your payroll is over $1.5 million, there are other programs you may qualify for.

1. 1.  The application is straight forward, usually an online link from your primary bank. You will be asked questions like:
      1. Is this bank your primary bank?
      2. Are you an operating business?
      3. Were you in operation prior to March 1, 2020?
      4. Your federal tax/business number
      5. Total employment remuneration paid as declared on your 2019 T4 Summary
   2. The loan, if approved, will be interest free until December 31, 2022. If the loan is not repaid by December 31, 2022 it will be automatically extended, without payment, until December 31, 2025. Interest at a rate of 5% per annum will be due.
   3. There are no payments permitted until after January 1, 2021 but if 75% of the debt ($30,000) is repaid by December 31, 2022, the balance ($10,000) will be forgiven.
   4. Per the requirements of the Canada Emergency Business Account Program (the “Program”), as set out by the Government of Canada, the Organization acknowledges that the funds from this loan shall only be used by the Organization to pay non-deferrable operating expenses of the Organization 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.

Now is the time to lead your organization out of the crisis. Check out our Leadership Support Program for more great ideas.