A Non-Profit Organization in Canada's Guide to COVID-19 Governmental Supports and Programs
This article outlines the measures undertaken by the Federal and Provincial governments in response to the economic impact of the COVID-19 pandemic, and the employment supports available to Canada’s charitable sector. It will be updated as new information on these measures emerge, and if any new supports for charities are provided by our governments.
Note: Although we’ve tried our best to provide complete and accurate information, this article does not constitute legal advice. We suggest that you consult with a professional in this area for the most reliable advice specific to your organization.
- Delaying Annual General Meetings
- Extension of T3010 filing deadline to December 31, 2020
- Deferral of GST/HST payments and corporate income tax payments
- GST/HST Remittances
- Business income tax
- Employer-focussed wage programs
- Extension of the Work Sharing Program
- Temporary Wage Subsidy for Employers
- The Canada Emergency Wage Subsidy
- Wage Subsidy For Canada Summer Jobs Program
- Program for employees unable to work and those unemployed
- Canadian Emergency Response Benefit
- Business programs
- Canada Emergency Business Account (Business Credit)
- SME Loan and Guarantee Program (Business Credit)
- Canada Emergency Commercial Rent Assistance
- Additional Federal Supports by Sector
- Province-specific relief programs
Delaying Annual General Meetings
Federally incorporated charities and nonprofits unable to hold virtual AGMS, or those that do not wish to, can submit an online form to Corporations Canada to delay their AGM beyond the normally required date.
For more information, please consult this link: http://corporationscanada.ic.gc.ca/eic/site/cd-dgc.nsf/frm-eng/JCRE-BNGKQY
T3010 Filing Deferral
The Charities Directorate is extending the T3010 Form filing deadline to December 31, 2020, for all charities with a Registered Charity Information Return due between March 18, 2020, and December 31, 2020. This date is regardless of your charity’s normal filing deadline.
Note: Individual taxpayers are allowed to postpone any tax payments until after August 31st.
For more information, please consult this link: https://www.canada.ca/en/services/taxes/charities.html
GST/HST Remittances Deferral
Available to all charities that charge GST/HST for programs, services or products, the Government of Canada will allow all charities that charge Goods and Services Tax / Harmonized Sales Tax (GST/HST) to defer their payments until June 30, 2020.
For more information, please consult this link: https://www.canada.ca/en/department-finance/economic-response-plan/covid19-businesses.html#deferral_sales_tax_remittance_customs_duty_payments
Business Income Tax Deferral
The Government of Canada is allowing the deferral, until August 31, 2020, of the payment of any income tax amounts between March 18th and September 1st, 2020. This is of particular interest to social enterprises operating within the charitable and non-profit sectors and applies to any eligible tax balances due, including instalments. It’s important to note that, during this period, no interest or penalties will accumulate on the amounts owed.
For more information, please consult this link: https://www.canada.ca/en/department-finance/economic-response-plan/covid19-businesses.html#more_time_to_pay_their_income_taxes
Work-Sharing Program Extension
Available to all businesses, and including charities, the Government of Canada is extending the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks.
About the Work-Sharing Program:
This program is a three-party agreement involving employers, employees and Service Canada. It is designed to curb employee layoffs when normal business activity is temporarily interrupted through no direct control of the employer. This measure is intended to provide support to EI-eligible employees and their ability to earn income, as they work a temporarily reduced work week while their employer recovers.
The Work-Sharing program is offered to workers who agree to reduce their normal working hours and agree to share the available work over a specified period of time.
For more information, please consult this link: https://www.canada.ca/en/employment-social-development/services/work-sharing/eligibility.html
Temporary (10 percent) Wage Subsidy for Employers
On March 18, 2020, Prime Minister Trudeau announced a temporary 10 percent wage subsidy. This wage subsidy allows organizations, including charities, to obtain up to 10% of payroll costs incurred between March 18th, 2020 and June 19th, 2020. The maximum claim amount is $1,375 for each employee, and up to $25,000 per employer.
There is no application through the CRA – you may simply reduce your Income-tax remittance by 10% of the remuneration paid in that period.
For more information, please consult this link: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html
The Canada Emergency Wage Subsidy
The Government of Canada has introduced the new Canada Emergency Wage Subsidy (CEWS) measure. Retroactive to March 15, 2020 and until August 29, 2020, it is intended to cover 75 percent of salaries for qualifying businesses, including charities of all sizes. The maximum amount subsidized is $847 per week per active or furloughed employee, with no cap on how much a single employer can receive. Approximately the first $58,700 earned by the employee is eligible for the wage subsidy.
As well, the Government is proposing that employers eligible for the CEWS be entitled to receive a 100-per-cent refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan.
Please note that there is no specific indication stating that your organization is obliged to top up to the employee’s full salary, but is encouraged.
The CEWS would be available to organizations who saw a 15% drop in revenue in March and a 30% drop in revenue in April and May.
When you apply for this subsidy, you will be required to justify and provide proof of the decline in revenue. Once an employer is found eligible for a specific period, the employer automatically qualifies for the next period.
On May 15, 2020, Finance Minister Morneau announced the approval of regulations to extend the eligibility for the CEWS to include groups such as Registered Canadian Amateur Athletic Associations (“RCAAAs”), Registered Journalism Organizations (“RJOs”), private colleges, and private schools. As well, the government will consult with key business and labour representatives soon on potential adjustments to the CEWS, including the 30 percent revenue decline threshold, and propose new legislation to clarify how the CEWS will be available with regard to seasonal employees, amalgamated corporations and trusts.
How to calculate the revenue loss:
- To measure their revenue loss, it is proposed that all employers have the flexibility to compare their revenue of March, April and May 2020 to that of the same month of 2019, or to an average of their revenue earned in January and February 2020 — whichever is more advantageous.
- Charities and non-profit organizations can choose to either include or exclude revenue from the government when calculating their revenues — whichever is more advantageous.
- Organizations can calculate their revenues using either accrual or cash accounting — whichever is more advantageous.
- Organizations that qualify for the wage subsidy will be able to furlough staff to keep them on payroll, if there is a lack of work for them to do, and receive a full refund of employer contributions towards CPP, EI, QPP and other such programs.
CEWS vs. the Temporary (10 percent) Wage Subsidy for Employers
It can be confusing for some charities to differentiate between the CEWS and the 10 percent wage subsidy. If you are eligible for both subsidies with the same period of time, note that any benefit from the 10 percent wage subsidy on your employee’s salary will reduce the amount available to be claimed under the CEWS in that same period.
Eligible employers are able to apply for the CEWS through the Canada Revenue Agency’s My Business Account portal as of Monday, April 27, 2020.
For more information, please consult these links:
Wage Subsidy For Canada Summer Jobs Program
The federal government announced temporary changes to the Canada Summer Jobs program that will help employers hire summer staff and provide young Canadians access to the jobs they need during this unprecedented time. This program will help create up to 70,000 jobs for youth between 15 and 30 years of age. The changes to the Canada Summer Jobs program will help small businesses hire and keep the workers they need so they can continue to deliver essential services.
The temporary changes to the program for this year include:
- an increase to the wage subsidy, so that private and public sector employers can also receive up to 100 percent of the provincial or territorial minimum hourly wage for each employee
- an extension to the end date for employment to February 28, 2021
- allowing employers to adapt their projects and job activities to support essential services
- allowing employers to hire staff on a part-time basis
For more information, please consult this link: https://pm.gc.ca/en/news/news-releases/2020/04/08/changes-canada-summer-jobs-program-help-businesses-and-young
Canadian Emergency Response Benefit
To support employees impacted by COVID-19, the Canada Emergency Response Benefit (CERB) will provide $2,000 per month for a period of up to six months. On June 16th, Mr. Trudeau announced that the CERB would be extended an additional 8 weeks, or two months beyond the initial 4 month period. Paid every four weeks, this measure is retroactive to March 15th, 2020, and will last until October 3rd, 2020. While this support is employee-facing, knowledge of the benefit is relevant to charities whose operations have been directly affected by the pandemic. Individuals are eligible for the CERB if:
- Residing in Canada, who are at least 15 years old;
- They have lost their job;
- Who have stopped working because of COVID-19 and have not voluntarily quit their job, or are eligible for EI regular or sickness benefits;
- Are still employed, but have lost income due to COVID-19 disruptions;
- Are sick, quarantined, or caring for someone sick due to COVID-19, and missing work; or,
- They are a working parent staying home to care for children due to closures/sickness;
- Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
- Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment or self-employment income.
It is important to note the following:
- An employer would not be eligible to claim the Canada Emergency Wage Subsidy (CEWS) for salary paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the CERB.
- Employers who are not eligible for the CEWS would still be able to furlough employees who will receive up to $2,000 a month.
- Applicants need to access Service Canada’s website to submit their online EI application.
- Eligible individuals will receive their funds as soon as 3 days (for electronic deposit), and up to 10 days (by mail), after they apply.
- Eligible applicants do not need a doctor’s note to apply for these benefits.
- Includes individuals making up to $1,000 a month, seasonal workers, contractors, and people with Employment Insurance that has recently run out (since January 1st 2020).
For more information, please consult this link: https://www.canada.ca/en/department-finance/economic-response-plan.html
Canada Emergency Business Account – Business Credit
The Government of Canada has introduced the new Canada Emergency Business Account in an effort to ensure that small businesses, including charities, have access to funds in these challenging times. This Business Account will be implemented by the major financial institutions across Canada and in cooperation with Export Development Canada.
All charities with 2019 payrolls between $20,000 and $1.5 million in total will be eligible for interest-free loans of up to $40,000 to help cover their operating costs during a period where their revenues have been temporarily reduced. 25% of the loan (up to $10,000) will be forgiven if the loan is repaid by December 31, 2022. To be eligible, charities must generate a portion of its revenue from the sales of goods or services.
To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need a business operating account at a participating financial institution, a Canada Revenue Agency business number, to have filed a 2018 or 2019 tax return, and eligible non-deferrable expenses between $40,000 and $1.5 million.
To apply, these loans are to be arranged through your regular financial institution.
For more information, please consult this link: https://ceba-cuec.ca/
SME Loan and Guarantee Program (Business Credit)
Primarily for eligible social enterprises, this Co-Lending Program is managed by the Business Development Bank of Canada (BDC) but is arranged by the former’s financial institution.
You can obtain business credit amounts up to $6.25 million. BDC’s portion of this program is up to $5 million maximum per loan.
For more information, please consult this link: https://www.canada.ca/en/department-finance/news/2020/03/additional-support-for-canadian-businesses-from-the-economic-impact-of-covid-19.html#_New_Loan_Programs
Canada Emergency Commercial Rent Assistance
This program will lower rent by 75% for small businesses that have been affected by COVID-19.
- The program will provide forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.
- The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible tenants’ rent by at least 75% for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25% of the rent.
- Impacted tenants are organizations paying less than $50,000 per month in rent (per location) and who have temporarily ceased operations or have experienced at least a 70% drop in pre-COVID-19 revenues.
- Charities and nonprofits can choose whether to include or exclude revenues from governments when calculating their revenue drop.
- Tenants’ consolidated financial statements (in the case of multiple locations) must show annual revenues less than $20 million
Applications opened on May 25, 2020.
For more information, please consult this link: https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business
Federal business supports by sector
Prime Minister Justin Trudeau announced on April 21, 2020 that $350 million in emergency funds for community groups and national charities that help seniors, the homeless and others made more vulnerable by the pandemic. The funds will support some small independent organizations and national organizations such as the United Way and Red Cross.
Nonprofit organizations can apply through the Red Cross portal.
For more information, please consult this link: https://pm.gc.ca/en/news/news-releases/2020/04/21/prime-minister-announces-further-support-help-canadians-need
Support for food banks and local food organizations
National, regional, and local food banks and local food organizations across Canada will receive $100 million in funding through the Government of Canada’s Local Food Infrastructure Fund, including:
- $50 million to Food Banks Canada
- $20 million divided evenly between Salvation Army, Second Harvest, Community Food Centres Canada, and Breakfast Club of Canada
- $30 million for local-level organizations who serve people experiencing food insecurity
For more information, please consult this link: https://pm.gc.ca/en/news/news-releases/2020/04/03/prime-minister-announces-support-food-banks-and-local-food
Support for local organizations supporting Canadian seniors
The Government of Canada will contribute $9 million through United Way Canada for local organizations to support practical services to Canadian seniors. The funding for seniors will be delivered through the New Horizons for Seniors Program.
For more information, please consult this link: https://pm.gc.ca/en/news/news-releases/2020/03/29/prime-minister-announces-support-vulnerable-canadians-affected-covid
Support for Women’s shelters and sexual assault centres
The Government is supporting women and children fleeing violence by providing up to $50 million to women’s shelters and sexual assault centres, including facilities in Indigenous communities, to help with their capacity to manage or prevent an outbreak in their facilities.
The government is currently working with provincial and territorial counterparts and stakeholders to ensure organizations receive the funding as soon as possible.
For more information, please consult this link: https://cfc-swc.gc.ca/fun-fin/shelters-refuges-en.html
Emergency Support Fund for Cultural, Heritage and Sport Organizations
A total of up to $500 million has been set aside to help alleviate the financial pressures of affected organizations. Canadian Heritage has made funds available to partner organizations, including the Canada Council for the Arts, the Canada Media Fund, FACTOR, Musicaction, and Telefim Canada, to start distributing funds to organizations affected by the COVID-19 pandemic in the cultural, heritage and sport sectors.
For more information, please consult this link: https://www.canada.ca/en/canadian-heritage/news/2020/05/emergency-support-fund-for-cultural-heritage-and-sport-organizations-next-steps-to-support-the-industry-impacted-by-the-global-covid-19-pandemic.html
Surplus Food Purchase Program
Launching a first-ever Surplus Food Purchase Program with an initial $50 million fund designed to help redistribute existing and unsold inventories, which could include products such as potatoes and poultry, to local food organizations who are serving vulnerable Canadians.
For more information, please consult this link: https://pm.gc.ca/en/news/news-releases/2020/05/05/supporting-canadas-farmers-food-businesses-and-food-supply
Regional Relief and Recovery Fund
Charities and nonprofits in some parts of the country will be able to get money to cover operating costs through the Regional Relief and Recovery Fund. The regional development agencies (plus Community Futures) are administering the Fund, and each development agency is putting its own rules on the money. “Non-commercial” nonprofits can apply to Canada Economic Development for Quebec Regions for non repayable money, while it looks like charities and non-profits cannot apply at all to FedDev Ontario, including for non repayable capital.
For more information, please consult this link: https://www.ic.gc.ca/eic/site/icgc.nsf/eng/h_07682.html
Province-specific relief programs
There are a number of additional tax relief measures instituted by Provincial governments to support their businesses.