You are a business owner amid COVID-19. Now what?
The vast majority of our clients at Lift Legal are small and medium sized business owners in Edmonton and St. Albert. We are devastated to see the impact that the COVID-19 crisis is having on almost every single one of them, including all of the other fantastic small businesses that we love to support around St. Albert and Edmonton. However, if there is one thing we know for sure, it is that small business owners are resilient and creative. These are unprecedented times and it will be important for business owners to be aware of all resources and potential opportunities available to them as they navigate through the impact of COVID-19.
Something that almost all small business owners can take advantage of right now is Canada’s Economic Response Plan. This plan affords Canadian business owners’ opportunities that can help mitigate some of the financial impact created by the pandemic
What does the first phase of Canada’s Economic Response Plan include?
- $27.4 billion in support for both workers and businesses
- $55 billion in tax deferral until September 2020
- $10 billion-plus business credit availability program for all sizes of business
- $500 billion credit and liquidity support
Benefits from increased credit
The $10 billion business credit availability program will enable businesses to find credit solutions with the Business Development Bank of Canada and Economic Development Canada in coordination with private-sector lenders. Credit solutions for individual businesses will be increased for many sectors such as air transportation, tourism, oil and gas and agri-food.
Business owners with families
- The maximum annual CCB payment will be increased by $300 per child as part of the May payment for the 2019-20 benefit year.
- The Emergency Care Benefit will address the impact on those without access to sick leave or EI who must be at home during this time. It will provide individuals with $2,000 per month for a maximum of 16 weeks. It is available for all workers including self-employed business owners who are sick but do not qualify for EI sickness benefits; who are caring for sick family members with COVID-19 but do not qualify for EI sickness benefits; and all working parents that are at home without pay because of school closures or children who are sick. Application for the benefit will begin in April 2020.
Subsidy for employee salaries
A $25,000 maximum subsidy per employer or $1,375 maximum subsidy per employee, has been made available to business owners. This temporary subsidy reduces salaries paid to employees by 10 percent over a three-month period. These benefits are received by reducing the payment of income tax usually withheld on an employee’s pay
Business insurance
- Standard business insurance will not usually cover interruptions caused by something like a pandemic. However, specialized contingent business interruption coverage, supply chain disruption coverage or stand-alone business interruption coverage could be triggered by the announcement of a pandemic by the World Health Organization.
- Business owners should review their insurance policies to determine if there is any potential for coverage during this time.
How has the Canada Revenue Agency (CRA) responded?
Any amount of income tax (such as balances due or instalments) that becomes owing between March 18, 2020, and September 2020 will be deferred by the CRA. No interest or penalties during this period will accumulate for these amounts. The CRA will suspend audit interactions temporarily for the next four weeks. Additionally, the CRA liaison officer service is now available by phone for small businesses to understand tax obligations, filing, payment deadlines and COVID-19 related dealings.
Provincial Assistance
Small, medium and large private sector employers can defer WCB premium payments until 2021. For small and medium-sized businesses, the government will cover 50% of the 2020 premium when it is due in 2021. Large employers will have their 2020 WCB premium payments deferred until 2021, at which time their premiums will be due. Employers who have already paid WCB premiums in 2020 are eligible for a rebate or credit.
Other tips to get through the COVID-19 crisis as a small business owner
- Other tips to get through the COVID-19 crisis as a small business owner
- Take advantage of all programs and benefits offered by your provincial and federal governments.
- Communicate with key partners such as suppliers to prepare for the impacts their situation will bring to your business and explore alternative solutions.
- Communicate clearly and frequently with your team to ensure they are productive and feel secure. Almost every small business owner has a list of tasks that they wish they could accomplish but never have the chance to. If you are able to keep some (or all) of your team employed during this time, ensure that everyone is busy accomplishing these tasks so that you are better positioned than ever for success when the crisis subsides.
- Actively consider credit solutions and work with your bank in anticipation of cashflow issues. A business always has more options if it is able to demonstrate that it is not yet under financial pressure.
- Monitor metrics that provide advance warnings about the health of your business such as online traffic.
- Potentially reallocate resources to reduce costs aligned with forecasting and budget adjustments.
- Be creative and flexible. Think of ways that this crisis could actually create opportunity for your business or how your business model can be changed to adapt to this new reality.
- Support other small businesses. We are all in this together and the more that we work to help each other weather this storm, the shorter the storm will be.
How can Lift Legal help?
Lift Legal is continuing to operate during this challenging time so that we can be here to support existing and new business clients. We pride ourselves on being practical, flexible and affordable. If you have an idea or an opportunity during this time and think you could benefit from legal advice please don’t hesitate to reach out to us. We will work with you to come up with an affordable budget for legal services and would be pleased to provide you with a complimentary initial phone consultation. We can be reached at (780) 809-2225 or liftme@liftlegal.ca.
