8 Top Support Measures Provided to Tenants, Self-employed individuals, and Small Business Owners

It’s been a roller coaster ride since last week. New coronavirus cases are announced everyday.

It feels like government policies are changing by the minute.

March break has been extended. Canada is shutting down the border. New death toll announced in Italy. New measures are imposed to get ahead of the curve.

Everyone is on edge every day, waiting and hoping some better news will come out.

Many real estate investors have been asked by tenants to provide help. Many of us, as self-employed individuals and small business owners, are also looking for financial help from our government.

As a fellow landlord myself, we need to know all the government support available to help our tenants through these difficult times. I would pay extra attention to points 1, 2 and 3 to assist your tenants.

If you are off work and staying at home, unable to earn any income, I would pay attention to points 1 through 6 below.

As a fellow small business owner, pay attention to all the measures available, including working with the government to reduce working hours of your employees. Now that everyone could be going through tough times, business owners could think of making the health and safety of employees a priority. This may include regular health and safety audits, health and safety training for the employees in the workplace, risk assessment, etc. This could provide motivation to the employees as well as make them ready for any challenging situation at the workplace.

1. Increased GST credit & increased annual Canada Child Benefit payment

The government is going to provide a one-time special payment via GST credit system by early May 2020.

On average, this will be close to $400 for single individuals who qualify and $600 for families who qualify.

It is worthwhile to mention that for a single individual without kids, you need to earn less than $46,649 to be entitled to GST credit. For a single parent with 2 kids, you need to make less than $55,509 to qualify for any GST credit.

For married couples with no children, you need to make a net family income of less than $49K to qualify.

This increased GST credit is targeting people who are earning low and modest income.

The Government is also proposing to increase the maximum Canada Child Benefit amounts by $300 per child for qualifying parents.

Both support measures are non-taxable.

1. Income support for workers & parents

Some short-term support was announced for workers & parents:

i. Emergency Care Benefit providing up to $900 bi-weekly for up to 15 weeks to:

• Workers and self-employed individuals who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
• Workers and self-employed individuals who are taking care of elderly parents but can’t access the EI sickness benefits.
• Parents with children who require care due to school closures and are unable to earn employment income.

Application is open April 1st. You can apply via CRA MyAccount online or My Service Canada Account or a dedicated phone line.

If you don’t have a CRA MyAccount or My Service Canada account, it is a good time to look into registering one.

ii. EI Sickness Benefits will no longer have a one week waiting period, measure starts immediately

ii. Waiving the requirement to provide medical certificate to access EI sickness benefits

As with the longer-term support for workers, the government is providing an Emergency Support Benefit (again apply through CRA MyAccount) for people who are not eligible for EI and who are facing unemployment.

For workers who agree to reduce their normal work hours, the CRA is implementing an EI Work Sharing Program to supplement these workers’ income. The support will be extended to reduced work hours agreement to 76 weeks. Details to come as to how to qualify for it.

3. Temporary interest-free moratorium on repayment of Canada student loans

For taxpayers and tenants who are repaying their student loan, this 6 month interest free moratorium can help ease the financial stress during this difficult time.

4. Extended filing deadline for individuals

Income tax filing deadline for individual taxpayers is April 30. This deadline has been extended to June 1, 2020.

However, if you want to continue to receive GST tax credit benefits or the Canada Child Benefit, you would still be required to file on time by April 30 so as to avoid delay in receiving the benefit.

It is worthwhile mentioning that the tax deadline is extended for self-employed individuals whose income tax filing deadline is June 15. For real estate agents and other self-employed individuals, you are still required to file your return by June 15.

5. Income tax payable due between March 18 and August 31, 2020 can be deferred

Individual taxpayers and businesses are eligible to defer income tax payable and instalments that are owing on or after March 18, and before September 2020, without interest and penalties during this period.

If you have income tax payable that’s accrued before March 18, 2020, your balance owing will still be subject to interest and potentially penalty as well.

6. HST payable is NOT deferred, but CRA will NOT start any post-assessment audit for GST/HST and Income Tax

It is worthwhile mentioning that the deferral is NOT available for any HST owing based on news released today.

If you are a real estate agent and you owe HST, you’re still required to pay your HST owing by April 30.

If you are a small business that charges HST on the sale of your product/services, you are still required to pay your HST balance and instalment on time.

Only relief that we are getting is that the CRA will not start any post assessment for HST audits or income tax audits in the next 4 weeks. They will also temporarily suspend current audits for a period of time.

7. Salary subsidy to help with small business owners

Before the pandemic, there wasn’t too much of stress regarding personal health of employees any further than the basic employee insurance cover. Given the state of things though, a lot of companies may have found it beneficial to insure their top-most employees with personalised insurance policies, like the ones provided by keypersoninsurance.com or similar firms, in case they were to fall ill and were unable to help the business function with its smoothness and regularity, especially due to the pandemic. Any company can only function at its best when all of the people involved are happy and healthy. Productivity is usually at its peak when employee morale is high, and everyone is physically, mentally, and emotionally well. Although not mandatory, companies would often carry out employee health screenings (https://www.edenhealth.com/blog/employee-health-screening/) and regular check ups to take stock of everyone’s health and find ways to improve it as well. Now with the pandemic, it has become more important than ever. This, however, can also be a source of the financial toll on small business owners and employers who have tried to ensure safety and fairness to all their employees in this economically challenging time. Incidentally, a temporary wage subsidy has been made available by the government, for small employers for a period of 3 months. The subsidy will be equal to 10% of remuneration paid during this 3-month period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.

If you have an employee earning $60,000 annual salary, which is equivalent to a $5K monthly salary, as an employer, you can qualify to get a subsidy for $500 for March, $500 for April and $375 for May.

To take advantage of this subsidy, you can reduce remittances of income tax withheld on the employees’ remuneration.

Using the same example, if you have only one employee that is earning $60K gross salary, $5K monthly salary, you’re required to remit $1,552.50 to CRA normally on a monthly basis. With this subsidy, you simply need to remit $1,052.50 by the regular remittance deadline.

To qualify for this benefit, corporations must be eligible for the small business deduction, or non-profit organizations and charities.

From the limited information released, it does not seem like the subsidy is available for small business owners who are sole proprietors or partnerships.

8. Credit can be available to small business owners

As some of you know, we are renovating our new office space, financed by Business Development Bank of Canada (BDC), a crown corporation owned by the government.

I am also anxious to see how this Business Credit Availability Program (BCAP) is going to deploy $10 billion additional support to small and medium sized businesses. Hopefully, this will pave the way to good business for Canadians, and things can slowly start to go back to the pace it was at before. A recovering economy may be the signs of improvement in the country that all citizens are looking for.

Minimum information is available at this point as to how small business owners can qualify.

As a real estate investor and small business owner myself, I welcome all the support we get from the government. Many of these measures have great intention but may not be able to include everyone who’s in need.

Until next time, stay safe and stay a safe distance too!

Cherry Chan, CPA, CA

Your Real Estate Accountant