With the unpredictability of the economy due to the COVID-19 pandemic, the federal government has come out with many changing programs and subsidies to help. It is important you are aware of these programs and their updates to determine if they are right for your farm.
Canada Emergency Business Account
The CEBA program is aimed at supporting businesses, such as your farm, by providing financing for expenses that cannot be avoided or deferred. The application deadline for CEBA has been shifted to March 31 and the support amount is being increased to $60,000 from $40,000.
This loan is interest-free and half of the additional $20,000 would be forgivable if repaid by Dec. 31, 2022. This means you can have a total of $20,000 forgiven if you take the entire $60,000 loan.
The government stated that “eligible businesses facing financial hardship as a result of the COVID-19 pandemic” can access the additional amount. Ensure you closely read the attestation form you are required to sign to apply for this loan to ensure you are meeting the criteria.
Canada Emergency Wage Subsidy
The CEWS subsidy is intended for those who pay employee wages. This subsidy will allow you to be able to re-hire farmhands, help prevent having to lay off employees in the future and assist your return to normal operations.
This subsidy has been extended to June 2021. Currently, this subsidy will cover up to 65 per cent of your wages if criteria are met. The amount of subsidy will vary depending on the revenue drop you experience in each period claimed.
Ten percent Temporary Wage Subsidy
In addition to the CEWS program, there was a 10 percent temporary wage subsidy, which provided relief regarding payroll deductions that are remitted to the Canada Revenue Agency.
There is a new mandatory reporting form (PD27) that must be submitted to take advantage of this subsidy. This may be used if you reduced your remittances in the year or want to receive a refund for the subsidy when filing T4s.
If you have not filed your PD27 at this time, make sure you do so as soon as possible.
Canada Emergency Rent Subsidy
The CERS is designed to help cover part of your commercial rent or property expenses if you have had a decrease in revenues.
The types of items that are considered “rent” include:
- Commercial rent (land zoned commercial).
- Property taxes (including municipal taxes).
- Property insurance.
- Interest on commercial mortgages (subject to limits) for a qualifying property.
Programs and subsidies are constantly being reviewed based on how the economy is responding to COVID-19. Ensure that you are communicating with your advisers frequently to stay informed about the changes to each program or subsidy.
Colin Miller is a chartered accountant and partner with KPMG’s tax practice in Lethbridge. Contact: firstname.lastname@example.org. He would like to thank Riley Honess and Mackenzie Gal of KPMG for their assistance with writing this article.