Updated April 2021
With the onset of COVID-19, many small business owners and self-employed workers are struggling financially to make ends meet. You might be wondering, how do I pay my expenses with no income? How can I keep my business going? How can I provide for myself and my loved ones?
Thankfully, the federal government has been rolling out financial support programs for entrepreneurs and self-employed workers to help weather economic challenges due to COVID-19. We’ve compiled all the currently available financial resources for small businesses and self-employed individuals, including what you need to be eligible and how to apply.
Note: this article is accurate up to the date listed above. Due to the shifting nature of COVID-19, please visit the Government of Canada COVID-19 home page for the most up-to-date information.
Financial Support for Self-Employed Individuals
The Canada Recovery Benefit (CRB) is designed to provide income support to both self-employed and employed individuals who are not eligible to receive EI benefits. Eligible individuals can receive $1,000 ($900 after taxes are withheld) every two weeks for up to a maximum of 13 eligibility periods.
This program came into effect on September 27, 2020, and has eligibility periods that go until September 25, 2021. You can apply through the CRA.
The Canada Recovery Sickness Benefit (CRSB) is designed to provide income support to eligible employed and self-employed individuals who are unable to work because they are sick or need to self-isolate due to COVID-19.
Those eligible for CRSB can receive $500 ($450 after taxes withheld) for a 1-week period, up to total of 4 weeks between September 27, 2020 and September 25, 2021. If you are unable to return to work after the first period, you will have to reapply for the second week.
If you are unable to work because you need to care for a child under the age of 12 or a family remember who requires supervised care, you might be eligible for Canada Recovery Caregiving Benefit (CRCB).
Through this program a family could receive up to 26 weeks of $500 ($450 after taxes withheld) in income. However, you are required to reapply each week that the support is required.
While it’s not directly related to your business activity, it’s possible that you might be eligible for mortgage payment deferral. Contact your lender directly, as many financial institutions are being encouraged to offer clients payment deferral, loan re-amortization, and other special payment arrangements.
To qualify for CERB, your self-employment earnings must be at least $5,000 in 2019 or during the last 12 month period preceding your application. To access this benefit, you must be able to show you have absolutely no income for a minimum period of 14 consecutive days within each four-week period.
If you are already on EI, or have applied for EI before March 15, you do not qualify for CERB. You will need to wait until your EI benefits expire to be eligible for CERB. If you applied for EI after March 15, your application will automatically be converted into an application for CERB.
Applications for CERB opened on April 6, 2020, and are staggered based on birth month. The schedule for applying can be found on the Government of Canada website.
Defer Payment on Income Tax, Student Loans, and Other Expenses
To support small business owners and self-employed individuals, the Canadian government has announced a deferral program to help reduce expenses for Canadians during COVID-19. Under this program, you may be able to defer the following taxes and payments:
- Personal and Corporate Tax: As part of a tax extension program, you can defer payments up to September 1, 2020, but you must file personal and corporate tax by June 1, 2020.
- GST/HST payments: Payment can be deferred up to June 30, 2020, but you still have to file your GST/HST return by your respective due date.
- Canada student loan payments: As of March 30, 2020, a six month interest-free moratorium has been applied on all Canada Student Loans, with no payment required or interest accrued.
Financial Aid for Small Businesses
Small businesses are in dire need of COVID-19 relief, especially with self-isolation and social distancing in place across Canada. The federal government has stepped in to provide several different financial resources for entrepreneurs.
This subsidy applies to every business of any size, which experiences a 30% decline in revenue compared to the same period last year, including small businesses, non-profits, and charities. You can apply for the subsidy for up to 12 weeks, and it covers 75% of employee wages on the first $58,700, with a maximum of $847 per week per employee.
To qualify for this subsidy, you must be able to prove you are doing everything you can as an employer to pay the additional 25% of all wages for your employees. You must also show there has been a 30% decline in revenue compared to the same month last year.
As an employer, you will need to reapply for this subsidy each month (March, April, and May 2020). Your employees cannot collect Employment Insurance Benefits (EI) or the Canada Emergency Response Benefit (CERB) if they are already receiving this subsidy.
If you do not qualify for the Emergency Wage Subsidy, you may be able to qualify for the previously announced Temporary Wage Subsidy, which provides 10% of remuneration paid to employees from March 18th to before June 20th, 2020, to a maximum of $1,375 per employee and $25,000 per employer. More information about this financial support can be found on the Government of Canada website.
How Can I Apply?
Small business owners can apply for the Emergency Wage Subsidy through their CRA My Business Account. Make sure your business is enrolled in direct deposit with the CRA to ensure payments are not delayed. Many financial institutions are now offering Direct Deposit services so you can get your subsidy payments faster, so check with your bank about this option.
Once funds become available, they are paid as a reimbursement to the employer, not a deduction of payroll remittances. Full details for the Emergency Wage Subsidy can be found on the Government of Canada website.