York Region Economic Strategy is committed to supporting the York Region business community during this difficult and uncertain time due to the COVID-19 pandemic. In partnership with Mentor Works, an organization with expertise in helping businesses develop plans to access government funding programs, we have planned a series of articles that can assist businesses in navigating these difficult times and build a recovery plan as the economy moves towards returning to normalcy.
**Blog updated on 05/06/2020**
Businesses across Canada and globally are experiencing severe disruptions to their operations as a result of the Covid-19 pandemic. Many businesses in York Region, home to one of Ontario’s largest business centres with over 55,000+ establishments, are experiencing unique changes to their everyday operations, employee retention and requirement needs, and restrictions to cash flow availability.
The Canadian federal government has announced its economic response plan to COVID-19, including multiple new and rapidly evolving financial support programs to help SMEs through the coronavirus pandemic. This article highlights the available federal and provincial government funding programs to help employers in York Region through these extraordinary times.
Automatic Changes that Apply to All York Businesses
Ontario Employer Health Tax Exemption
York Region businesses should consider the Ontario government’s Employer Health Tax exemption, which has increased from $490,000 to $1 million for 2020. The provincial government also announced a five‑month relief period for businesses that are currently unable to file or remit their provincial taxes on time due to COVID-19.
Learn more about the Employer Health Tax and the five-month relief period.
Defer Income Tax Payments Until August 31, 2020
A federal tax measure also allows businesses to defer income tax payments to the CRA that became owing on or after March 18, 2020 and before September 2020, until August 31, 2020. No interest or penalties will accumulate on these amounts during this period.
Learn more about the recent changes to tax payments at Canada.ca.
Electricity Rates Reduced to Off-Peak
York Region businesses, farmers, and individuals can benefit from the Ontario government’s decision to slash hydro prices to off-peak rates all day, every day. No action is required from Time-of-Use electricity consumers, as the change will happen automatically.
Avoid Layoffs by Utilizing COVID-19 Government Funding Programs
Subsidize 75% of Employee Wages for Canadian SME Employers
Employers have a responsibility to their payroll employees and, in many cases, are unable to continue employing them if their duties are impacted by COVID-19. With all businesses affected in some way by COVID-19, the federal government has introduced the Canada Emergency Wage Subsidy (CEWS) to provide payroll support equal to up to 75% of remuneration paid to employees (with a weekly cap of $847 per employee) over 90 days, retroactive to March 15. Employers are required to make their best attempts at topping up employees’ salaries to 100% of pre-COVID-19 rates. Eligible York employers include individuals, taxable corporations, partnerships, non-profit organizations, and registered charities that have seen a drop of at least 15% of their revenue in March 2020 and 30% in the following months. Learn more about the CEWS program on Canada.ca.
- This is a viable option for employers who have seen a drop in revenue due to COVID-19. See this chart for CEWS revenue reduction claiming periods.
- Apply for the Canada Emergency Wage Subsidy Program (CEWS) through the CRA’s My Business Account portal.
For the latest information on CEWS, please refer to Canada.ca.
Employers Ineligible for CEWS Can Apply For the 10% Temporary Wage Subsidy Program (TWS)
Up to a 10% wage subsidy applicable to businesses not eligible for the CEWS 75% wage subsidy listed above. Eligible York employers include individuals (excluding trusts), partnerships, non-profit organizations, registered charities, or Canadian-controlled private corporations (including cooperative corporations). You must have had an existing business number and payroll program account with the CRA on March 18, 2020 and pay salary, wages, bonuses, or other remuneration to an eligible employee. Learn more about the TWS program on canada.ca.
- This is a viable option for employers that are not eligible for CEWS but may still be eligible for a partial wage subsidy.
- Apply for the Temporary Wage Subsidy through the CRA’s My Business Account portal.
The Work-Sharing (WS) Program Lets Employees Collect EI While Sharing the Available Workload
Like other businesses across Canada, some York Region employers are experiencing a temporary decrease in business activity due to COVID-19, and the federal government’s Work-Sharing (WS) program aims to assist with this disturbance. The program provides EI benefits to employees who agree to reduce their working hours and share the available work with other coworkers, allowing their employer time to recover.
Businesses that meet all the following criteria are eligible:
- A year-round business in Canada in operation for at least two years;
- Demonstrate that the shortage of work is temporary and beyond their control, and is not a cyclical/recurring slowdown;
- Demonstrate a recent decrease in business activity of approximately 10%;
- A private business, a publicly held company, or a not-for-profit organization; and
- Have at least 2 employees in the work-sharing unit.
- Additional details on eligibility criteria are available on canada.ca.
Businesses are not eligible if their reduced activity is due to any of the following:
- A labour dispute;
- A seasonal shortage of work;
- A pre-existing and/or recurring production slowdown; or
- A recent increase in the size of the workforce.
- Additional details on ineligibility are available on Canada.ca.
The process and complexity of the Work-Sharing program will depend heavily on your business’ size and payroll structure. For more information, please refer to the full list of eligibility criteria, including employee eligibility, on Canada.ca.
Funding Support for Manufacturers and Exporters
In addition to the COVID-19 stimulus funds, York Region’s 2,600+ manufacturing employers can also tap into proactive government funding programs to cover payroll costs. By incorporating their upcoming strategic investments into funding proposals, businesses throughout the region can access funding grants for key activities such as R&D and training.
If you’re a manufacturing or exporting businesses located in York Region and has not utilized FedDev Ontario training funds in the last 24 months, you may be eligible to have 25-50% of your internal trainers’ and trainees’ payroll costs subsidized. Full eligibility and funding information is available on the Yves Landry Foundation website.
The National Research Council of Canada Industrial Research Assistance Program (NRC IRAP)
Another project-related funding program that can be leveraged to subsidize research payroll costs is NRC IRAP. IRAP can be accessed by contacting a toll-free number (1-877-994-4727) to connect with an Industrial Technology Advisor (ITA) who can identify potential research projects that the program can support direct payroll costs on, with coverage ranging from 50-75%. The program has also created an IRAP COVID-19 funding stream for research projects that meet a COVID-19 related need.
Autonomous Vehicle R&D activities
If you are one of the 100+ auto parts manufacturing and autotech companies located in York Region, you may be eligible to receive payroll support for autonomous vehicle R&D through the Autonomous Vehicle Innovation Network (AVIN) program. Your business will need to create a structured R&D project as part of the application process; however, a portion of that research labour would be subsidized if your funding proposal is approved.
Proactive Planning for Economic Recovery
Preparing Canadian Exporters for Pent-Up Demand in Q4 2020
As a preventative measure to help limit the spread of COVID-19, many countries have closed their borders, and as a result the will impact York Region’s manufacturing exporters . It is strongly recommended that York manufacturers and exporters focus on cash management in the short-term while preparing for the pent-up demand that economists are predicting will surface in Q4 of 2020.
This chart from the BDC illustrates the steps Canadian exporters should take to prepare for the increase in business activity during Q4 2020.
The CanExport program provides support to eligible Canadian exporters for marketing and expansion activities with grants for up to 75% of eligible costs associated with export marketing projects to a maximum $75,000 per application.
At the time of this writing, the CanExport program is seeing major changes as a direct result of COVID-19.
Help Laid-Off Employees Navigate the Income Support Process
The Ontario government’s precautionary Covid-19 shutdown of many businesses who were not listed as an essential workplace and did not have the option to work remotely, will require some of these employees to use one of the various income support programs offered by the federal government.
Help your employees navigate this process by simplifying it for them. All EI claims have been moved to the $2,000 a month Canada Emergency Response Benefit (CERB) regardless of what applicants would have made on EI. CERB has been updated to include part-time workers and a wage boost for essential workers. More details can be found on Canada.ca. This infographic on various income support options for Canadians summarizes Canadians income support options.
Funding Programs to Help Others in the Fight Against COVID-19
Help Provide Personal Protective Equipment to Frontline Healthcare Professionals
Healthcare professionals on the frontlines fighting against COVID-19 are facing a shortage in the personal protective gear and sanitary equipment needed to protect them. Because of this, the National Research Council Industrial Research Assistance Program (NRC IRAP) has been tasked by the federal government to work with businesses to address Public Health Agency of Canada and Health Canada needs, including:
- Personal protective equipment
- Diagnostic and testing
- Disease-tracking technology
Applications to receive funding for innovative solutions in supplying the required items can be submitted through: nrc.canada.ca.