COVID-19 Issues Update – Indigenous Business Supports

The Government of Canada has announced up to $306.8 million in funding to help small and medium-sized Indigenous businesses, and to support the 59 Aboriginal Financial Institutions that offer financing to these businesses. It is estimated that these measures will help 6,000 Indigenous-owned businesses. It was acknowledged that many Indigenous businesses are being disproportionately affected by the economic downturn of the pandemic, especially smaller companies and those that do not have access to financing from larger banks.

The funding will allow for short-term, interest-free loans and non-repayable contributions through Aboriginal Financial Institutions, which offer financing and business support services to First Nations, Inuit, and Métis businesses. This funding will be administered by the National Aboriginal Capital Corporations Association and the Metis capital corporations along with Indigenous Services Canada. Specific information on how funding will be divided and administered amongst Indigenous groups and regions is not yet available.

In addition to the Indigenous-specific supports mentioned above, mainstream business supports will also be available to Indigenous businesses.

Canada Emergency Wage Subsidy (CEWS)

This subsidy covers 75% of an employee’s wages (up to $847 per week) for employers of all sizes and across all sectors who have suffered a drop in gross revenues of at least 15% in March, and 30% in April and May. The program will be in place for a 12-week period, from March 15 to June 6, 2020.

Employers eligible for the CEWS are entitled to receive a 100% refund for certain employer contributions to Employment Insurance and the Canada Pension Plan paid in respect of employees who are on leave with pay. For employers that are eligible for both the CEWS and the 10% Temporary Wage Subsidy, any benefit from the Temporary 10% Wage Subsidy will generally reduce the amount available to be claimed under the CEWS in that same period.

Temporary 10% Wage Subsidy

The Temporary 10% Wage Subsidy is a three-month measure that will allow eligible employers to reduce the amount of payroll deduction required to be remitted to the Canada Revenue Agency (CRA). You are an eligible employer if you:

  • are / a(n):
    • individual (excluding trusts),
    • partnership,
    • non-profit organization,
    • registered charity, or
    • Canadian-controlled private corporation (including a cooperative corporation) eligible for the small business deduction;
  • have 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.

Note: Partnerships are only eligible for the subsidy if their members consist exclusively of individuals (excluding trusts), registered charities, or Canadian-controlled private corporations eligible for the small business deduction.

Extending the Work-Sharing Program

The Government of Canada is extending the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks for employers affected by COVID-19. This measure will provide income support to employees eligible for Employment Insurance who agree to reduce their normal working hours because of developments beyond the control of their employers. Please visit this website for more information:

Deferred Payments

The Government of Canada is allowing all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that are owed on or after March 18, 2020 and before September 2020. This relief would apply to tax balances due, as well as installments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.

The Government of Canada is also allowing businesses, including self-employed individuals, to defer until June 30, 2020 payments of the GST/HST, as well as customs duty owing on their imports. Any GST/HST payment that becomes owing from March 27 until the end of May can be deferred until the end of June. For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May.