Nova Scotia businesses & COVID-19 pandemic

By Patrick O'Neil

Updated Wednesday, April 15th, 2020 

Nova Scotia businesses & COVID-19 pandemic:

The last few weeks have been challenging, to say the least. As jurisdictions introduce greater measures to combat COVID-19, we drift further from our sense of normalcy. Self-isolation, social distancing, quarantine – once rather foreign concepts – have now become common in everyday conversations. The impact has been significant, for employees and their families, as well as the business community.

On Sunday, March 22, the Nova Scotia government introduced the concept of “essential” and “non-essential” businesses in the context of measures designed to slow the spread of the virus. Essential businesses, for example, grocery stores, gas stations, construction sites, criminal justice system, health care facilities and pharmacies, are exempt from the maximum five-person gathering threshold communicated by the province. In contrast, non-essential businesses, while permitted to remain open, must adhere to the social distancing guidelines (at least two-metre or six-foot distance) and ensure that proper cleaning regimens are implemented. Importantly, the provincial government also introduced penalties – up to $7,500 per day – for businesses that fail to comply with the social distancing requirements.

In the past week or so, both the federal and provincial governments have introduced programs as we collectively try and weather the economic storm that is a byproduct of the attempts to ‘flatten the curve.’ These announcements included various assistance options available to businesses. While this is welcome news, several business owners – tasked with scrambling to make contingency plans to lessen the devastating blow associated with the curve-flattening efforts, while at the same time coordinating childcare and looking after their families – are experiencing information overload.

As a result, below is a summary of some of the programs of particular interest to small and medium-sized businesses are outlined below (the level of government and date of announcement is in brackets):

 

Credit

  • Business Credit Availability program - $10 billion in support for businesses experiencing cash flow challenges (via Business Development Bank of Canada/Export Development Canada);

- An additional $12.5 billion was announced to help businesses (Can – March 27);

  • Changes to the Small Business Loan Guarantee Program to make it easier for businesses to access additional credit (up to $500,000) and for some businesses that otherwise may not qualify, the government will guarantee the first $100,000 (NS – March 22);
  • Deferring payments in relation to Nova Scotia business loans and business-related fees until June 30 (NS – March 22);
  • Rent Deferral Program: landlords will be asked to sign rent deferral agreements with respect to small business tenants who were forced to shut down due to the Nova Scotia government’s public health order. The provincial government will guarantee up to $5,000 per month for three months, payable to the landlord at the end of the lease in the event that the business does not continue once the restrictions are lifted or is otherwise unable to make payment of the rent deferred under the rent deferral agreement (NS – March 27);
  • Bank of Canada interest rate further cut to 0.25% (March 27);
  • Announcement of the Canadian Emergency Business Account – a $40,000 loan guaranteed by the government for qualifying businesses, with the possibility of $10,000 of this loan being forgivable, provided that the business meet certain conditions (Can – March 27);
  • Additional credit available for farmers:

- Deferring payments for eligible farmers with outstanding Advance Payments Program, as those with payments due on or before April 30 will be given an additional six months to repay the loan. In addition, eligible farmers may apply for an additional $100,000 interest-free loan for 2020-2021 (Can – March 23);

- Making $5 billion available to the agricultural sector through Farm Credit Canada (Can – Mar 23);

 

Tax Relief

  • Deferral of income tax that becomes owing between March 18 and August 31, 2020, without interest or penalty during this time. This deferral applies to both tax balances due and installments (Can – Mar 18);
  • No GST/HST or Income Tax audits will be initiated over the next four weeks (Can – March 18);
  • Deferral of GST/HST payments, as well as duties and taxes owed on imports, until June 30 (Can – March 27);

 

Additional Assistance Measures

  • Work Sharing Program extended from 38 weeks to 76 weeks. Businesses can apply for a work-sharing agreement as a method of temporarily reducing work schedules of employees, as employees are supplemented with income support from Employment Insurance. There are eligibility requirements for both employers and employees, and the application must be submitted at least 30 days before implementing the program (Can – March 18);
  • Temporary foreign workers are still able to enter Canada (subject to the 14 day isolation period upon arrival), to ensure minimal disruption to those industries that depend upon labour supplied by temporary foreign workers (for example, the agri-food industry) (Can – March 20);
  • Waiver of worker’s compensation premiums until June 30 (NS – March 22);
  • Quicker payment for small businesses on Nova Scotia government contracts (5 days rather than 30 days) (NS – March 22).
  • Introduction of a $2,000 taxable benefit called the Canadian Emergency Response Benefit (“CERB”) (sometime in April), available to workers who do not qualify for Employment Insurance sickness benefits (including self-employed workers) impacted by COVID-19 by (Can – March 26):

- Being quarantined or sick with COVID-19;

- Taking care of a family member who is sick with COVID-19;

- Being parents who must care for or supervise children as a result of school/daycare closures

  • Temporary Wage Subsidy: eligible employers can apply to reduce the amount of payroll deductions that are required to be remitted to the Canada Revenue Agency. The subsidy is 10% of remuneration paid to each eligible employee (maximum of $1,375 per employee and $25,000 per employer). The subsidy is calculated prior to remitting these amounts to the Canada Revenue Agency (Can – March 25)
  • Canadian Emergency Wage Subsidy (CEWS) Eligible small businesses – including corporations that are eligible for the small business deduction, non-profits, and charities – can apply for a wage subsidy of up to 75% of wages paid, backdated to Sunday, March 15 (Can – March 27);
  • Worker Emergency Bridge Fund – the province announced a $20 million fund designed to assist individuals who do not qualify for employment insurance, including the self-employed. The fund will provide a one-time payment of $1,000 to bridge the gap until the CERB (discussed above) is distributed (NS – Apr 2);
  • Small Business Impact Grant - $20 million dollar program available to eligible small businesses (for employers with two hundred employees or less) to receive a grant of 15% of revenue from sales from either April 2019 or February, 2020 (up to $5,000), which the recipient can use at its discretion, for any purpose (NS – Apr 2).

 

As this situation continues to unfold rapidly, additional measures will undoubtedly be introduced to assist Nova Scotia businesses in the days and weeks to come. Efforts will be made to revise the above as and when new measures become available.

This article is for information only and is not intended to be legal advice. If you have any questions or would like further information, you should consult a lawyer.