Weekly Digest – 21 October 2020
Welcome back to our Weekly Digest. We hope you and your family are safe and doing well.
Lately, economists have been talking about a “K-shaped” recovery from the current recession. As this article in The Conversation explains, this kind of recovery happens when different parts of the economy recover at different rates. White-collar workers who can more easily work remotely may have an easier and faster path to recovery than blue-collar and service workers who must be physically present to do their jobs.
Moving forward is the only option we have to get through this crisis. Read on for this week’s updates and some ideas that will help us all move forward.
Canada- U.S. Border Closure Extended to November 21
The Canada-U.S. border closure was originally set to expire on October 21, but a government announcement this week says the closure will be extended until at least November 21. Prime Minister Justin Trudeau is also warning Canadians not to fly to the U.S. because they are putting themselves and their loved ones at risk, although the U.S. allows Canadians to fly to the country for leisure travel.
British Columbia Announced Second Wave of COVID-19
British Columbia is in the second wave of the COVID-19 pandemic, as the Provincial Health Officer Dr. Bonnie Henry confirmed 499 new cases and two more deaths over the weekend. There have been more than 150 cases per day since Friday, with the largest single day total at 174 from Sunday to Monday. However, Henry assured that there is no exponential growth in the number of cases.
Wholesale Sales Grew in August, But at a Slower Pace
In a recent report by Statistics Canada, it was shown that Canadian wholesale sales increased by 0.3% to $65.7 billion in August, marking its fourth consecutive month of improvement. However, the growth is at a much slower pace compared to previous months.
Four of seven subsectors edged up, as sales in the building material and supplies subsector rose 7% to hit a record high of $9.8 billion.
Reopening Guides for Businesses to Operate Safely
As parts of Canada start to reopen their economies, COVID-19 outbreaks have been witnessed in workplaces. As a responsible business owner, you must do your part to avoid risks and protect not only your family and employees, but also the community.
The Canadian government has provided a comprehensive guide on how businesses and employees can stay safe while operating amid the COVID-19 pandemic. Alternatively, you may also contact us for guidance.
Small Business Week Continues This Week
The Better Business Bureau is encouraging Canadians to shop small and support local businesses, as the Small Business Week which started on October 18 and runs through to October 24 continues this week.
Here are some tips on how consumers can support small businesses:
- Research the shops nearest to you.
- Get involved by signing up for email alerts.
- Connect with businesses on social media.
- Invite your friends and family.
- Do some gift shopping.
- Share your experience on social media and share reviews on BBB.org.
Now, more than ever, it is important that we make an effort to support each other in these difficult times. If your business is struggling, we can help you pivot and face these challenges head on. Contact us today so we can help you recover.
Survey: Business Sentiment Improves, But Remains Weak
In a survey by the Bank of Canada, it was shown that business sentiment has improved across the country as COVID-19 restrictions were eased. However, sentiment still remains weak and the pace of recovery is expected to remain sluggish.
A third of 100 firms surveyed responded that they do not expect sales to return to pre-pandemic levels within the next 12 months. Businesses also said their sales prospects are limited by weak demand and health guidelines.
Meanwhile, in a separate KPMG survey, 31% of small- and medium-sized business owners in Canada worry they won’t have enough liquidity or access to financing to stay afloat amid a second wave of COVID-19. Furthermore, 54% responded that their immediate focus is on survival.
If you need some expert advice on how your business can make it through the COVID-19 crisis, get in touch with us today and let us work out a plan.
Ottawa Announces New Rent Relief Program
As a second wave of COVID-19 hits parts of Canada, the federal government will provide targeted aid, including an overhauled rent relief program, which the government said will now allow businesses to apply directly for relief through the Canada Revenue Agency until June 2021.
The new rent subsidy will support businesses, charities and non-profits that have suffered revenue drops by subsidizing a percentage of their expenses on a sliding scale, up to a maximum of 65% of eligible expenses, until December 19.
The “top-up” emergency rent subsidy of 25%, in addition to the 65% subsidy, will be available to organizations temporarily shut down by a mandatory public health order.
If you need assistance for your application or would like to consider other options available to your business, don’t hesitate to get in touch with us.
Transition from CERB to Employment Insurance Program
The Canada Emergency Response Benefit (CERB) ends when you’ve received 28 weeks of benefits or on October 3, 2020, whichever comes first. For those who applied through the Canada Revenue Agency, the last four-week period for the CERB was August 30, 2020 through September 26, 2020. However, you can still apply for the CERB retroactively through CRA.
If you still need financial assistance after your CERB ends, there are some temporary changes to the Employment Insurance program to help you access such benefits.
These changes, which will be in effect for 1 year, include the following:
- A minimum unemployment rate of 13.1% applies to all regions across Canada starting August 9, 2020
- You only need 120 insured hours to qualify for benefits because you’ll receive a one-time credit of: 300 insured hours if you’re applying for regular benefits; 480 insured hours if you’re applying for sickness, maternity, parental or caregiving benefits
- You’ll receive at least $500 per week before taxes, or $300 per week before taxes for extended parental benefits but you could receive more
- If you’re a fisher, they will look at the earnings from your 2018, 2019 and 2020 summer or winter seasons to determine your benefit rate and establish your claim for the same season
- If you received the Canada Emergency Response Benefit (CERB), the 52-week period to accumulate insured hours will be extended
- A medical certificate is not required for EI claims beginning March 15, 2020, or later
Canada Opens Applications for Three New Benefits
The Canadian government has opened the application process for the three new benefits that are intended to help people who lost their income because of COVID-19.
The Canada Revenue Agency has opened the applications on the My Account section of their website for the Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), and the Canada Recovery Caregiving Benefit (CRCB).
Canada Recovery Benefit (CRB)
The Canada Recovery Benefit is for employed and self-employed individuals directly affected by COVID-19 who can’t get Employment Insurance benefits.
If you are eligible for the CRB, you can receive $1,000 ($900 after taxes withheld) for a 2-week period. If your situation continues past 2 weeks, you will need to apply again. You may apply up to a total of 13 eligibility periods (26 weeks) between September 27, 2020 and September 25, 2021.
Canada Recovery Sickness Benefit (CRSB)
The Canada Recovery Sickness Benefit (CRSB) is for employed and self-employed individuals who are unable to work because they’re sick, need to self-isolate due to COVID-19, or have an underlying health condition that puts them at greater risk of getting COVID-19.
If you’re eligible for the CRSB, you can receive $500 ($450 after taxes withheld) for a 1-week period. If your situation continues past 1 week, you will need to apply again. You may apply up to a total of 2 weeks between September 27, 2020 and September 25, 2021.
Canada Recovery Caregiving Benefit (CRCB)
The Canada Recovery Caregiving Benefit (CRCB) is for employed and self-employed individuals who are unable to work because they must care for their child under 12 years old or a family member who needs supervised care.
If you’re eligible for the CRCB, your household can receive $500 ($450 after taxes withheld) for each 1-week period. If your situation continues past 1 week, you will need to apply again. You may apply up to a total of 26 weeks between September 27, 2020 and September 25, 2021.
If you need help with your application, get in touch with us so we can assist you. You may also book a consultation with us so we can explore other financial assistance options you may be eligible for.
10% Temporary Wage Subsidy for Employers
The 10% Temporary Wage Subsidy for Employers (TWS) is a 3-month measure that allows eligible employers to reduce the amount of payroll deductions they need to remit to the Canada Revenue Agency (CRA).
The subsidy is equal to 10% of the remuneration you pay from March 18 to June 19, 2020, up to $1,375 for each eligible employee. The maximum total is $25,000 for each eligible employer.
If you need help in applying for this wage subsidy and other types of government assistance you may be eligible for, feel free to drop us a message.
New Canada United Small Business Relief Fund
The Canada United Small Business Relief Fund brings together financial institutions and business associations to support small businesses affected by COVID-19.
Starting August 31, the fund provides up to $5,000 in funding toward recovery efforts such as buying personal protective equipment, renovating physical spaces, or developing e-commerce capabilities.
This new funding is being managed by the Ontario Chamber of Commerce on behalf of the national Chamber network.
Transforming Economic Challenges Into Opportunities
Since early this year, global economies have faced unprecedented challenges due to the COVID-19 crisis. Now, many of the pandemic-ridden countries are experiencing their first recession in decades.
Governments focused on driving economic recovery through business support and cutting of tax rates. Besides these government-backed schemes, here are additional opportunities that you can consider for your business to overcome the current challenges:
- Review your business and revisit contracts which can potentially be renegotiated for a better deal.
- Consolidate your debts to be able to take advantage of growth opportunities.
- Acquire a like-minded business or consider partnerships and joint venture opportunities.
- Upskill your team during less busy times.
- Innovate and automate your processes. This is the time to explore new revenue streams such as online sales.
- Restructure your business when you see fit.
- Check your expenses, cut down on unessential costs, and outsource if it will lead to cost-savings.
- Slower business activity means you have more time in your hands than normal. Spend your time knowing more about your target market and revamp your marketing.
If you need some guidance in doing all these things, flick us a message so we can work out a plan and share our expert advice tailored specifically to your business.
Get in touch
Contact us if you have any questions or want to discuss your next steps for your business.