Highlights from the Fall Economic Statement: continued support for retailers

The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released Supporting Canadians and Fighting COVID-19: Fall Economic Statement 2020, which included some additional relief measures for retailers in Canada. RCC will put a full summary of prudent points that retailers should know that will be shared in the coming days, but in the meantime, here are some key highlights.

Bolstering current programs

Canada Emergency Wage Subsidy (CEWS)

The government is proposing to increase the maximum wage subsidy rate to 75% for the period beginning December 20, 2020 and to extend this rate until March 13, 2021. The subsidy has already been extended until June 2021.

Canada Emergency Rent Subsidy (CERS)

The government is proposing to extend the current subsidy rates of the CERS for an additional three periods. This means a base subsidy rate of up to 65% will be available on eligible expenses until March 13, 2021. With the 25% Lockdown Support also being extended, retailers may be eligible for a subsidy of up to 90% of their eligible expenses.

Canadian Emergency Business Account (CEBA)

The CEBA program will soon be expanded, allowing qualifying businesses to access an additional interest-free $20,000 loan, in situations where there is need. Half of this additional amount, up to $10,000, would be forgivable if the loan is repaid by December 31, 2022. The deadline to apply for a CEBA loan has been extended to March 31, 2021.

Additional measures to help the most in need retailers

Highly Affected Sectors Credit Availability Program (HASCAP)

The government will work with financial institutions in the near term to create the Highly Affected Sectors Credit Availability Program (HASCAP) – a new program for the hardest hit businesses. This stream would offer 100% government-guaranteed financing for heavily impacted businesses and provide low-interest loans of up to $1 million over extended terms, up to ten years.

New tax measures

Tax-free PPE

The government is proposing to remove the Goods and Services Tax/Harmonized Sales Tax (GST/HST) from the purchases of face masks and face shields, effective from December 7, 2020. This would make PPE more affordable for Canadians until the use of face coverings is no longer broadly recommended.

Working from Home

To simplify the process for both taxpayers and businesses, the CRA will allow employees working from home in 2020 due to COVID-19 with modest expenses to claim up to $400, based on the amount of time working from home, without the need to track detailed expenses, and will generally not request that people provide a signed form from their employers. Further detail will be communicated by the CRA in the coming weeks

Taxing Goods Supplied through Fulfillment Warehouses

The government is proposing to apply the GST/HST on all sales of goods that are located in Canadian fulfillment warehouses. Under this proposal, the GST/HST will be required to be collected and remitted by either the foreign-based vendor or the digital platform that facilitates the sale.

Hiring students

Enhancing Canada Summer Jobs funding

To support employers through a period of economic recovery, the government intends to support up to 120,000 job placements through Canada Summer Jobs in 2021-22. To this end, the government proposes to provide approximately $447.5 million in new investments in the program next year.

Good news for home improvement retailers

Home Energy Retrofits

The government is proposing to provide $2.6 billion over 7 years to help homeowners improve their home energy efficiency by providing grants of up to $5,000 to help homeowners make energy-efficient improvements to their homes, up to one million free EnerGuide energy assessments, and support to recruit and train EnerGuide energy auditors to meet increased demand.