by Baldev S. Gill, Chief Executive Officer
Following the COVID-19 outbreak, all the various real estate boards have been working closely with CREA to engage in discussions with government to ensure the voices of REALTORS® are heard and government is made aware of the unique challenges facing realtors, as well as ensuring government is aware of the significant impacts of COVID-19 on their livelihoods and their day-to-day business.
Our concerted actions have resulted in the following developments.
To combat negative consequences for Canadians and the economy resulting from COVID-19, this morning the Government of Canada unveiled additional supports as outlined below, while the Bank of Canada lowered its target for the overnight rate in an unscheduled rate announcement. This is the central bank’s second emergency interest rate cut this month in an attempt to ease the cost of borrowing and cushion the economic shock that has developed due to COVID-19.
New temporary wage subsidy of 75 per cent for small and medium-sized businesses that qualify
This morning, Prime Minister Trudeau said the previously announced 10 per cent wage subsidy was not enough. Instead, the federal government will offer a 75 per cent wage subsidy for up to 3 months, (backdated to March 15) to small and medium-sized businesses.
The federal government hopes this measure will support businesses trying to keep employees on the payroll and encourage them to rehire workers who were laid off due to COVID-19.
Eligibility criteria for the wage subsidy has yet to be established, with government aiming to provide additional details on Monday. We will update members as information becomes available.
New Business Credit Availability Program to provide credit to support businesses
The federal government established a Business Credit Availability Program to provide more than $10 billon of additional support, largely targeted to small and medium-sized businesses, through the Business Development Bank of Canada and Export Development Canada. The two organizations are cooperating with private sector lenders to coordinate on credit solutions for individual businesses.
As a first step, businesses in need of credit support should contact their financial institution.
New Canada Emergency Business Account: A government-backed loan of up to $40,000 to support small businesses
New government-guaranteed interest-free loans of up to $40,000 will be available for small businesses to help cover operating costs due to temporarily reduced revenues.
The loans will be offered through financial institutions and be interest-free for the first year. Under certain conditions, up to $10,000 of these loans could be forgiven. This government measure may be helpful to brokerages trying to pay rent or manage other upcoming expenses.
The program will be implemented by eligible financial institutions in cooperation with Export Development Canada (EDC).
Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000). EDC will guarantee new operating credit and cash flow term loans that financial institutions extend to SMEs, up to $6.25 million.
Deferral of GST, HST remittances and customs duty payments:
Businesses, including self-employed individuals will be able to defer payment of GST and duties and taxes owed on imports until June 30, 2020.
The deferral applies to GST remittances for the February, March and April 2020 reporting periods for monthly filers; the January 1, 2020 through March 31, 2020 reporting period for quarterly filers; and for annual filers, the amounts collected and owing for their previous fiscal year and instalments of GST in respect of the filer’s current fiscal year.
Payment of business income tax amounts which became due on or after March 18, 2020 and before September 2020 has now been extended to September 1, 2020 (without interest or penalties).
Delayed filing of Real Estate Council of BC filing of Accountant’s Reports:
The Real Estate Council of BC (RECBC) and Office of the Superintendent of Real Estate are temporarily extending the deadlines for annual filings of Accountant’s Reports, to give real estate brokerages additional time to file their reports as they deal with the challenges of COVID-19.
This means brokerages with Accountant’s Reports due between March 1 and April 30 will now have until June 1 to file their report. Offices which fit these criteria will be notified by RECBC on the temporary filing extension.
However, this does not absolve strata management brokerages of their obligations under section 7-9 of the Rules which outline reporting requirements to clients. To ensure ongoing public protection, RECBC will continue to strategically target audit activities based on risk and may request documentation and reporting from brokerages as required.
Additional resources on the Government of Canada announcements:
- Prime Minister of Canada
- Department of Finance (Canada) Business Support for COVID-19
- Department of Finance (Canada) Support to Businesses
- Bank of Canada
For ongoing FVREB updates on COVID-19, please visit:
https://news.fvreb.bc.ca/category/member-updates/covid-19-updates/
Additional COVID-19 resources:
- Real Estate Council of BC COVID-19 Guidance for Real Estate Professionals
- Canada Revenue Agency COVID-19 page
The new measures announced today are expected to complement the Canada Emergency Response Benefit (CERB). As an update the government has said CERB will apply to contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance.
CERB will also be available to workers who are still employed but are not receiving income because of disruptions to their work situation due to COVID-19. The new benefit will be available through an online portal that is set to launch on April 6, with funds expected to flow within ten days of applying.
The Board along with other Boards, as well as BCREA and CREA are all monitoring the implementation of these programs and will continue to work together to advocate on behalf of realtors.
We expect more clarity and additional details to come in the next few days. We will continue to evaluate any further financial assistance measures announced by the federal government and provide updates to members as and when needed.