The Government of Ontario has established certain subsidies and assistance programs for Ontario businesses in response to the economic hardships caused by the outbreak of COVID-19 and to alleviate the pressures that businesses and employers are experiencing.
Sotos LLP will continue to monitor government announcements and we will update and circulate this Informational Circular as warranted.
- Ontario Small Business Support Grant
Applications are open for the new Ontario Small Business Support Grant (“OSBS”). The OSBS is available for small businesses that have been required to close or significantly restrict services under the province-wide shutdown effective December 26, 2020.
The grant starts at $10,000 for all eligible businesses, and provides all eligible businesses with funding to a maximum of $20,000 to cover decreased revenue expected as a result of the province-wide shutdown.
Businesses can use the support however they choose (for example, to pay employee wages or to assist in maintaining their inventory).
Applicants must demonstrate that they experienced a revenue decline of at least 20% when comparing their monthly revenue in April 2020 to that of April 2019. The government has explained that this time period was selected because it reflects the impact of the public health measures taken in the spring of 2020, and as such, provides a representation of the possible impact of the these measures on small businesses. Businesses that were established since April 2019 are also eligible provided they meet the other eligibility criteria. In order to receive OSBS, small businesses must meet the following criteria:
- be required to close or restrict services subject to the province-wide shutdown that went into effect on December 26 2020;
- have fewer than 100 employees at the enterprise level; and
- have a Canada Revenue Agency (“CRA”) business number.
Businesses are not eligible if they were already required to close prior to the modified Stage 2 measures that were introduced on October 10, 2020, or if they are essential businesses permitted to operate with capacity restrictions (e.g., discount and big box stores selling groceries, supermarkets, grocery stores, convenience stores, pharmacies, and beer, wine and liquor stores).
On March 24, 2021 the government announced a second round of support through the OSBS. Businesses that were determined as eligible for the first round will automatically be entitled to a second payment in the same amount as the first payment.
- Rebates for PPE and Property Taxes
The Government of Ontario is providing businesses a one time grant of up to $1,000 to assist with the cost of personal protection equipment (“PPE”). To be eligible, businesses must have between 2 and 19 employees and be in one of the following sectors: retail, accommodation and food services, repair and maintenance, personal and laundry services, gyms and yoga studios, and arts, entertainment and recreation.
Applicants are required to submit receipts or proof of costs for PPE purchased since March 17, 2020. This includes: gloves, gowns, face shields, eye protection, masks, sanitizer, sanitizing wipes, thermometers, temperature monitors or cameras, physical changes (including the installation of hand sanitizer stations and plexiglass dividers) and signs to guide or inform customers and employees.
Eligible businesses may also apply for rebates of municipal and education property taxes. Funding will cover the entire length of time that regionally targeted public health restrictions are in place.
In order to apply, applicants will need to provide general business information (for example, CRA business number) and their banking information (for example, banking institution, account number, branch code). Further, they will need to submit proof of costs – meaning their property tax bills (or proof of costs associated with property taxes).
- COVID-19 Energy Assistance Program for Small Business
The COVID-19 Energy Assistance Program for Small Business (“CEAP”) provides a one-time, on-bill credit to eligible small business and registered charity customers. Small business and registered charity customers may be eligible for up to $1,500 in support to be paid towards their electricity, unit sub-meter provider (“USMP”) or natural gas bills (both or separately).
In order to be eligible for CEAP, small businesses and registered charities must have an active account with an electricity distributor, USMP or a natural gas distributor, and the applicant’s account must meet certain usage criteria. The applicant must also have a registered business number or charitable registration number for the small business or registered charity operating out of the premises. Further, the applicant must have overdue amounts owing from one or more electricity or gas bills since March 17, 2020. 
Funding for CEAP is limited, and utilities are expected to process applications in the order in which they are received. As such, submitting an application for CEAP does not guarantee funding. Applicants who applied and received CEAP support in 2020 can apply for the increased funding amount. Applicants must apply through their utility provider.
- Pausing Commercial Evictions
The Government of Ontario has temporarily banned evictions for tenants who have been approved for the Canada Emergency Rent Subsidy (“CERS”). Any such tenant (with proof of approval) will be protected from eviction for a 12-week period from the date of approval. If a tenant re-applies for a new CERS payment, the 12-week ban is effectively restarted from the date of the new CERS approval.
Tenants must provide their landlord with proof of each new approval. The last possible date a CERS-approved tenant could be protected from eviction is April 22, 2022.
- Employer Health Tax relief
The Employer Health Tax (“EHT”) is a payroll tax on remuneration paid to employees and former employees. Due to the outbreak of COVID-19, the Government of Ontario has increased the EHT exemption from $490,000 to $1,000,000 permanently.
To be eligible for the tax exemption, employers must be “eligible employers” as defined under the EHT Act. As such, employers who have a municipal representative on their board of directors, or who are under the control of any level of government, are generally not eligible employers. Further, employers normally cannot claim the exemption if their Ontario payroll for the year (including the payroll of any associated employers) is over $5 million (except for eligible employers).
- Regional Opportunities Investment Tax Credit
The Regional Opportunities Investment Tax Credit is a 10% refundable corporate income tax credit for capital investments. The tax credit has a cap of $500,000 and is available for expenditures in excess of $50,000. It is available to Canadian-controlled private corporations who make qualifying investments that became available for use on or after March 25, 2020. Examples include expenditures for constructing, renovating, or acquiring eligible commercial and industrial buildings and other assets in designated Ontario regions.
At Sotos LLP, our team of experts has been advising businesses in the automotive, restaurant, grocery, personal, home and professional services, hotel, retail and cannabis sectors as they face challenging economic and financial issues relating to the current pandemic. Please contact us if you wish to discuss your eligibility for any of the government assistance programs, and to determine an effective approach to combatting business challenges caused by the outbreak of COVID-19.
Read More:Ontario – Covid-19 Assistance | Lexology