Blog PostApril 30, 2020 - Educational
Condos and COVID-19 - Government Assistance Programs
Over the last several weeks, the Federal government has made several announcements regarding financial assistance programs that have been made available to corporations and individuals. You are probably wondering whether your condominium corporation is eligible for any of these. The answer is – maybe.
Most programs available during this time are geared towards employers. Condominiums can apply for the following assistance programs only if they have employees, such as a superintendent:
10% Temporary Wage Subsidy for Employers
If your condo has an employee on payroll, you could be eligible for the 10% wage subsidy. This allows the corporation to reduce the amount of payroll deductions up to 10% from March 18, 2020 to June 19, 2020, up to $1,375 for each employee to a maximum of $25,000 total per employer.
There is no subsidy available for wages paid after June 20th, however if you have not fully used the subsidy it can be carried forward to subsequent remittance periods.
75% Wage Subsidy (CEWS)
Unfortunately, this will not apply to condominium corporations as one of the eligibility requirements is that the corporation must have experienced a loss in revenue. Condominium corporations should be keeping their revenue streams consistent in order to maintain operations.
Canada Emergency Business Account (CEBA)
This program allows the condominium to receive an interest free loan, up to $40,000 to help cover costs during the pandemic. Repaying the balance on or before December 31, 2022 will result in loan forgiveness of 25% (up to $10,000). This can be applied for through any banking institution that the corporation has a general or reserve fund bank account.
There are some possible complications:
- This is only available for condominiums who can demonstrate they paid over $20,000 in total payroll in the 2019 calendar year.
- If your management company consolidates the bank accounts for all the properties they manage, this may create difficulties. The loan will only be deposited to a bank account once, therefore if several corporations’ funds are consolidated, they may face an issue if trying to apply for multiple loans.
- This is still a loan, and therefore your corporation will have to either obtain or have an existing borrowing bylaw in place before making the application.
- If a corporation already has a loan with their financial institution, it is suggested that you review the terms and conditions of the existing loan, as it may not allow for further financing agreements without written consent.
- One condition is that the borrower must be a Canadian operating business in operation as of March 1, 2020. There is some ambiguity in the wording, which could result in there being some risk your corporation might not qualify for this loan. It is recommended you seek advice from your corporation’s accountant.
If you are unsure as to whether your condominium is eligible for any of the above programs, please don’t hesitate to reach out to firstname.lastname@example.org.
A full list of resources for employers can be found on our RLB website: https://www.rlb.ca/employers-guide-covid-19/
At RLB, People and Condos Count!
This article was originally published by RLB Chartered Professional Accountants on April 28th, 2020: https://www.rlb.ca/condos-and-covid-19-government-assistance-programs/
Our thanks to Shalon Seebach for submitting this article! If you have a blog article you would like to submit get started here!