What's new for small businesses and self-employed

Covid-19 pandemic measures

In 2020, the Government of Canada introduced several temporary measures to help businesses and individuals during the COVID-19 pandemic. For more information on the measures, go to Canada's Covid-19 Economic Response Plan.

Canada Emergency Response Benefit

The Canada Emergency Response Benefit (CERB) and similar federal and provincial benefits are taxable benefits that you have to report on your income tax return for 2020. Follow the instructions on the tax slip you received, which reports the amounts paid to you. If you did not receive a slip, check My Account for the slip. For more information on the CERB, go to Canada Emergency Response Benefit.

Government assistance programs for the self employed

You may have received federal, provincial, or territorial government program assistance that was provided for self employed individuals, businesses, farmers, or fishers. You are responsible for reporting the amount of assistance received when you file your income tax return.

Government assistance income is taxable and will either be included in business, farming or fishing income or, if you elect, will reduce your business, farming or fishing expenses. You may also have received a government loan. The loan itself is not taxable. However, any part of the loan that is forgivable is taxable in the year in which the loan is received.

Examples of assistance:

Canada Emergency Wage Subsidy (CEWS) – The CEWS provides a subsidy for the eligible remuneration paid by an eligible employer, for each eligible employee. For more information on rates and maximum amounts, go to Canada Emergency Wage Subsidy.

Temporary 10% wage subsidy – This subsidy allows eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency. For more information, go to 10% Temporary wage subsidy for employers.

Mandatory Isolation Support for Temporary Foreign Workers Program (MISTFWP) – The MISTFWP provides support of $1,500, for each temporary foreign worker, to assist with the incidental costs associated with the mandatory 14 day isolation period. For more information, go to Mandatory Isolation Support for Temporary Foreign Workers Program.

Northern Business Relief Fund (NBRF) – The NBRF provides short term support, in the form of a non repayable grant, for ongoing operational costs to small  and medium sized territorial businesses impacted by economic disruptions due to COVID-19. For more information, go to About the Northern Business Relief Fund (NBRF).

For more information, go to Changes to taxes and benefits.

Proposed changes to CCA Classes 54 and 55, and creation of new CCA Class 56

On March 2, 2020, the Government of Canada proposed a temporary enhanced first-year capital cost allowance (CCA) of 100% for eligible new and used fully electric or hydrogen powered automotive equipment and vehicles that currently do not benefit from the accelerated rate provided by Classes 54 and 55. These vehicles and equipment would be included in new Class 56. In addition, the Government proposed an extension of Classes 54 and 55 eligibility to include used eligible zero-emission vehicles. For more information on the proposed changes, go to Canada Revenue Agency.

For more information on Class 56, see Classes of depreciable property.

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