Small businesses need help with months of deferred GST/HST payments: CFIB
by CM Staff
30% of small businesses cannot afford their July rent without help, CFIB shares
TORONTO — GST/HST payments that had been deferred to June 30th are coming and many small businesses are worried that costly penalties and interest will start accumulating on amounts they can’t yet afford to pay, warned the Canadian Federation of Independent Business (CFIB).
“We need to understand that although half of Canadian businesses are now fully open, things are still very far from normal in terms of revenues for the vast majority of businesses”, said CFIB president Dan Kelly, in a prepared statement. “Programs that have been extended like the wage subsidy are helping businesses bridge back to normal. We need to do that with other big costs like GST/HST and rent. Canada’s economic recovery depends on it.”
According to new survey data, 30% of small businesses cannot afford their July rent without help. On June 19, CFIB sent an open letter to finance minister Bill Morneau outlining the urgent need to fix the CECRA rent relief program by extending it and creating a path for tenants to access help directly, which could include an expansion of the forgivable portion of the Canada Emergency Business Account (CEBA) loans.
CFIB listed five recommendations to help businesses in their open letter:
- Allow deferred GST/HST payments to be repayable without penalty between now and the end of the year (this is supported by three quarters of small businesses in a recent survey). Small firms also need flexibility where they are expected to remit GST/HST on payments they have not yet received from clients who aren’t able to pay their bills.
- Extend the Canada Emergency Commercial Rent Assistance (CECRA) program to September and lower the revenue reduction requirement.
- Allow tenants to access CECRA funds directly if their landlords do not apply.
- Expand the CEBA loan to $60,000 and increase the forgivable portion to 50%, while providing promised access to new firms and those without business bank accounts.
- Release the revised eligibility rules for the Canada Emergency Wage Subsidy (CEWS) for July and August. Provide access to more firms through a lower and graduated revenue reduction test.
“With so many small businesses in a tight spot financially, government must provide some breathing room or risk suffocating them further.” Kelly concluded.