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FinanceJanuary 19, 2022by Kelvin Lee

COVID-19: Ontario Government Grants for Small Businesses

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*This blog was updated on February 15, 2022. 

The Ontario government has rolled out new financial relief programs to help businesses affected by the COVID-19 pandemic. If you are an eligible small business, you can apply to any of the following Ontario government grants for small businesses:

Ontario Business Costs Rebate Program

This program is intended to support businesses most affected by provincial public health measures in response to the Omicron variant of COVID-19. The Ontario Business Costs Rebate Program opened for applications on January 18, 2022.

Under the program, businesses required to close or operate at reduced capacity will receive rebate payments for a portion of the property tax and energy costs they incur while following these measures.

Those required to reduce capacity to 50 per cent, such as smaller retail stores, will get a rebate payment equivalent to 50 per cent of their costs. Businesses required to close for indoor activities, such as restaurants and gyms, will receive a rebate payment equivalent to 100 per cent of their costs.

Payments to eligible businesses will be retroactive to December 19, 2021, when public health measures first came into force.

What is the eligibility criteria to apply for the Ontario Business Costs Rebate Program?

Businesses eligible for this program include:

  • Restaurants and bars
  • Gyms and other indoor sports and recreational facilities
  • Retailers (non-grocery, less than 50,000 sq. ft.)
  • Small grocery stores (less than 5,000 sq. ft.)
  • Personal care services (hair or body)
  • Indoor meeting and event spaces
  • Places of worship
  • Indoor concert venues, theatres, and cinemas
  • Casinos, bingo halls and other gaming establishments
  • Indoor portion of horse and car racing tracks
  • Indoor museums, galleries, aquariums, zoos, science centres, landmarks, historic sites, and botanical gardens
  • Indoor clubhouses at outdoor recreational amenities
  • Indoor business associated with tour and guide services
  • Indoor teaching and instruction centres
  • Day camps and overnight camps for children
  • Before- and after-school programs
  • Pet and veterinary services
  • Steam rooms and saunas
  • Oxygen bars
  • Bathhouses and sex clubs

To apply, eligible businesses will have to submit proof of costs related to property tax and energy bills.

Ontario COVID-19 Small Business Relief Grant

This small business grant supports businesses that were required to close under the modified Step Two of Roadmap to Reopen. Eligible businesses will receive a grant of $10,000. The Ontario COVID-19 Small Business Relief Grant opened for applications on February 14, 2022. The grant program will be accepting applications until March 11, 2022 at 11.59p.m. EST.

What is the criteria to be eligible for this grant?

To be eligible, a small business must:

  • Be required to close due to public health orders that took effect at 12:01 am on January 5, 2022
  • Employ fewer than 100 employees as of December 31, 2021
  • Be an active business as of January 14, 2022

Will businesses that previously qualified for the Ontario Small Business Support Grant have to apply for this grant?

Businesses that qualified for the Ontario Small Business Support Grant will be pre-screened to verify eligibility. They may be required to provide some additional information but do not have to apply for the new program.

What about newly eligible small businesses?

Newly eligible and newly established small businesses can apply once the application portal opens.

By when can eligible applicants expect to receive funds?

Successful applicants can expect to receive their payments in early February.

Which small businesses would be eligible to apply?

Eligible small businesses include:

  • Restaurants and bars
  • Meeting or event spaces
  • Tour and guide services
  • Facilities for indoor sports and recreational fitness activities
  • Conference centres and convention centres
  • Driving instruction for individuals
  • Before- and after-school programs
  • Performing arts venues and cinemas
  • Museums, galleries, aquariums, zoos, science centres, landmarks, historic sites, and botanical gardens

Tax measures to improve cash flows

Ontario businesses now have a six-month interest- and penalty-free period to make payments for most provincially administered taxes. This measure is intended to provide businesses with support to improve cash flows and plan for the long term.

When does the six-month period begin?

The six-month period started on January 1, 2022. It ends on July 1, 2022.

Which provincial taxes are included under this measure?

Businesses have the option to defer payments for the following taxes:

  • Employer Health Tax
  • Beer, Wine, and Spirits Taxes
  • Insurance Premium Tax
  • Tobacco Tax
  • Gas Tax
  • Fuel Tax
  • International Fuel Tax Agreement
  • Mining Tax
  • Retail Sales Tax on Insurance Contracts and Benefit Plans
  • Race Tracks Tax

Ontario Staycation Tax Credit for 2022

This measure provides indirect relief to Ontario businesses by encouraging Ontario residents to travel within their province. This temporary, personal income tax credit on such travel will support the tourism and hospitality sectors in recovering from the economic impact of the COVID-19 pandemic.

How does it work?

Ontario residents can claim 20 per cent of their eligible 2022 accommodation expenses when filing their personal Income Tax and Benefit Return for 2022. Examples of such expenses include a stay at a hotel, cottage, or campground.

Applicants can claim eligible expenses of up to $1,000 as an individual or $2,000 if they have a spouse, common-law partner, or eligible children, to get back up to $200 as an individual or $400 as a family.

Who is eligible for the Ontario Staycation Tax Credit?

To be eligible, an applicant must be an Ontario resident on December 31, 2022. Please note that only one individual per family can claim the tax credit for 2022. But their claim can include the expenses of their spouse or common-law partner and eligible children.

What expenses are eligible under this tax credit?

The Ontario Staycation Tax Credit can be claimed for accommodation expenses for a leisure stay of less than a month in Ontario, at a short-term lodging or camping accommodation, such as a:

  • Resort
  • Hotel
  • Motel
  • Lodge
  • Cottage
  • Bed-and-breakfast establishment
  • Campground

Short-term accommodation would not include timeshare agreements, or a stay on any vehicle that can be self-propelled, such as a boat or train.

What is the time period for which this tax credit may be claimed?

The tax credit is only available for leisure stays between January 1, 2022, and December 31, 2022. It does not apply to business travel.

What are some other things to keep in mind to be eligible for this tax credit?

The lodging expenses you claim must:

  • Be paid by you, your spouse or common-law partner, or your eligible child, and documented on a detailed receipt
  • Have been subject to Goods and Services Tax (GST)/Harmonized Sales Tax (HST), as reflected on a detailed receipt
  • Not have been reimbursed to you, your spouse or common-law partner, or your eligible child, by any person, including an employer or friend

Your receipts demonstrating your eligibility for accommodation expenses should include all of the following information:

  • Location of the accommodation
  • Amount paid for the accommodation portion of a stay
  • GST/HST paid
  • Date of the stay
  • Name of the payer

What expenses can be claimed under this tax?

If eligible, you can apply for any of the following costs:

  • Accommodation for a single trip or more, up to the maximum expense limit of $1,000 as an individual or $2,000 as a family
  • Accommodations reserved either directly with the accommodation provider or through an online accommodation platform
  • The portion of the expense essential to have access to the accommodation
  • The accommodation part of a tour package expense

How do I apply for the Ontario Staycation Tax Credit?

You can apply for the tax credit on your personal Income Tax and Benefit Return for 2022.

Am I eligible to claim the tax credit even if I don’t owe income tax for 2022?

Yes, provided you are eligible for the tax credit.

Need support navigating business issues related to the COVID-19 pandemic?

If you need assistance preparing company policies for the pandemic or any advice related to a health and safety or human resource management issue, Peninsula can help. For free, confidential, and expert advice, call us today at (1) 833-247-3652.