COVID-19 Update: New Rebate Program and Lowering of Small Business Tax
Sask. gov’t announces new rebate program for businesses
The province has announced more assistance for businesses affected by the COVID-19 pandemic.
The Strong Recovery Adaptation Rebate (SRAR) will be available to businesses that have had to adapt their business models during the pandemic, such as changing the use of square footage, installing physical infrastructure to comply with COVID-19 mitigation guidelines or upgrading technology.
Eligible businesses will receive a rebate of 50 per cent to a maximum of $5,000 for a $10,000 expenditure, with amounts being determined based on business expenditures for changing business models to adapt to the current environment.
In order to qualify, a business must employ less than 100 people, have or will incur expenses to adapt their business between April 1, 2020 and Feb. 28, 2021, plan to continue operating and have experienced at least a 30 per cent revenue drop compared to 2019.
“Our government continues to stand with our small business community as we work toward economic recovery, and this program is one more tool to help small businesses navigate the challenging situation we currently face,” said trade and export development minister Jeremy Harrison in a press release.
“Small businesses are continuing to do their part by not only protecting public health, but also helping to ensure a strong economic recovery in both the weeks and months ahead, and in the longer term as well,” said Harrison.
The program will open to applications in the coming weeks.
Government lowering small business tax
The government has announced it is reducing the province’s small business income tax rate to zero for the next two years.
According to a government press release, the small business corporate income tax rate drops from two per cent to zero effective Oct. 1, 2020. Beginning July 1, 2022, the rate will move to one per cent. On July 1, 2023 the rate will return to two per cent.
The amount small businesses can earn at the small business tax rate will remain at $600,000. The government said these tax reductions will benefit approximately 31,000 incorporated small businesses in the province, saving them more than $189 million in provincial taxes over the next three years. The government said each small business will save an average of $6,100.
“Saskatchewan’s small businesses and their employees have been hard hit by the effects of the global COVID-19 pandemic,” said deputy premier and finance minister Donna Harpauer in a press release.
“Lowering taxes for every small business in our province over the next three years will help them to recover from the pandemic and enable them to retain and hire more workers,” said Harpauer.