New support for Canadian businesses hit by COVID-19

While some parts of the economy are recovering, others continue to struggle with reduced revenues, increased costs and uncertainty because of COVID-19. PHOTO: ImageCollab

The Government of Canada has taken action to help Canadian businesses affected by the global COVID-19 pandemic from helping keep employees on the job to increasing cash flow and providing support to help pay rent. Chrystia Freeland, deputy prime minister and finance minister of Canada, announced the government’s intention to introduce new, targeted support to help hard-hit businesses and other organizations experiencing a drop in revenue on 9 October.

Freeland says while some parts of the economy are recovering, others continue to struggle with reduced revenues, increased costs and uncertainty because of COVID-19. She says the government plans to introduce legislation to provide support that would help these businesses safely get through the second wave of the virus and winter, cover costs so they can continue to serve their communities and be positioned for a strong recovery.

“Canadian businesses and workers have shown resilience in adapting to challenges posed by the global pandemic. With the country now in the second wave of this virus, our government knows businesses and workers need continued support. We were there to help businesses when COVID-19 began and will continue to give them the support they need. As we get through this difficult situation, we will keep taking action to support our businesses, protect jobs and keep Canadians safe and healthy,” says the prime minister.

The legislation includes the new Canada Emergency Rent Subsidy, which will provide qualifying organizations affected by COVID-19 with easy-to-access to rent and mortgage support until June 2021. The rent subsidy will be provided directly to tenants, while also providing support to property owners.

According to Freeland, the subsidy will support businesses, charities and non-profits that have suffered a revenue drop by subsidizing a percentage of their expenses on a sliding scale up to a maximum of 65% of eligible expenses until 19 December 2020. She says organizations will be able to make claims retroactively for the period that began 27 September and ends 24 October 2020. Also included is the top-up Canada Emergency Rent Subsidy of 25% for organizations temporarily shut down by a mandatory public health order, issued by a qualifying public health authority, in addition to the 65% subsidy. This follows a commitment in the speech from the Throne to provide direct financial support to businesses temporarily shut down as a result of a local public health decision.

“The extension of the Canada Emergency Wage Subsidy until June 2021 will continue to protect jobs by helping businesses keep employees on the payroll and encourage employers to re-hire their workers. The subsidy will remain at the current subsidy rate of up to a maximum of 65% of eligible wages until 19 December 2020,” says Freeland. Mary Ng, minister of small business, export promotion and international trade for Canada, says this measure is part of the government’s commitment to create over one million jobs and restore employment to the level it was before the pandemic. She says the expanded Canada Emergency Business Account (CEBA) will enable businesses and not-for-profits eligible for CEBA loans, which continue to be seriously impacted by the pandemic, to access an interest-free loan of up to $20 000 in addition to the original CEBA loan of $40 000.

Half of this additional financing will be forgivable if repaid by 31 December 2022. Furthermore, the application deadline for CEBA is being extended to 31 December 2020. Details including the launch date and application process will be announced in the coming days. An attestation of the impact of COVID-19 on the business will be required to access additional financing.

“From the very beginning of this pandemic, we spent every single day listening to business owners and responding to their urgent needs. Today’s changes are a direct result of those crucial conversations, and will help even more Canadian business owners, entrepreneurs, and workers across the country. In the weeks and months ahead, we will continue to have their backs,” says the minister.