October 9, 2020 - Ottawa, Ontario From: Department of Finance Canada
The Government of Canada took immediate 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.
While some parts of our economy are recovering, others continue to struggle with reduced revenues, increased costs, and uncertainty because of the COVID-19 pandemic.
That is why today the Deputy Prime Minister and Finance Minister, the Honourable Chrystia Freeland, announced the government’s intention to introduce new, targeted supports to help hard-hit businesses and other organizations experiencing a drop in revenue. The government plans to introduce legislation to provide support that would help these businesses safely get through the second wave of the virus and the winter, cover costs so they can continue to serve their communities, and be positioned for a strong recovery, including:
- The new Canada Emergency Rent Subsidy, which would provide simple and easy-to-access rent and mortgage support until June 2021 for qualifying organizations affected by COVID-19. The rent subsidy would be provided directly to tenants, while also providing support to property owners. The new rent subsidy would 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 per cent of eligible expenses until December 19, 2020. Organizations would be able to make claims retroactively for the period that began September 27 and ends October 24, 2020.
- A top-up Canada Emergency Rent Subsidy of 25 per cent for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65 per cent 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, which would continue to protect jobs by helping businesses keep employees on the payroll and encouraging employers to re-hire their workers. The subsidy would remain at the current subsidy rate of up to a maximum of 65 per cent of eligible wages until December 19, 2020. This measure is part of the government’s commitment to create over 1 million jobs and restore employment to the level it was before the pandemic.
- An expanded Canada Emergency Business Account (CEBA), which would enable businesses, and not-for-profits eligible for CEBA loans—and that 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 would be forgivable if repaid by December 31, 2022. Additionally, the application deadline for CEBA is being extended to December 31, 2020. Further 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 the additional financing.
Quotes
“Canadian businesses and workers have shown tremendous resilience in adapting to the 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 the COVID-19 pandemic began, and we 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.”
- The Hon. Chrystia Freeland, Deputy Prime Minister and Minister of Finance
“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.”
- The Hon. Mary Ng, Minister of Small Business, Export Promotion and International Trade
Quick facts
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The government intends to introduce legislation to implement the new rent subsidy and the wage subsidy extension in the near future.
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Since its launch, over 3.7 million Canadians have had their jobs supported through the Canada Emergency Wage Subsidy, with more than $41 billion paid out in subsidies as of October 4, 2020.
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Small- and medium-sized businesses are strongly represented in sectors like tourism and transportation, which continue to be significantly affected by the virus and the measures taken to contain it.
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As of early October, the Government of Canada has delivered over $1.8 billion in rent support, through the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. Rent assistance has helped over 130,000 small businesses, supporting 1.18 million jobs in Canada.
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The new rent subsidy would pick up where the previous program left off, delivering direct, targeted, and accessible rent support to qualifying organizations affected by COVID-19 without the need to work through their landlords. It would provide a subsidy for eligible fixed property expenses, including rent and interest on commercial mortgages. Program parameters announced today apply until December 19, 2020 with future parameters in 2021 to be adapted and targeted as needed.
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Launched in April, CEBA provides zero-interest, partially forgivable loans to small businesses that have experienced diminished revenues due to COVID-19 but face ongoing costs, such as rent, utilities, insurance, taxes and employment costs. By assisting these businesses in covering their costs, CEBA is intended to help them resume normal business operations after COVID-19.
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The additional CEBA loan would effectively increase CEBA loans to $60,000 from $40,000 for eligible businesses, of which a total of $20,000 would be forgiven if the balance of the loan is repaid before December 31, 2022. An attestation of the impact of COVID-19 on the business will be required to access the additional financing.
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As of early October, over 765,000 CEBA loans have been approved, representing more than $30 billion.