As COVID-19 continues to impact the global economy, the Canadian government announced a variety of programs, initiatives, and changes to support small businesses. We’ve rounded these up in one place and will continue to update this list as more announcements are made.
Where can I find financial support for my small business?
Canada Emergency Business Account
The new Canada Emergency Business Account will provide interest-free loans of up to $40,000 to small businesses to help cover their operating costs (i.e. payroll, rent, utilities, insurance, property tax or debt service).
- The CEBA loans will be available to employers with up to $1.5 million in payroll for 2019.
- As of June 19, 2020, employers with payroll lower than $20,000 will be eligible for CEBA if they meet certain criteria.
- If the loan is repaid by December 31, 2022, 25% (up to $10,000) will be forgiven. If the loan is not repaid by December 31, 2022, the remaining balance will be converted to a three-year term loan at 5% interest.
- If you are seeking support, contact your financial institutions directly.
Canada Emergency Commercial Rent Assistance (CECRA)
The CECRA will offer a 75% rent reduction in April, May and June for small businesses affected by COVID-19.
- Eligible small businesses must have closed or lost 70% of their revenue and their rent must be under 50k/month.
- 50% of the reduction will be covered as a loan by the government, while 50%will be covered by the property owner. The small business owner will owe the remaining 25%of the rent.
- The government loan is forgivable if the landlord agrees to lower their rent by 75% and agrees not to evict their tenant.
- Charities and non-profits are eligible as well.
- Click here for more info on eligibility and to apply for your rent reduction.
Co-Lending Program for Small and Medium-Sized Businesses
Business Development Bank of Canada (BDC) is partnering with financial institutions to co-lend term loans to small to medium-sized businesses for operational cash flow requirements.
- Eligible businesses may obtain incremental credit amounts up to $6.25 million, 80 percent of which would be provided by BDC, with the remaining 20% from a financial institution.
- To apply, contact your primary financial institution.
Business Credit Availability Program (BCAP)
$65 billion in lending and other financial support has been made available through the Business Credit Availability Program (BCAP), Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) at market rates.
- Businesses must apply for an operating line of credit or one-year term loan equal to or less than $5 million CAD.
- Contact your financial institution to see if you qualify. Your financial institution will provide application links and risk rating assessments.
What resources are available for Employees and Payroll Support?
Canada Emergency Response Benefit (CERB)
The Canada Emergency Response Benefit will provide $5 billion in support to workers who lose their jobs or face reduced hours as a result of COVID-19 including those who are not eligible for EI. This program will be delivered through the CRA.
- Eligible individuals will be able to receive $2,000 a month for up to 4 months
- This easy to use portal will direct you to the option that best fits your situation (i.e. eligibility for Employment Insurance benefits or not.
[Update]On April 15th, the Canadian government announced the following changes to the benefit:
- Allowing people to earn up to $1,000 per month while collecting the CERB.
- Seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.
- Workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
Work Sharing Program
The Work Sharing Program provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process.
- These programs provide relief such as temporary income support, mortgage and student loan repayment deferrals, household tax support, emergency support benefits, and more.
Canada Emergency Wage Subsidy
*On May 15h, 2020, Prime Minister Trudeau announced the CEWS will be extended through August. More details to come.
The Canada Emergency Wage Subsidy provides eligible employers with a wage subsidy for a period of three months to help prevent lay-offs.
- Eligible employers must have revenue decrease by at least 15% in March 2020; 30% decrease for April and May. Companies will need to reapply for the subsidy each month.
- Canadian small businesses that have not seen a direct decline in revenue due to COVID-19, or cannot prove the 30 percent decline criteria for the 75 percent subsidy, will still be eligible for a 10 percent subsidy.
- The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:
- 75 percent of the amount of remuneration paid, up to a maximum benefit of $847 per week
- The amount of remuneration paid, up to a maximum benefit of $847 per week or 75 percent of the employee’s pre-crisis weekly remuneration (whichever is lower).
- Organizations that do not qualify may continue to qualify for the previously announced wage subsidy of 10 percent of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Check out the CRA FAQs for more information.
- For employers that are eligible for both the Canada Emergency Wage Subsidy and the 10% wage subsidy for a period, any benefit from the 10% wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period.
- Employers will be able to apply for the subsidy once available through their CRA-My Business Account and begin receiving the subsidy directly from the CRA within 3 to 6 weeks of application.
- As of April 27th, 2020 applications for the CEWS are now open. Click here to apply.
Wave Payroll user? Here’s how you can opt-in your company to the Wage Subsidy:*
*Note: This subsidy is reflecting the initial 10% subsidy announced by the Canadian Government.
- Ensure you are eligible for this program as per the criteria set out by the Canadian Government
- Sign in to Wave Payroll
- Go to the payroll dashboard and click “Opt in, my business is eligible” for the Temporary Wage Subsidy program
More information on opting in through Wave Payroll is available on our Help Centre Wage Subsidy page.
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.