With businesses facing an uphill battle to recover from the pandemic in dealing Canada is introducing new measures to help hard-hit businesses manage reduced revenues, increased costs, and persistent uncertainties.
In a news release from the Department of Finance Canada on October 9th, 2020, the government announced plans to introduce new legislation aimed at supporting businesses and other organizations experiencing difficulties because of the pandemic. The plan in part aims to help businesses safely manage the anticipated second wave of the virus and position them for a stronger recovery.
The announcement includes the launch of the new Canada Emergency Rent Subsidy (CERS) program, extension of the Canada Emergency Wage Subsidy (CEWS) program, and the expansion of the Canada Emergency Business Account (CEBA) program.
The proposed CERS program will provide easy-to-access rent and mortgage support for qualifying organizations affected by COVID-19. The goal of the program is to support businesses, charities, and non-profits that have suffered a revenue drop.
Under the program, eligible tenants would directly receive subsidies based on a percent of their expenses, up to a maximum of 65% of eligible rent or mortgage interest payments for businesses that experienced a revenue decline of 70% or more through December 19th, 2020. The eligible percent will gradually decrease in line with revenues for businesses that experienced less than a 70% decline, similar to how CEWS operates.
Organizations will be able to make retroactive claims for the period starting September 27th and ending October 24th. The program is proposed to run until June 2021.
An additional ‘top-up’ subsidy of 25% (on top of the 65%) will be available for businesses who have been forced to temporarily close due to public health orders.
Alongside the new CERS program, the Government plans to extend the Canada Emergency Wage Subsidy program until June of 2021. The extension will also retain the current subsidy rate of up to a maximum of 65% of eligible wages until December 19th, 2020.
The proposed expansion would grant eligible businesses and not-for-profits access to an additional $20,000 in interest-free loans on top of the original CEBA loan of $40,000.
Half of the additional amount - $10,000 – would be forgivable if repaid by December 31st, 2022.
The application deadline has already been extended to December 31st, 2020. You can learn about the eligibility requirements on the program’s official page.
Additional information for the CEBA is expected to be shared in the coming days, and the program’s application deadline has already been extended until December 31st of this year.
Regarding CERS and CEWS, all we know so far is the government intends to introduce legislation to implement these programs “in the near future.” We will post updates as more information becomes available.
In the meantime, we invite you to get in touch to see what programs you and your business may be eligible for, to get help applying to the available programs, or to discuss strategies and approaches on how to plan your business’s financial future.