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.
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.
This support is available until October 31
Read More here: How the Canadian government is supporting small business owners and employees
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.
Mid-Market Guarantee and Financing Program
Through the Business Credit Availability Program, EDC’s Mid-Market Guarantee and Financing Program will bring liquidity to companies who tend to have revenues of between $50 million to $300 million, to sustain operations during this uncertain period.
EDC will continue to work with Canadian financial institutions to guarantee 75 % of new operating credit and cash-flow loans – ranging in size from $16.75 million to a maximum of $80 million.
These expanded guarantees are available to exporters, international investors and businesses that sell their products or services within Canada.
More details will be made available soon.
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.
The Government has extended the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks for employers affected by COVID-19.
This measure will provide income support to employees eligible for Employment Insurance who agree to reduce their normal working hours because of developments beyond the control of their employers.
Creating new jobs and opportunities for youth
The Government is creating up to 116,000 jobs, placements, and other training opportunities to help students find employment and develop valuable skills this summer and over the coming months.
They will also make temporary changes to the Canada Summer Jobs program to allow employers to:
- receive an increased wage subsidy, so that private and public sector employers can also receive up to 100 % of the provincial or territorial minimum hourly wage for each employee;
- extend the end date for employment to February 28, 2021;
- adapt their projects and job activities;
- hire staff on a part-time basis.
Learn more about the various programs:
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.