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Covid-19 Economic Support for Small Businesses

In an effort to support Canadian businesses and workers impacted by COVID-19 the Government has introduced the Economic Response Plan. The details of the programs have been summarized below. For full program information visit CANADA.CA/Coronavirus.

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Note: All the information below is pulled from publicly available websites. For the most up-to-date information, please see ‘Useful links’ at the end of this article.

The highlights of the plan benefits for small businesses include:

  1. Helping Businesses Keep their Workers: Through the Canadian Emergency Wage Subsidy (CEWS) the government is providing eligible small/medium employers (including non-profits and charities) with a temporary wage subsidy of 75% for up to three months on the first $58,700 paid (up to $847/week) retroactive to March 15, 2020.

    The government has announced a proposed extension to the program until June 5, 2021.

    Who qualifies?

    Eligibility organizations must have experienced a drop in revenue which is calculated by comparing eligible revenue during the crisis with eligible revenue from a previous period (baseline revenue). Visit Canada.ca for details.

  2. Rent Support : The Prime Minister recently announced the Canada Emergency Rent Subsidy (CERS), a revamped commercial rent-relief program that will support businesses, charities and non-profits who have seen a drop in revenue due to the COVID-19 pandemic. Under CERS, qualified organizations can receive up to 65% of rent and mortgage expenses.

  3. The program, which runs from September 27 until June 2021, will provide payments directly to qualifying renters and property owners. Unlike the previous rent support programs, CERS does not require the participation of landlords.

    Additionally, organizations that have been closed due to mandatory public health orders can receive an additional 25% or rent support - when combined with CERS the hardest effected businesses can receive up to 90%.

    To apply visit: Canada.ca

  4. Supporting Canadian Business through the Canada Account: The government is changing the Canada Account to provide additional support to Canadian companies through loans, guarantees or insurance policies during these challenging times.

    The Canada Emergency Business Account (CEBA) program, implemented by eligible financial institutions in cooperation with Export Development Canada (EDC), provides interest-free loans of up to $60,000 to small businesses and not-for-profits. If the loans are repaid on or before December 31, 2022 a loan forgiveness of 25 percent (up to $10,000) will be activated.

    • As of December 4, 2020, CEBA loans for eligible businesses will increase from $40,000 to $60,000.
    • Applicants who have already received the $40,000 CEBA loan may apply for the $20,000 expansion

    All applicants have until June 20, 2021, to apply for $60,000 CEBA loan or the $20,000 expansion.

    For more information and eligibility requirements visit: https://ceba-cuec.ca/

  5. Small Business Loans: Government will guarantee interest-free bank loans of up to $40,000 for small businesses who have paid between $20,000 and $1.5M in 2019 payroll. Repayment of the balance of the loan on or before December 31, 2022, will result in loan forgiveness of 25 per cent (up to $10k). (full details will be posted on Canada.ca soon).

    Also see: How to Qualify for a Small Business Loan from Quickbooks

    Note: On October 9 the government announced an expansion to the small business loans program by providing an added $10,000 that could be forgivable. (For more details visit Canada.ca).

  6. Larger Business Loans: The Large Employer Emergency Financing Facility (LEEFF) will provide support to employers from all sectors with annual revenues of more than $300 million whose credit needs aren't being met through conventional financing.

    To qualify, businesses must be looking for financing of $60 million+, have significant operations or workforce in Canada and not be involved in ongoing insolvency proceedings.

    Interested companies must disclose their climate action plans and sustainability goals to qualify and must meet other conditions, including not having "excessive" executive pay. Companies that have been found guilty of tax evasion are disqualified.

  7. (The application period is now open, for more details visit: https://www.cdev.gc.ca/home-ceefc )

  8. Ensuring Businesses Have Access to Credit: The Business Credit Availability Program (BCAP) will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses. This will be an effective tool for helping viable Canadian businesses remain resilient during these very uncertain times.

  9. Business Development Bank of Canada (BDC): Providing additional support to businesses and entrepreneurs through:
    • Working capital loans of up to $2 million with flexible terms and payment postponements for up to 6 months for qualifying businesses;

    • Postponement of payments for up to six months, free of charge, for existing BDC clients with total BDC loan commitment of $1 million or less

    • Reduced rates on new eligible loans
    • Additional details regarding Business Credit Availability Program (BCAP) measures, including industry-specific support, to be announced in the coming days.

For more details visit: https://www.bdc.ca/en/financing/pages/default.aspx

Useful links:

Last Update: February 8, 2021 Ver 2.3

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