Federal Financial Support for Businesses

The COVID-19 crisis has had significant impacts on businesses across Canada: From storefronts having to temporarily close due to physical distancing to public corporations who have seen a decline in share prices due to the economic fallout.

The federal government has recognized the toll this has already taken and is continuing to roll out subsidies, programs and support measures to help organizations who have come under pressure. To make sure you’re fully aware of what’s available and whether you qualify, we’ve summarized the most relevant benefits below.

Temporary Wage Subsidy

Eligible employers may receive a three-month subsidy equal to 75 percent of wages, backdated to March 15. Eligible businesses must have experienced a revenue decline of at least 30 percent due to COVID-19.

The subsidy applies to a salary of up to $58,700, which translates to a maximum subsidy of $847 per week. Eligible employers include corporations, non-profit organizations and charities ­— and there is no limit to the number of employees.

Canada Emergency Business Account (CEBA)

Banks may provide up to $40,000 in government-backed loans to small businesses and non-profit organizations, with no interest for a year. These are intended to help cover operating costs due to a temporary reduction in business revenues. Up to $10,000 will be forgiven if companies are able to repay their loan by the end of 2022.

Qualifying organizations will need to demonstrate they paid between $20,000 and $1.5 million in total payroll in 2019. Businesses can apply for CEBA through their banks or credit unions.

Business Credit Availability Program (BCAP)

The federal government has established the BCAP to support private sector financing through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).

• Small business loan: Corporations can access up to $100,000 through an online application
• Working capital loan: Loans greater than $100,000 to support everyday operations
• Purchase Order Financing: Loans to fulfill domestic or international orders

Sales Tax and Import Duties

The government will allow all businesses, including self employed individuals, to defer payment of sales tax (GST, HST) and import duties until June 2020.

Income Tax Deferral

All businesses may defer the payment of any income tax amounts that become owing on or after March 18, 2020 and before September 2020 until August 31, 2020.

More information: Department of Finance-Tax Filing Flexibility

Additional Program Announcements and Changes

Canada Emergency Response Benefit (CERB)

Canadians can now apply for the CERB if they earn $1,000 or less per month, have recently exhausted employment insurance benefits — or are part-time, seasonal, or contract workers.

Canada Emergency Wage Subsidy

Additional changes have been made to the Canada Emergency Wage Subsidy program, including:

• Businesses can now show only a 15 percent decline in revenue for the month of March — but a 30 percent decline in revenue for April and May.
• Businesses may now use revenue figures from January and February to demonstrate this decline.

Canada Emergency Commercial Rent Assistance

This program will help businesses cover rent from April through June and will be delivered in partnership with provinces.

Canada Summer Jobs Program

Changes to the Canada Summer Jobs Program will allow employers to keep their employees on the payroll and hire younger Canadians this summer.

Energy Sector and Innovation Ecosystem Support

The Government of Canada announced welcomed support for these two struggling industries, with more details forthcoming. As of right now, these sectors will receive:

• $1.7 billion orphan well cleanup
• $750 million emissions reduction fund
• $250 million to support innovation ecosystem through Industrial Research Assistance Program (IRAP)

MNP is Here to Help

If you’re concerned your business will not be able to weather the economic impacts of the COVID-19 pandemic ­— even after taking advantage of the federal support measures outlined above — you may have options that will allow you to avoid closing your operations.

With Licenced Insolvency Trustees across the country who specialise in corporate recovery and restructuring, MNP can consult with you about the available options to address financial difficulties and assist in preparing forecasts. These may include provisions under the Bankruptcy and Insolvency Act and Companies’ Creditors Arrangement Act (CCAA).