The federal government announced on Friday, October 9, 2020 some major changes to support businesses in Canada that have been hit hard, and on the verge of collapse, due to the COVID-19 crisis. The government intends to introduce legislation to implement a new rent subsidy (CERS) and an extension of the wage subsidy (CEWS) to June 21, 2021 in the near future. Those changes include:
- The new Canada Emergency Rent Subsidy, will pick up where CECRA leaves off, and will provide simple and easy-to-access rent and mortgage support until June 2021 for qualifying organizations affected by COVID-19. The rent subsidy would be provided directly to tenants, while also providing support to property owners. The new rent subsidy would support businesses, charities, and non-profits that have suffered a revenue drop, by subsidizing a percentage of their expenses, on a sliding scale, up to a maximum of 65 per cent of eligible expenses until December 19, 2020. Organizations would be able to make claims retroactively for the period that began September 27 and ends October 24;
- A top-up Canada Emergency Rent Subsidy of 25 per cent for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65 per cent subsidy;
- The CEWS (Canada Emergency Wage Subsidy) would remain at the current subsidy rate of up to a maximum of 65 per cent of eligible wages until December 19, 2020. This measure is part of the government’s commitment to create over 1 million jobs and restore employment to the level it was before the pandemic.
- An expanded Canada Emergency Business Account (CEBA), which would enable businesses, and not-for-profits eligible for CEBA loans—and that continue to be seriously impacted by the pandemic—to access an interest-free loan of up to $20,000, in addition to the original CEBA loan of $40,000. Half of this additional financing would be forgivable if repaid by December 31, 2022. Additionally, the application deadline for CEBA is being extended to December 31. Further details, including the launch date and application process will be announced in the coming days. An attestation of the impact of COVID-19 on the business will be required to access the additional financing.
To read the Government of Canada’s news release, click here.