Nicole Ewing LLB, TEP, CLU - Senior Strategist, Advice & Guidance
Canada's COVID-19 Economic Response Plan is designed to provide immediate and significant resources to businesses facing hardship as a result of the COVID-19 outbreak. This information is continually changing, and we will update this page with the latest information and resources as they become available. Please bookmark this page and check back regularly for updates.
Extending the Work-Sharing Program
The Canadian government has doubled the maximum length of the Work-Sharing program from 38 weeks to 76 weeks. This pre-existing program is available to workers who reduce their normal working hours because of developments beyond the control of their employers.
The Canada Emergency Wage Subsidy (CEWS)
The CEWS subsidizes 75% of an employee's salary (up to $847 per week) for up to 3 months, retroactive to March 15, 2020.
- For a business to qualify for CEWS for a particular period, it must have experienced a decline in gross revenues. There are unique revenue decline thresholds and reference periods for each of the three claim periods.
- Revenue is calculated based on business carried on in Canada, earned from arm's-length sources, using the business' normal accounting method, and excluding extraordinary items and amounts on account of capital.
- Businesses that do not qualify for the CEWS may qualify for an alternative 10% wage subsidy payable from March 18, 2020 to before June 20, 2020.
- For additional information on the CEWS legislation, including eligibility, how to apply, government assistance etc., visit the Government of Canada website.
Note: As of May 19: The CEWS will be in place until August 29, 2020.
Business Credit Availability Program (BCAP)
The BCAP was established to provide additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Together with private sector lenders, BDC and EDC are coordinating credit solutions for individual businesses, including:
- 80% of new operating credit and cash flow term loans of up to $6.25 million to small and medium-sized businesses.
- Until September 30, 2020, co-lending term loans to small and medium-sized businesses to meet operational cash flow requirements.
- Commercial loans ranging from $12.5 million to $60 million to medium-sized businesses (those with approx. $100 million or more in annual revenues) whose credit needs exceed existing measures offered through the BCAP.
- For those businesses with revenues of between $50 million and $300 million, EDC will work with Canadian financial institutions to guarantee 75% of new operating credit and cash-flow loans of between $16.75 million and $80 million.
Businesses should work directly with their financial institutions to access these programs.
Canada Emergency Business Account (CEBA)
- CEBA will provide interest-free (for the first year) loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs while their revenues are temporarily reduced.
- To qualify, businesses must demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019. Up to 25% of the loan amount may be forgiven if the balance is repaid by December 31, 2022.
- Interested businesses should work with their current financial institutions to access these programs.
Canada Emergency Commercial Rent Assistance (CECRA)
- The federal government has reached an agreement in principal with each of the provinces and territories to implement the CECRA for tenants who currently pay less than $50,000 per month in rent and who have temporarily ceased operations or experienced at least a 70% drop in revenues.
- The program will lower rent by 75% for affected small business tenants. Qualifying commercial property owners will be granted forgivable loans to cover 50% of three monthly rent payments owed by eligible small business tenants. If as part of a rent forgiveness agreement, the property owner agrees to reduce the tenant's rent by at least 75% and not evict the tenant while the agreement is in place, the loans will be forgiven.
- The government has indicated the CECRA will be operational by mid-May.
Extension of Income Tax Deadlines
- Self-employed taxpayers and their spouse or common law partner:
- Filing date for 2019 tax year: June 15, 2020 (unchanged)
- Payment date for 2019 tax year: September 1, 2020 (extended)
- Corporations that would otherwise have a filing due date after March 18, 2020 and before June 1, 2020:
- Filing date for current tax year: June 1, 2020 (extended)
- Payment date for current year's balances & instalments under Part 1 of the Income Tax Act: September 1, 2020
- Filing date for the 2019 T5013 Partnership Information Return: May 1, 2020 (extended)
Deferral of Sales Tax Remittance & Customs Duty Payments
- Businesses are permitted to defer, until the end of June 2020, any GST/HST payments or remittances that become owing on or after March 27, 2020, and before June 2020.
- If payments or remittances are made by the end of June 2020, interest will not apply.
Large Employer Emergency Financing Facility (LEEFF)
The LEEFF program will be open to large for-profit businesses (excluding those in the financial sector) and certain not-for-profit businesses with annual revenues generally in excess of $300 million.
Qualifying businesses must be asking for financing of $60 million or more, have significant operations or workforce in Canada, and not be involved in active insolvency proceedings.
Additional Considerations for Business Owners:
- Commercial Leases: In addition to familiarizing themselves with the details of the CECRA program, landlords and tenants should review their commercial leases and seek appropriate legal advice to determine their rights and obligations.
- Many contracts contain clauses addressing the options available to parties (including the surrender of a lease) in the event of a pandemic or other emergency. While some leases may contain clauses allowing for a reduction of rent and other payments in certain circumstances (such as the inability to access the property), any failure to comply with the lease may expose the parties to eviction and/or claims for damages.
- Authorized Parties: Ensure you have up-to-date documents in place to allow an authorized individual or individuals, the ability to act on your behalf with respect to your financial and business dealings, in the event you are incapacitated due to illness.
- Mortgages: Canada’s largest banks are offering mortgage payment relief to customers in the form of deferred mortgage payments.
- Customers who have been impacted by COVID-19 and are in good standing with their loan provider, may apply for mortgage relief directly with their financial institution. While payments may be deferred, it is important to be aware that interest will generally continue to accrue and will be added to the balance of your mortgage.
- Utilities: Many gas, electric, and water service providers are suspending disconnections of customers unable to pay their bills.
- The duration of these extensions and who qualifies varies considerably from location to location. Some are suspending late fee accruals in addition suspending disconnections, while others are allowing late fees to accrue which would eventually need to be paid off.
- Call or visit the website of your specific utility providers to find out what relief they may be offering and how to qualify.
- Telecommunications/Internet Service Providers: Many broadband and telephone service providers have temporarily committed to not terminate service to any small business customers because of their inability to pay bills due to the disruptions caused by the coronavirus pandemic; waive overage charges that any small business customers incur; and waive long-distance and/or roaming changes in certain circumstances.
- Call or visit the website of specific companies to determine any relief available and how to qualify to receive the relief or benefits.
- Credit Card Debt/Consumer Credit: Most creditors have webpages dedicated to their response to coronavirus, as well as which programs they have available to assist their customers.
- Call the customer service line or visit the creditors' website for details on programs that may be available.
- Banking: Can check if your bank has instituted any programs in response to the coronavirus at their website: