October 26, 2020

CEBA Expanded to Those Without Business Accounts

The CPA was pleased to see the federal government announce that small businesses operating under a non-business bank account (such as a personal bank account) will now be eligible for a loan under the Canada Emergency Business Account (CEBA) program. The CPA has been calling for the government to expand eligibility for CEBA to include businesses who operate without a business bank account since the program was first established in the spring. This measure is in effect immediately and stands to help provide access to financial support for the many sole-proprietor physiotherapists who continue to face financial challenges due to COVID-19.

The deadline to apply for CEBA is December 31, 2020. Full details on the government’s announcement and eligibility under CEBA are available here.

 


 

October 9, 2020

Today, the Prime Minister announced new targeted financial supports to help businesses that are continuing to face income losses and reduced operating capacity due to the COVID-19 pandemic. The government announced the introduction of a new commercial rent relief subsidy that will be provided directly to business owners, an extension of the Canada Emergency Wage Subsidy (CEWS), and an expansion of the Canada Emergency Business Account (CEBA). The government also announced a top-up rent subsidy for businesses forced to close due to mandatory public health orders, resulting in temporary closures due to COVID-19. All of these measures are designed to provide targeted support to help the hardest-hit businesses and support levels provided will vary based on revenue/income decreases experienced by a particular business.

The CPA is pleased that the government has created a program to provide commercial rent support directly to business owners without relying on the participation of landlords. We have been advocating for this direct support since the early days of the COVID-19 pandemic and believe this new program will fill in some of the gaps experienced by qualifying businesses whose landlords/commercial property owners refused to participate in the original Canada Emergency Commercial Rent Assistance (CECRA) program. The extension of the CEWS is also appreciated, as it continues to serve as an important measure to keep businesses open and employees on payrolls as revenues are still in decline. The CPA also acknowledges the expansion of the CEBA to provide additional funding to businesses who have qualified for the program is a positive step, but more must still be done to get support to those businesses who have not qualified for the first round of CEBA due to the lack of a business account or other factors. We will continue to work with the government to call for action for physiotherapists and physiotherapy businesses who are excluded from these supports.

Available details concerning the new programs and supports are available here.

A summary of the measures announced today is below.

  • Canada Emergency Rent Subsidy (CERS) – The CERS will provide income support of up to 65 percent of rent or mortgage interest payments directly to eligible tenants. This support will be provided directly to the business and does not require the participation of property owners/landlords. The specific amount of support provided will be based on a sliding scale, in line with the revenue decrease experienced by the business, with businesses who have faced a 70 percent decrease in revenues being eligible for the maximum. The program will be in place until June 2021, with the parameters announced today being in effect until December 19, 2020. Future parameters will be adapted and targeted as needed. This measure must be enacted through legislation, which is expected to be introduced in the coming weeks.
     
  • Organizations that are closed temporarily due to public health orders will be eligible for a 25 percent top-up rent subsidy, in addition to the 65 percent subsidy through CERS. This follows a commitment in the Speech from the Throne by government to provide direct financial support to businesses temporarily shut down as a result of a local public health decision.
     
  • Canada Emergency Wage Subsidy (CEWS) – The CEWS will be extended until June 2021. The subsidy will remain at the current subsidy rate of up to a maximum of 65 percent of eligible wages until December 19, 2020. This measure must be enacted through legislation, which is expected to be introduced in the coming weeks.
     
  • Canada Emergency Business Account (CEBA) – The CEBA expansion will enable businesses and not-for-profits that are eligible for CEBA loans and that continue to be seriously affected by the pandemic to access an additional interest-free loan of up to $20,000 (on top of the original $40,000 loan). 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, 2020. 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.
     

 

October 6, 2020

The federal government has recently made several changes to the financial supports available to individuals and businesses to address the hardships faced due to the COVID-19 pandemic. The measures are in various stages of implementation with some having been implemented, some announced waiting for roll-out, and some are being enacted through legislation. As such, full details for all programs are not yet available and some measures may be subject to approval or additional changes. Where possible, direct links to the government programs are provided. The following is a summary of the major financial programs available to support individuals and businesses during the COVID-19 pandemic. The full list of government programs available to date is available here.

Support for Individuals

Canada Emergency Response Benefit (CERB) – This benefit, which provided $2,000 every four weeks for up to 28 weeks to eligible workers who stopped working or whose work hours were reduced due to COVID-19, has now closed. Recipients who have a need for continued government support are being transitioned to either Employment Insurance (EI) or the new Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB), or the Canada Recovery Caregiving Benefit (CRCB).

Employment Insurance (EI) – The federal government has made temporary changes to the EI program to better support Canadians who are currently looking for employment. Individuals who received the CERB through Service Canada will be automatically transitioned to EI once their CERB has been exhausted. Individuals who received the CERB through the Canada Revenue Agency will need to apply for EI after September 26. The EI program has been updated to reduce the number of insured hours worked to qualify for EI, to extend the time frame to accumulate hours for CERB recipients, and to ensure a minimum of $500 per week benefit. A summary of recent changes to eligibility for EI is available here and full details on eligibility and how to apply are here.

Canada Recovery Benefit (CRB) – Applications for the CRB are expected to open on October 12, 2020. The CRB is designed to provide income support to employed and self-employed individuals who are directly affected by COVID-19 but who are not eligible for Employment Insurance (EI). Eligible Canadians will be entitled to a $1,000 benefit ($900 after taxes) for a two-week period. The CRB does not renew automatically, so individuals receiving the CRB who continue to need the benefit will have to re-apply every two weeks. Individuals may be eligible for up to 13 two-week periods between September 27, 2020 – September 25, 2021 for a total of 26 weeks of support through the program. Additional details are available here.

Canada Recovery Caregiving Benefit (CRCB) – The Canada Recovery Caregiving Benefit (CRCB) opened for applications on October 5, 2020. The CRCB is designed to provide income support of up to $500 per week to employed and self-employed individuals who are unable to work because they must care for a child under 12 years old or a family member who needs supervised care. This applies if the care is needed because their school, regular program, or facility is closed due to COVID-19 or because they are sick or self-isolating or at risk of serious health complications due to COVID-19. Only one person per household is eligible for the benefit for each one-week period. Applicants must re-apply each week they need the CRCB and may apply for up to 26 weeks of coverage between September 27, 2020 – September 25, 2021. To be eligible, applicants have to have earned at least $5,000 in 2019 or 2020 from employment income, self-employment income, or maternity/parental benefits from EI or similar Quebec Parental Insurance Plan. Further, the applicant must be unable to work at least 50% of their scheduled work week due to care requirements and cannot be receiving EI, CRB, short-term disability benefits, Workers’ compensation benefits, Quebec Parental Insurance Plan benefits, or paid leave from their employer for this same period. Additional details are available here.

Canada Recovery Sickness Benefit (CRSB) – The Canada Recovery Sickness Benefit (CRSB) provides income support to employed or self-employed individuals who are unable to work because they are sick or need to self-isolate due to COVID-19, or have an underlying health condition that puts them at greater risk of getting COVID-19. The CRSB provides $500 pre-tax for a one-week period and applicants must re-apply if they need support for a second week. Applicants may be eligible for a total of two weeks of benefits under the CRSB between September 27, 2020 – September 25, 2021. The weeks do not have to be taken consecutively. To be eligible, applicants have to have earned at least $5,000 in 2019 or 2020 from employment income, self-employment income, or maternity/parental benefits from EI or similar Quebec Parental Insurance Plan. Further, the applicant must be unable to work at least 50% of their scheduled work week due to care requirements and cannot be receiving EI, CRB, short-term disability benefits, Workers’ compensation benefits, Quebec Parental Insurance Plan benefits, or paid leave from their employer for this same period. Additional details are available here.

Support for Businesses

Canada Emergency Wage Subsidy (CEWS) – The Canada Emergency Wage Subsidy provides qualifying businesses with a wage subsidy of up to 75 percent to help businesses keep and return workers to their payrolls during the COVID-19 pandemic. The government first launched the CEWS in spring 2020 to run for a period of 12 weeks and has since extended the program multiple times and announced it will continue with some revisions through summer 2021. To qualify for support, eligible businesses have to demonstrate a drop in revenue due to COVID-19. The amount of subsidy a business qualifies for depends on the drop in their revenue and number of employees over each particular qualifying period. Details on how the CEWS works, including eligibility information, qualifying periods, and access to a calculator to help estimate your claim, are available here. Businesses have until January 31, 2021 to apply for the CEWS.

Canada Emergency Business Account (CEBA) -  The Canada Emergency Business Account has recently been extended until October 31, 2020. The CEBA provides an interest-free loan of up to $40,000 to small business and not-for-profits. The CEBA was designed to provide businesses with the support needed to finance expenses that could not be avoided during a period of shutdown. If the balance of the loan is repaid in full by December 31, 2022, 25 percent of the loan ($10,000) will be forgiven. To be eligible for CEBA, a business has to have been in operation as of March 1, 2020, had payroll of between $20,000 and $1.5 million in the 2019 calendar year; has non-deferable eligible expenses, such as rent, insurance, and utilities; and has an active business chequing/operating account with a Canadian financial institution. On September 23, in the Speech from the Throne, the government announced it would expand CEBA to also cover fixed costs, but further details on that element have yet to be provided. More details about CEBA are available here.

Canada Emergency Commercial Rent Assistance (CECRA) - The Canada Emergency Commercial Rent Assistance Program provides loans to commercial property owners who lowered commercial rent by 75 percent to small business tenants for the months of April, May, June, July, August, September, and October. CECRA would cover the cost of 50 percent of the rent, the tenant would cover the cost of up to 25 percent, and the commercial property owner would forgive at least 25 percent of the rent. The federal government has extended this program several times, but recently announced that October will be the last month for which CECRA is offered. Discussions about a replacement program are underway, but no commitments have yet been made by the federal government. CECRA was offered in partnership with the provinces and territories, as commercial rent is a provincial/territorial issue, and the federal government has indicated that any future support program will likely again involve participation of property owners/landlords and both levels of government. The CPA has been active in calling on the federal government to provide commercial rent relief directly to small business owners rather than relying on their landlord/commercial property owner to participate and continues to do so. The CPA is also encouraging the government to provide any future commercial rent support in the form of a grant rather than a loan. The deadline to opt into the final extension of CECRA is October 30, 2020. Additional details about CECRA are available here.

Business Credit Availability Program (Co-Lending Program for Small and Medium-Sized Enterprises)  Export Development Canada (EDC) and Business Development Canada (BDC) are working with small and medium businesses to improve access to credit during the COVID-19 pandemic to help businesses meet their cashflow needs. EDC is working with financial institutions to offer loan guarantees of up to 80 percent for financing support for operational expenses to both exporting and non-exporting businesses. Find out more here.

BDC is working with financial institutions to co-lend term loans of up to $6.25 million to small and medium-sized enterprises for their operational cashflow requirements. Different maximum financing amounts will be available based on individual business revenues. Find out more here.

Regional Relief and Recovery Fund (RRRF) – The Regional Relief and Recovery Fund is designed to provide financial support to businesses in need of assistance during the COVID-19 pandemic that have not been able to access other government support programs. Through regional development agencies, the government is providing over $1.5 billion in funding to organizations in hard-hit sectors, such as tourism, manufacturing, technology, and others. Applications to the program are based on specific criteria set by the local regional development agency and must be made through your local agency (i.e., Western Economic Diversification, Atlantic Canada Opportunities Agency, etc.). As well, businesses must have applied to other Government of Canada COVID-19 relief measures and have been either ineligible or rejected. Find out more here.