The Federal Government has announced new support for Canadian businesses so that they can keep workers on the job. The Government acknowledged that, even if many businesses have reopened, most are not back to full capacity and are facing the uncertainty of the second wave. The legislation to be passed will include the following:
- Thus, the Government is updating its support for commercial rent and mortgage interest payments. A new program, the Canada Emergency Rent Subsidy, will provide direct support to businesses, not through landlords. For businesses who have seen a revenue drop, the new rent subsidy can support up to 65% of eligible expenses, and up to 90% for businesses temporarily shut down due to a mandatory second wave public health order. Support will be accessible until June 2021 for businesses and organizations that have lost revenue due to the pandemic. This benefit will replace the Canada Emergency Commercial Rent Assistance program which expired at the end of September. More specifically:
- The new program will cover up to 65% of rent costs or mortgage interest payments for businesses that were hardest hit, meaning that their revenue decreased by 70% or more. For businesses that suffered a decline of revenue of less than 70%, there will be a gradually decreasing level of support. This will enable the Government to deliver more targeted, accessible rent support. To simplify the process for businesses, the process will mirror the Canada Emergency Wage Subsidy, and the Canada Emergency Rent Subsidy will flow through the Canada Revenue Agency. The government stressed that the benefit is directly accessible to tenants.
- Additional support will be provided for businesses that had to temporarily close due to public health orders. Businesses going through shutdown will receive an additional top-up of 25% of eligible rent in the event of a temporary closing and revenue shortfall due to a mandatory public health order caused by the pandemic.
- The Canada Emergency Wage Subsidy will be extended at the current subsidy rate of up to 65% of eligible wages until December 19th. The program will operate until June 2021.
- The Canada Emergency Business Account will be expanded for small businesses that need it. For businesses that have already qualified for a CEBA loan, they will be able to get an additional loan of up to $20,000. Up to half of this additional financing can be transformed into a forgivable loan if the loan is paid back by June 31, 2022. The application deadline to apply for CEBA loans has been postponed until December 31, 2020. In order to be eligible for the second round of support, businesses must attest that they have income losses attributable to the pandemic. Details about how to access this financing will be forthcoming.
The Government indicated that support is targeted for businesses that need support most; i.e., those not operating at full capacity. Given public health measures, some cannot operate at full capacity, or must close due to public health measures. The support is structured such that, as the circumstances of a business improve, support will decrease, while if circumstances worsen, support will increase.