A BREAKDOWN OF FINANCIAL SUPPORT FOR CANADIAN BUSINESSES
Today, Prime Minister Trudeau provided broad details regarding the support for Canadian businesses announced on Friday. Further details are anticipated tomorrow. The focus of the government is to help ensure that employees are receiving a pay check and maintaining their employment, even if they are not able to work right now. The goal of the plan is to make sure that businesses are ready to resume as soon as this emergency is over, to ensure that the economy is kick started. The wage subsidy plan is aimed at helping people keep their jobs and there is hope that through the wage subsidy businesses that have laid off employees in the last two weeks due to COVID-19 will rehire them. The details provided today regarding the wage subsidy include the following:
- a business is a qualifying business if their revenue has decreased 30% as a result of COVID-19, regardless of the size of the business, the number of employees or whether the business remains open and operating or not;
- the wage subsidy is available to non-profit and charitable organizations;
- the wage subsidy is provision of an amount equivalent to 75% of an employees wages on the first $58,700 earned, or up to a maximum of $847 per week;
- the wage subsidy will be backdated to March 15.
The Prime Minister stressed that the wage subsidy will be provided based on representations by companies that their revenue has decreased by 30%. Confirmation of the reduction of revenue will be done once we are through this emergency and if a business has claimed the subsidy when they were not qualified, there will be consequences. The government encourages companies to pay the additional 25% of wages to employees where they are able to do so.
The Prime Minister also again confirmed the existence of the Canadian Emergency Response Benefit (CERB) which is available to help those individuals who have lost their jobs or are self-employed. The benefit remains at $2,000 per month and is available for a period of four months. Applications will be open as of April 6 with anticipated direct deposits approximately ten days after the application is received.
The Prime Minister also confirmed the postponement until June of payments of duties and taxes on imports as well as GST.
The final government assistance to businesses is in the form of the interest free loan announced on Friday, of up to $40,000 with $10,000 of the loan being potentially forgivable. No further details regarding the loan were released today, however Prime Minister Trudeau did refer to the loan as a way for businesses to pay their rent and/or to pay the salaries of employees while they are awaiting the wage subsidy payments. Businesses will have to look to the provinces for rent abatement or subsidies as such measures would fall within provincial jurisdiction.
Further details are expected tomorrow when the Minister of Finance and Minister of Small Business will be providing their briefing.
Still have questions about how your business has been affected by COVID-19? Contact Rose Keith at email@example.com or anyone else from our team listed on the Authors page.