The federal government announced March 27 new measures to support small businesses dealing with the economic impacts of the pandemic, including a 75 per cent wage subsidy for qualifying businesses, for up to three months.
The subsidy, which is retroactive to March 15, 2020, aims to help businesses “to keep and return workers to the payroll.” More details on eligibility criteria will be shared before the end of the month, said the announcement.
Sales tax deferral
The government also said it will allow businesses, including self-employed individuals, to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments until June, as well as customs duties owed for imports.
It has also introduced the new Canada Emergency Business Account. “This program will provide up to $25 billion to eligible financial institutions so they can provide interest-free loans to small businesses. These loans – guaranteed and funded by the Government of Canada – will ensure that small businesses have access to the capital they need, at a zero per cent interest rate, so they can pay for rent and other important costs over the next number of months,” said the announcement.
SME Loan and Guarantee program
In addition, the federal government is introducing the new Small and Medium-sized Enterprise Loan and Guarantee program. This program will enable up to $40 billion in lending, supported through Export Development Canada and Business Development Bank, for guaranteed loans when small businesses go to their financial institutions to help weather the impacts of COVID-19.
"Small businesses are the backbone of our economy, and an important source of good jobs across this country. They are facing economic hardship and uncertainty during the COVID-19 pandemic, and that is why we are taking action now to help them get the financial help they need to protect their workers and pay their bills," stated Prime Minister Justin Trudeau.
The Canadian Federation of Independent Business (CFIB) welcomed the support. “The announcement today of a 75 per cent wage subsidy for SMEs affected by the COVID-19 crisis will not help every company or employee, but will help small firms retain hundreds of thousands of workers who would otherwise be laid off,” said the CFIB in a statement.
The CFIB says it is particularly encouraging that the wage subsidy will be backdated to March 15, which will allow some small businesses that have had to lay off staff rehire them quickly. “We have already heard from a few that will do just that. Ensuring as many workers as possible remain connected to and paid by their employers will reduce the financial and mental stress on workers and ensure that Canada's economic recovery will begin the day after the health emergency phase ends.”