Additional Financial Support Measures Announced by Federal Government Throughout COVID-19
If you are an IP professional running your own small practice and experiencing a slowdown in work, Prime Minister Justin Trudeau made a significant announcement today that could help support you and your employees throughout the COVID-19 pandemic and the economic crisis.
In light of the pandemic, the Parliamentary Budget Officer predicts a 15% unemployment rate, economic contraction by 5.1% (the largest since 1962) and a federal deficit of $112 billion
Last week, the federal government announced that it would cover 10% of the salaries of those who have been laid off or lost their jobs during this crisis, but it has proven to not be enough.
- The federal government will now cover up to 75% of wages for up to three months for qualifying businesses and will allow employees to be paid even if the business is closed or has slowed down dramatically. This new agreement will be backdated to March 15th and more information is to come on Monday, March 30th.*
- The federal government has also created the Canada Emergency Business Account, which allows banks to offer $40,000 loans to qualifying businesses. These loans are interest free for the first year and if certain conditions are met, $10,000 will be forgiven. 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.
- Businesses, including self-employed individuals, will be allowed to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments until June, as well as customs duties owed for imports. This measure is the equivalent of providing up to $30 billion in interest-free loans to Canadian businesses. It will help businesses so they can continue to pay their employees and their bills, and help ease cash-flow challenges across the country.
- Lastly, the government has launch the new Small and Medium-sized Enterprise Loan and Guarantee program that 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. This is intended for small and medium-sized companies that require greater help to meet their operational cash flow requirements.
*Please find eligibility criteria for the Canada Emergency Wage Subsidy below:
- If your business revenue has gone down by at least 30%, you will be eligible
- The number of employees you have will not be taken into account
- Companies small and large, companies from 10 people to 1000 people
- Will cover the first $58,700 that Canadians earn, up to $847 a week
- Back dated to March 15th
We will continue to update this post as more information becomes available.