Corporate Assistance Programs

CEWS LATEST UPDATE

Rate structure of the base subsidy: 

Periods	Period 5*: July 5 – August 1	Period 6*: August 2 – 29	Period 7: August 30 – September 26	Period 8: September 27 – October 24	Period 9: October 25 – November 21
Max weekly benefit per employee	Up to $677	Up to $677	Up to $565	Up to $452	Up to $226
Revenue drop 50% and over	60%	60%	50%	40%	20%
0% to 49%	1.2 x revenue drop (e.g., 1.2 x 20% revenue drop = 24% base CEWS rate)	1.2 x revenue drop (e.g., 1.2 x 20% revenue drop = 24% base CEWS rate)	1.0 x revenue drop (e.g., 1.0 x 20% revenue drop = 20% base CEWS rate)	0.8 x revenue drop (e.g., 0.8 x 20% revenue drop  = 16% base CEWS rate)	0.4 x revenue drop (e.g., 0.4 x 20% revenue drop = 8% base CEWS rate)

 

 

Rate structure of the combined base subsidy and the top-up subsidy for Periods 5 and 6*Average revenue drop in the preceding 3 months: 

Revenue drop in the current 1-month reference period	70% or more	50% to 69%	0% to 49%
50% or more	85% (60% base CEWS + 25% top-up)	60% + 1.25 x (3 month revenue drop-50%) (e.g., 60% base CEWS + 1.25 x (60% 3 month revenue drop – 50%) = 72.5% CEWS rate)	60% (60% base CEWS + 0% top-up)
0% to 49%	1.2 x revenue drop + 25% (e.g., 1.2 x 20% revenue drop + 25% = 49% CEWS rate)	1.2 x revenue drop + 1.25 x (3 month revenue drop-50%) (e.g., 1.2 x 20% revenue drop + 1.25 x (60% 3-month revenue drop-50%) = 36.5% CEWS rate)	1.2 x revenue drop (e.g., 1.2 x 20% revenue drop = 24% CEWS rate)
No revenue drop	25% (0% base CEWS + 25% top-up)	1.25 x (3 month revenue drop-50%) (e.g., 1.25 x (60% 3-month revenue drop-50%) = 12.5% CEWS rate)	Nil

 

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Business Development Corporation – BDC 

Two financing programs are available through the BCAP:

    1.  Canada Emergency Business Account

    2.  SME Loan and Guarantee Program

Both programs are administered by private-sector financial (banking) institutions.

In order to be eligible, your business must have been impacted directly or indirectly by recent events and have been financially viable prior to the impact of COVID-19.

 

Canada Emergency Business Account (CEBA)

• Up to $40,000

• Zero-interest for the first year

• To qualify, organizations will need to demonstrate they paid between $20,000 and $1.5 million in total payroll in 2019, based on their 2019 T4SUM Summary of Remuneration Paid

• If the loan is repaid by December 31, 2022, 25% (up to $10,000) will be forgiven

• Available through your primary financial institution

 

Expansion to the eligibility criteria for the CEBA  (announced June 15, 2020)

On June 15, 2020, the Minister of Finance announced that applications for the CEBA under the expanded eligibility criteria would be accepted starting June 19, 2020. 

The portal to apply for CEBA ($40,000) opened on June 19 for entities who have less than $20,000 in payroll but between $40,000 and $1,500,000 of non-deferrable expenses (rent, utilities, insurance).

To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:

• A business operating account at a participating financial institution
• A Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return.
• Eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.

 

SME Loan and Guarantee Program

• BDC co-lending (with financial institutions)

• Up to $6.25 million

• Commercial interest rate

• 10-year repayment period

• Available through your primary financial institution

 

Application procedure

 

 

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Export Development Canada – EDC

EDC BCAP Guarantee

Effective March 24, 2020, EDC is supporting all exporting companies by offering their bank a guarantee on loans of up to $6.25 M so that companies can access more cash immediately. 

 

Application procedure

Available through your primary financial institution.

 

Other EDC Measures

For credit insurance customers, effective immediately EDC will:

Cover losses for goods shipped even if the buyer has not accepted the goods, subject to terms*.

Waive the 60-day waiting period for claims*.

*This does not apply to Domestic coverage. 

 

EDC access instructions:

•  New to EDC and seeking more information call 1-800-229-0575 or click here.
•  Current EDC Customer needing working capital and financial solutions should contact their account manager.
• Existing customers needing any assistance with insurance products and online portals should contact 1-866-716-7201 and support@edc.ca.

 

 

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Work Share Program

Work-Sharing is a program to avoid lay-offs when there is an uncontrollable temporary decrease in business activity. The program provides EI benefits to eligible employees who agree to reduce their normal working hours.

 

To be eligible your business must:

• Be a year-round business in Canada for at least 1 year
• Be a private business, a publicly held company or a not-for-profit organization, and
• Have at least two employees in the work-sharing unit

 

To be eligible for work-sharing benefits, your employees must:

• Be year-round, permanent, full-time or part-time employees needed to carry out the day-to-day functions of the business ( “core staff”)
• Be eligible to receive EI benefits, and
• Agree to reduce their normal working hours by the same percentage and to share the available work

 

 

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Canada Emergency Commercial Rent Assistance (CECRA)

July 7, 2020 extension of CECRA program to the end of July 2020 – see below.

The CECRA is administered and delivered by the Canada Mortgage and Housing Corporation.

The CECRA program will lower rent by 75% for the months April/May/June/July for qualifying small businesses that have been affected by COVID-19.

Eligibility for CECRA has both tenant and landlord components:

• Tenants must pay less than $50,000/month in rent and have experienced a minimum of a 70% decrease in pre-COVID-19 revenues.

 

Details

• The program provides forgivable loans to qualifying commercial property owners to cover 50% of four monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, June and July. 
• The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75% for the four corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place.
• The small business tenant would cover the remainder, up to 25% of the rent (12.5% in Québec).
• This support will also be available to non-profit and charitable organizations.

 

Who is Eligible to Apply for the CECRA

Points of interest

• The program is available to landlords with properties that have no mortgage. 
• Mixed-use properties with commercial and residential tenants are eligible for the program with respect to their qualifying small business tenants.
• A qualifying tenant that is in a sub-tenancy arrangement is also eligible if the lease structure meets program criteria.
• A qualifying landlord can apply for all qualifying tenants at once, in which case it will need to provide attestations for each qualifying tenant.
• A qualifying tenant that has multiple locations with multiple qualifying landlords must work with each of its respective landlords that are applying for the program.

 

Summary

Under a rent forgiveness agreement, which includes a moratorium on eviction, the mortgaged commercial property owner would reduce the small business tenant’s monthly rent by at least 75%. The tenant would be responsible for covering 25%, the property owner 25%.

 

Québec Enhancement of CECRA Program (June 8, 2020)

On June 8, 2020, the Québec government announced an investment of approximately $140 million to compensate Québec commercial property owners for their reduction of rental revenues as a result of the CECRA program.

In order to encourage the participation of Québec commercial landlords to participate in the CECRA program, Québec will fund half of the landlord’s 25% contribution under the federal program. Consequently, Québec landlords will receive an amount equal to 12.5% of the total rent from Quebec, reducing their rent reduction from 25% to 12.5%.

 

Rent	100 %
Less: Federal  loan/subsidy  (CERCA)	– 50 %
Less: Tenant portion of rent paid	–  25 %
Landlords rent reduction	25 %
Less: Québec subsidy	– 12.5 %
Net rent reduction for landlord	12.5 %

 

 

Extension of the CERCA to end of July 2020  (July 7, 2020)

Property owners and small business tenants will soon be able to access funding for the month of July.

To qualify under the expanded eligibility criteria: 

• Only those tenants approved in the April, May and June application are eligible for the July extension.

• If a business had an average revenue decline of 70% or more in April, May and June, they are deemed eligible for the additional month of rent relief. However, not all tenants in the original application need to be included for the July extension.

 

 

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GST/HST/QST Remittance Deferral

Goods and Services Tax/Harmonized Sales Tax (GST/HST) remittances and customs duty payments are deferred to June 30, 2020.

The GST/HST amounts collected are generally due by the end of the month following the vendor’s reporting period: e.g., for a monthly filer, the GST/HST amounts collected on its February sales are due by the end of March.

The Minister of National Revenue will extend until June 30, 2020, the time that:

• Monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods;
• Quarterly filers have to remit amounts collected for January 1, 2020, through March 31, 2020 reporting period; and
• Annual filers, whose GST/HST return or instalment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.

Businesses in need of information about their particular obligations may contact the Canada Revenue Agency or refer to its website.

Québec is following the federal government’s lead and allowing businesses to postpone filing until June 30, 2020, their returns and payments in respect of the March 31, April 30 and May 31 QST remittances, without interest or penalties.

 

 

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Deferral of Customs Duty and Sales Tax for Importers

Imported goods by businesses are generally subject to the 5% GST, as well as applicable customs duties, which vary by product and country of origin. While the vast majority of imports enter Canada duty-free, some tariffs remain, especially on consumer goods.

Typically, payments owing for customs duties and the GST on imports are due before the first day of the month following the month in which the Statements of Accounts are issued.

Payment deadlines for statements of accounts for March, April, and May are being deferred to June 30, 2020.

Businesses in need of information about their particular accounting and payment obligations on imported goods may contact the Canada Border Services Agency for more details.

 

 

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CERB – Canada Emergency Response Benefit

Federal government extends the CERB program (Announced June 16, 2020) – See below 

 

The benefit:

$2,000 per month paid monthly 

• Maximum: 16 weeks

 

This benefit applies to:

• Employees who have lost their job because of the pandemic, are sick, quarantined, working from home without pay because of school closures or caring for someone who is sick with COVID-19.
• Contract or self-employed individuals are eligible
• Workers must cease work for 14 consecutive days before they are eligible for this payment. They do not need to be laid off or terminated. They can remain as employees, but just not be paid.

 

Workers become ineligible if they receive:

• Employment income
• Self-employment income
• EI benefits
• QPIP benefits (maternity/paternity/parental benefits)

When submitting subsequent claims, one cannot have earned more than $1,000 in employment and/or self-employment income for the entire four-week benefit period of your new claim.

 

Duration, payments, and applications

• Applications will open early April (goal Apr 6)
• Payments will start 10 days after applications received
• Eligibility period: March 15 to Oct 3, 2020

 

Interaction with EI

• Individuals who have made claims for EI that have not been processed will not have to reapply for the CERB. Their applications will automatically roll-over to the CERB.
• Individuals who became eligible for EI prior to March 15, 2020, will be processed under EI, through the pre-existing rules.
• Claims filed by individuals who become eligible for EI sickness benefits or EI regular benefits on or after March 15, 2020, will be processed under the CERB.
• Individuals who have access to the CERB will be paid $2,000 for every 4-week period ($500/week) regardless of the amount they may have been eligible to receive through EI.
• Individuals retain their EI eligibility after they stop receiving and/or exhaust the CERB. Prior receipt of the CERB will not impact their EI entitlement.

 

Tax Treatment

The CERB is taxable in the hands of recipients.

However, taxes will not be deducted from the CERB at source; recipients will be expected to report the CERB as income when filing their income tax returns for the 2020 tax year.

 

Would I qualify for CERB if I get a salary or dividend from my corporation?

If you terminate the salary from your corporation, yes you might be covered.

 

Important update: April 6, 2020:

• If you draw dividends from a CCPC, it could be considered towards $5,000 eligibility requirement.
• If you received $5,000 or more in dividends from a Canadian Controlled Private Corporation which is paid out of income on which taxes are paid at the small business income tax rate [“non-eligible dividends”] you qualify for CERB. 

 

How to apply

The CERB is being jointly delivered by Service Canada and the Canada Revenue Agency.

Please read these questions and answers for more details. To apply:

 

Thinking about your main source of income in the last year – were you an employee or self-employed?

I was self-employed: apply for the CERB through the CRA

I was an employee: apply for the CERB through Service Canada and the EI program

 

 

CERB Extension (June 16, 2020) 

The government announced that it will extend eligibility for the Canada Emergency Response Benefit (CERB) by eight weeks.

Accordingly the CERB will run until October 3, 2020 (previous: July 3, 2020).

This extension will result in benefits being available for eligible workers for up to 24 weeks. Applications will be accepted until December 2, 2020.

CERB applicants for the new phase are required to sign an attestation acknowledging that they are looking for work and have consulted the government’s job bank.

The CERB extension is proposed in Bill C-17which is not yet law.

The proposed changes also include:

• Allowing individuals to claim for two-weeks if they are quarantined or caring for someone diagnosed with COVID and cannot work.
• Denying eligibility to individuals who do not return to work at their employer’s request when it is reasonable to do so, or decline a reasonable job offer if they can work.

 

 

Assistance line for CEWS and CERB questions: 1-833-966-2099

 

 

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Investissement Québec (IQ) Supporting Financial Market Liquidity

 

For more information about Investissement Québec’s support, click here [English]. 

For more information about Investissement Québec’s support, click here [French]. 

 

IQ has introduced the “Programme d’action concertée temporaire pour les entreprises” (PACTE).

This new emergency funding measure provides support for businesses affected by the repercussions of COVID-19.

Eligible Businesses

This financial assistance is available to businesses operating in Québec, including cooperatives and other social economy enterprises with commercial activities.

Eligible businesses are those that find themselves in a precarious situation and temporary difficulty as a result of COVID-19. They must show that their financial structure offers realistic prospects for profitability.

Eligible Projects

• Businesses must show that their cash flow issues are temporary and that the liquidity shortage stems from:
• A problem involving the supply of raw materials or products (goods or services)
• An inability, or a substantially decreased ability, to deliver goods, products or services
• Applications will be reviewed on a case-by-case basis, according to the business’s circumstances and Investissement Québec’s management practices.

 

Eligible Industries

All industries are eligible, except for the following:

• Weapons manufacturing or distribution
• Games of chance and gambling, combat sports, bars, racing, and other similar activities
• Production and sale of tobacco and drugs along with services related to their use, except for projects involving pharmaceutical-grade products approved by Health Canada and has a DIN, or their ingredients, as well as R&D projects licensed by Health Canada
• Any activity whose main purpose is protected by the Canadian Charter of Rights and Freedoms (religion, politics, human rights advocacy, etc.)
• Any other activity that may offend public morals

 

Details of Financial Assistance

• A loan guarantee is the preferred form of financing. Financing can also take the form of a loan from Investissement Québec.
• Investissement Québec aims to work in close cooperation with financial institutions and federal authorities to share risks
• The minimum funding amount is $50,000.
• Refinancing is prohibited.
• This measure is designed to shore up the business’s working capital.

 

 

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Québec Incentive Program to Retain Essential Workers (IPREW)

The Québec government introduced a financial assistance program for individuals workingessential jobsduring the COVID-19 pandemic.

The assistance amount will make up the difference between the Canada Emergency Response Benefit (CERB) and an eligible individual’s wages.

Eligible workers can apply for the program online beginning on May 19. The program provides $100 for each week of qualifying work beginning March 15, 2020, and extending for a maximum of 16 weeks.

This means that, in addition to their wages, a worker could receive a taxable benefit of $400 per month, for a total of $1,600 for the full 16-month period. Payments will be made every two weeks starting on May 27, 2020.

 

Eligibility

To be eligible under the program, you must:

• Work part-time or full-time in one of the essential service sectors during the program period;
• Receive gross wages of $550 or less per week;
• Have an annual employment income of at least $5,000;
• Have a total annual income of no more than $28,600;
• Be at least 15 years old when you apply for assistance under the IPREW; and
• Have been resident in Québec on December 31, 2019, and plan to reside in Québec throughout 2020.

 

How to apply for assistance as an eligible worker

You can apply for the IPREW online in the period from May 19 to November 15, 2020.

 

To apply:

• Register online now for My Account for individuals,
• Direct deposit(if you are already registered, make sure the banking information on file is up to date).
• Starting May 19, 2020, use theApply for the Incentive Program to Retain Essential Workers online service. Note that the first payment should be made on May 27, 2020.

 

 

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Montréal – Small Business Support Program

This initiative is supported by Québec’s Ministère de l’Économie et de l’Innovation du gouvernement du Québec, which has allocated $40 million to the Montréal agglomeration in the form of a loan to assist small businesses in all sectors of activity.

This assistance is available to all Montréal businesses that are temporarily closed or likely to close as well as those that are trying to maintain or resume their operations during this crisis.

All Montréal companies, including social economy businesses such as co-ops and nonprofits that carry out market activities, can take part in this program.

The money will be distributed through the PME MTL network, Montréal’s business assistance network.

It will take the form of a loan of $50,000 maximum at a 3% interest rate after the six-month moratorium. The city will assume interest fees incurred during the first six months of the loan.

Due to the crisis situation, companies will have a 36-month payback period, excluding the moratorium, to reimburse their loan. Under exceptional circumstances, this payback period can be extended to up to 60 months.

Registration

Montréal companies can find out about terms and conditions on the Emergency Fund page (in French) of the PME MTL Web site. 

 

 

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Montréal – Small Businesses Assistance (June 8, 2020) 

On June 8, 2020 the Québec government and the Mayor of Montréal announced an additional $50 million of assistance to support Montréal businesses.

Through the Regional Relief and Recovery Fund (RRRF), the federal government plans to grant up to $30 million aid for Montréal businesses that are not eligible for the other federal measures related to COVID-19 that are already in place.

The Québec government is contributing $20 million to the fund for the City of Montréal under the Aide d’urgence aux petites et moyennes entreprises program to come to the assistance of the Montreal SME’s facing financial hardship due to COVID-19.

The City of Montréal’s business support network, PME MTL, will administer these funds.

 

 

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Canadian Bankers Association (CBA) – Mortgage Deferral Plan

The Canadian Bankers Association announced that the six Canadian major banks have introduced programs to offer deferral of mortgage payments.

Customers impacted economically by the COVID-19 can apply for mortgage relief to their respective banks.

A mortgage deferral implies an interruption of payments in this period of time, during which interest which would otherwise be part of the deferred payments is added to the outstanding balance of the mortgage. The added interest is incorporated into the monthly payment, either when payments resume at the end of the deferral period or upon renewal at the end of the mortgage’s term.

 

For more information directly from the banks, please visit:

• Bank of Montréal (BMO)
• Canadian Imperial Bank of Commerce (CIBC)
• National Bank of Canada (BNC) 
• Scotiabank 
• Royal Bank of Canada (RBC)
• TD Canada Trust