Financial Support Guide for Canadian Businesses affected by COVID-19

Updated: April 27, 2020 The COVID-19 pandemic has brought economic hardships to all Canadians, but it is within the small business community where these disparities […]

By tori
April 28 2020
Business Resources

Updated: April 27, 2020

The COVID-19 pandemic has brought economic hardships to all Canadians, but it is within the small business community where these disparities are the most impactful. Small businesses are particularly vulnerable to layoffs, increased debt, and potential foreclosures. And yet, as reported in 2017, they represent 97.9% of the 1.18 million employer businesses in Canada. 

Simply put, small businesses are the backbone of our economy which is why it’s important to support them as much as possible during this difficult time.  For us, getting small business owners the information they need to acquire financial support is just one of the ways we can help. 

Below, we have consolidated and compiled various support options from the Government of Canada’s COVID – 19 economic response plan for businesses. More detailed information can be found on their site. We will be checking the Government of Canada’s website regularly and updating any resources as they are announced. 

If you would like to be notified with updates we welcome you to sign up for our newsletter here. 

If you would like to get the word out about a discounted/free service that can help other businesses please let us know by emailing tori@workhaus.ca.

Avoiding layoffs and rehiring employees

Canada Emergency Wage Subsidy (CEWS)

  • For any employers who have suffered a drop in gross revenues of at least 15% in March, and 30% in April and May.
  • Subsidy covers 75% of an employee’s wages up to $847 per week
  • Program in place from March 15 – June 6
  • Eligible employers are entitled to receive a 100% refund for certain employer contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan
  • Applications will be open April 27

Temporary 10% Wage Subsidy

  • Three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA).
  • Subsidy is equal to 10% of the remuneration you pay from March 18, 2020 to June 19, 2020 for each eligible employee to a maximum of $25,000 total per employer.
  • This subsidy is calculated when you remit these amounts to the CRA.
  • Any benefit from this subsidy for remuneration paid in a specific period will generally reduce the amount available to be claimed under the CEWS in that same period.
  • How to calculate the subsidy amount

Work-sharing (WS) Program

  • Program provides Employment Insurance (EI) benefits to eligible employees who agree to reduce their normal working hours and share the available benefits while their employer recovers.
  • Extension of the program maximum duration to 76 weeks
  • Application forms and information

Business Credit Availability Program (BCAP)

1. Canada Emergency Business Account (CEBA)

  • Provides credit for small businesses and not-for-profits to pay for immediate operating costs such as rent, payroll, utilities, insurance, property tax, or debt service.
  • Available to Canadian employers with $20,000 to $1.5 million in total payroll in 2019, and operating as of March 1, 2020.
  • Under CEBA, financial institutions will be able to provide interest-free credit facilities of up to $40,000 to eligible businesses.
  • If the loan is repaid by December 31, 2022, 25% (up to $10,000) will be forgiven.
  • If the loan is not repaid by December 31, 2022, the remaining balance will be converted to a three-year term loan at 5% interest.
  • Contact your primary lender to apply.
  • Learn more about the Canada Emergency Business Account.

2. Loan Guarantee for Small and Medium Enterprises

  • Export Development Canada (EDC) is working with financial institutions to issue new operating. credit and cash flow term loans of up to $6.25 million to small and medium-sized enterprises.
  • Contact your primary lender to apply.

3. Co-Lending Program for Small and Medium Enterprises

  • The Business Development of Canada (BDC) is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirement.
  • Loans up to $312,500 to businesses with revenues of less than $1 million.
  • Up to $3.125 million for businesses with revenues between $1 million and $50 million.
  • Up to $6.25 million for businesses with revenues in excess of $50 million.
  • Loans would be interest-only for the first 12 months, with a 10-year repayment period.
  • Contact your primary lender to apply.
  • Learn more about the BDC Co-Lending Program for SMEs.

Canada Emergency Response Benefit (CERB)

  • Self- employed individuals can receive a taxable benefit of $2000 every 4 weeks for up to 16 weeks.
  • Recipients are allowed to earn up to $1000 a month while collecting their CERB payments.
  • Application and more information.

Rural Business Communities

Innovative and Early-Stage Businesses

The Canadian Government is investing $250 million to assist innovative, early-stage companies that are unable to access other COVID-19 business supports through the Industrial Research Assistance Program (IRAP).

1. The COVID-19 Challenges Procurement Program: NRC Industrial Research Assistance Program and Innovative Solutions Canada

  • This program will post challenges seeking near-to-market solutions from small and medium-sized businesses (fewer than 500 staff) that need financial support to refine and sell their product or solution to meet a COVID-19 related need.
  • To register and for more information.

2. The Pandemic Response Challenge Program: National Research Council of Canada

  • This program will build teams to address challenges requiring further research and development for solutions to meet COVID-19 related needs.
  • Funding is available to help cover the costs of research for academic institutions, small and medium-sized businesses, and other eligible recipients participating in the challenge teams.
  • To register or for more information. 

Young Entrepreneurs (Ages 18 – 39)

  • Providing $20.1 million in support for Futurpreneur Canada to continue supporting young entrepreneurs across Canada who are facing challenges due to COVID-19. The funding will allow Futurpreneur Canada to provide payment relief for its clients for up to 12 months.
  • For more information on how to apply, and repayment terms & fees

Small and Medium-sized businesses (unable to access other support measures)

Deferred payments

  • Businesses and self-employed individuals can defer, until after August 31, 2020, any income tax amounts that become owing on or after March 18 and before September 2020.
  • This relief would apply to tax balances due and installments.
  • No interest or penalties will accumulate on these amounts during this period 
  • Businesses and self-employed individuals can defer payments of GST/HST and customs duty owing on imports until after June 30, 2020.
  • All tax and payment dates.
  • More information on deferral of GST/HST tax remittances

Indigenous Businesses

  • Financial support for Indigenous businesses will be provided through Aboriginal Financial Institutions and administered by the National Aboriginal Capital Corporations Association and the Métis capital corporations in partnership with Indigenous Services Canada.
  • More information on financial support for Indigenous businesses.