Let’s face it. As of March 2020, the Canadian economy is in serious trouble. The OGWIA is closely watching the announcements of the response measures at all levels of government to help your businesses survive the tough time caused by COVID-19.
Canada Emergency Wage Subsidy (CEWS)
Eligibility: Individuals, partnerships, private corporations and Canadian non-profits and charities who are experiencing a decline in revenues due to the COVID crisis. Revenues will be compared monthly starting March 2020, to the revenues for the same time in 2019, or to the average of January and February 2020 revenue.
Amount: up to 75% of remuneration to $847 per week per employee.
Timing: Payments will be made within 6 weeks.
Deadline: The wage subsidy is retroactive and the application intake is continuous. The program ends in June 2021.
Canada Emergency Rent Subsidy (CERS) + Lockdown Support
Eligibility: Individuals, partnerships, private corporations and Canadian non-profits and charities who are experiencing a decline in revenues due to the COVID crisis, and were forced to shut down by the provincial, regional or municipal governments. Revenues will be compared monthly starting March 2020, to the revenues for the same time in 2019, or to the average of January and February 2020 revenue.
Amount: up to 65% of eligible rent, property tax, property insurance and mortgage interest expenses. Plus up to 25% of the above expenses if the business was forced to shut down. The maximum amount of eligible expenses is $75,000 per month.
Timing: Payments will be made within 6 weeks.
Deadline: The rent subsidy is retroactive and the application intake is continuous. However, all applications must be submitted within 180 days following the end of each eligible period. The program ends in June 2021.
Work Share Agreement
The program allows you to reduce employee working hours and remuneration by up to 50%, while the Employment Insurance pays a portion of the balance. The work share may be in place for up to 76 weeks.
Business Credit Availability Program (BCAP) Loan
It is a credit facility that will be provided by the financial institutions and crown corporations to the creditworthy Canadian companies. It is an interest-based loan focused on maintaining your cash flow. The maximum amount of loan is $6.25 million per applicant (of which up to $5 million is provided by the crown corporation) with flexible terms and payment postponements for up to 6 months.
Business Credit Availability Program (BCAP) Guarantee
It is a guarantee on your operating line of credit or term loan of up to $6.25 million. The program is offered by the traditional financial institution and credit unions in conjunction with one of the crown corporations.
Canada Emergency Business Account
It will provide interest-free loans of up to $60,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced. The loan will be provided by the traditional financial institutions in cooperation with the crown corporations. To qualify, these organizations will need to demonstrate they paid between $20,000 to $1 million in total payroll in 2019. Repaying the balance of the loan on or before Dec. 31, 2022, will result in loan forgiveness of 25% (up to $10,000). If you don’t qualify for Canada Emergency Business Account, you may qualify for Regional Relief and Recovery Fund provided by regional development corporations on similar terms.
Regional Relief and Recovery Fund
As part of Canada’s COVID-19 Economic Response Plan, the Regional Relief and Recovery Fund (RRRF) is providing over $1.5 billion in assistance to businesses and communities that may require additional support to cope with and recover from the pandemic.
The fund will help to:
mitigate the financial pressure experienced by businesses and organizations to allow them to continue their operations, including paying their employees; and support projects by businesses, organizations and communities to prepare now for a successful recovery.
Businesses and organizations that meet the following criteria may be eligible:
Canadian or provincially-incorporated businesses, co-operatives, partnerships or Indigenous-owned businesses with 1 to 499 full-time equivalent employees; Not-for-profit organizations that provide support services to business (e.g., business or sector organizations); Not-for-profit organizations, including social enterprises, that are engaged in commercial activities (e.g., conduct that is commercial in character such as selling, bartering or leasing); Facing funding pressures with fixed operating costs as a result of the COVID-19 pandemic;
Were operational prior to March 15, 2020; Are financially viable; Plan to continue to operate or resume operations; and Have an active business chequing/operating account
Other Funding and Recovery Opportunities
Your business may be eligible for Scientific Research & Experimental Development (SR&ED) and other Tax Credits, and Customs Duty Drawback if you paid the duties on the materials and parts. Please note, that you can obtain financing against your submitted SR&ED claim.
Avoid Bankruptcy and Protect Hard-Earned Assets
Don’t rush to shut the shop down and auction all assets if none of the above measures helped. The Federal Government regulates insolvency matters and there are programs to reduce the debt without bankruptcy. Team up with some experts before you go down this route.