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Government programs available to support Canadian entrepreneurs through the coronavirus pandemic

Last updated: July 10, 2020

This page will be updated as new details on governmental supports for Canadian businesses impacted by COVID-19 become available.


Providing lines of credit and financial support to businesses

Business Credit Availability Program (BCAP)

BCAP will provide more than $10 billion of additional support to businesses experiencing cash flow challenges. The funds will be distributed through programs by the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).

How to access program: Businesses seeking support through BCAP should first contact their financial institutions for an assessment of their situation. Financial institutions will refer to EDC and BDC their existing clients whose needs extend beyond what is available through the private sector alone.

Working Capital Loans (offered through BDC)

  • Working capital loans of up to $2 million with flexible terms and payment postponements for up to 6 months for qualifying businesses; 
  • Postponement of payments for up to six months, free of charge, for existing BDC clients with total BDC loan commitment of $1 million or less
  • Reduced rates on new eligible loans

Co-Lending Program for SMEs (offered through BDC)

  • Up to $6.25 million for your operational cash flow requirements
  • Differing maximum finance amounts based on business revenues
  • 80% of financed amount provided by BDC and the remaining 20% by your financial institution
Details are being finalized, contact your financial institution for details.


Business Credit Availability Program (BCAP) Guarantee (offered through EDC)

  • Provides credit and cash flow term loans to small and medium-sized Canadian businesses in all sectors that were otherwise financially viable and revenue generating prior to the COVID-19 outbreak
  • Financial institutions can issue operating credit and cash flow term loans of up to $6.25 million to existing clients, with 80 per cent guaranteed by EDC
  • See list of the 38 financial institutions offering the BCAP Guarantee here
  • Please contact your financial institution for application details

Additional EDC Supports:

EDC also provides support through their insights, tools and advice offerings like Export Help Hub. Through a MyEDC account Canadian businesses can access free services and information. Standard EDC programs are also available to support Canadian companies with international trade.

Canada Emergency Business Account (CEBA)

Allow banks to give up to $40,000 in government-backed loans to most owner-operated small businesses, to help them cover their operating costs during this time when their revenues are temporarily reduced. There is zero interest on the loan until December 31, 2022, and repaying the loan by December 31, 2022 will result in forgiveness of up to 25% of the loan (up to $10,000). Contact your primary financial institution to apply.

Eligibility (updated on June 17):

  • The borrower has a federal tax registration and a business operating account at a participating financial institution
  • The Borrower’s total employment income paid in the 2019 calendar year was between $20,000 and $1,500,000. For applicants with $20,000 or less in total employment income paid in the 2019
    calendar year:

    • The Borrower has a Canada Revenue Agency business number and has filed a 2018 or 2019 tax return.
    • The Borrower has eligible non-deferrable expenses between $40,000 and $1,500,000. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. Expenses will be subject to verification and audit by the Government of Canada.
  • Additional requirements can be found here.

Innovation Assistance Program

  • Offered through the Industrial Research Assistance Program (IRAP)
  • IRAP IAP provides a wage subsidy to eligible employers for up to 12 weeks.
  • SMEs pursuing technology-driven innovation who have been unable to secure funding under the Canada Emergency Wage Subsidy (CEWS) are eligible and can apply for financial assistance under IRAP IAP.
  • Further eligibility criteria can be found here
  • Applications are open until Wednesday, April 29, 2020 at 11:59 pm EDT
  • IAP will begin making payments to successful applicants starting the week of May 11, 2020

Canada Emergency Commercial Rent Assistance (CECRA)

  • Forgivable loans to eligible commercial property owners so that they can reduce the rent owed by their impacted small business tenants by at least 75% for the months of April, May, June and July, 2020.
    • Government will offer a forgivable loan worth 50% of the value of the small business’ rent each month
    • The small business tenant will pay up to 25% of rent
  • Impacted small business tenants are businesses, including non-profit and charitable organizations who:
    • pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement),
    • generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level), and
    • have temporarily ceased operations (i.e. generating no revenues), or has experienced at least a 70% decline in pre-COVID-19 revenues on average for April, May and June.
  • For more information on eligibility, see here.
  • See June 30, 2020 update here.
    • The government is removing the requirement that the forgivable loan amount paid to property owners exclude non-repayable proceeds received by the property owner or tenant from existing rental support programs or other abatements, provided by any level of government, and insurance proceeds, if applicable.

Support for Indigenous-owned Businesses

  • Loans of up to $50,000 will be available to small and medium-sized businesses that are either ineligible for, or unable to access, existing federal and provincial COVID-19 response initiatives for small businesses.
  • Loans will be available through Aboriginal Financial Institutions.
  • Up to 50% of each loan will be in the form of a non-repayable grant, with no interest due on the loan portion until December 31, 2022.

The Regional Relief and Recovery Fund (RRRF)

  • Provides financial contributions (interest-free loans) to help support fixed operating costs of SMEs, where business revenues have been affected by the COVID-19 pandemic
  • The Fund, valued at more than $962 million nationally, is delivered by Canada’s six regional development agencies.

Southern Ontario

  • $213 million for SMEs facing financial pressure
  • Supports southern Ontario SMEs that do not qualify for, or have been declined for, current Government of Canada COVID-19 relief measures.
  • Applicants have two options:
    • Option 1 – Up to $40K conditionally repayable interest-free loan, repaying 75% on or before Dec 31, 2022, will result in forgiveness of up to 25% (or $10K).
    • Option 2 – Between $40K and $500K fully repayable, interest-free loan.
  • View additional program guidelines here.

View details for other regional development agencies: Northern Ontario, Atlantic Canada, Quebec, Northern Canada, Western Canada

Programs to help companies make payroll

Work-Sharing 

  • This adjustment program is designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. 
  • What’s new: The Government of Canada will enhance this program at an estimated cost of $12 million to help employers who are experiencing a downturn in business due to COVID-19, and their workers.

Features of the Work-Sharing (WS) program

  • A WS unit is a group of employees with similar job duties who agree to reduce their hours of work over a specific period of time
  • The unit needs to reduce their hours by the same amount and can share work
  • The unit must reduce their hours by 10% – 60%, and they can vary week to week as long as the average work reduction hours does not exceed 10% – 60%
  • A WS agreement has to be a minimum of 6 consecutive weeks long and can last up to 38 weeks. Employers may be able to extend their agreements up to a total of 76 weeks

Additional Resource: Webinar Recording: Understanding Canada’s Work-Sharing Program

Canada Emergency Wage Subsidy 

  • Provides eligible businesses a subsidy of 75% of employee wages for up to 24 weeks, retroactive from March 15, 2020, to August 29, 2020
  • Applications available through the Canada Revenue Agency’s “My Business Account” portal
  • Calculate your potential subsidy amount here.

Eligibility

  • You are an eligible employer if you have seen revenues decrease by 15% in March 15 to April 11 and 30% for following months due to COVID-19
  • The number of employees you have does not determine eligibility.
  • Eligible employers includes individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities.
  • See details on eligibility periods, and how revenue is calculated here.

May 15, 2020 update: Program extended by an additional 12 weeks, to August 29, 2020. The eligibility criteria will apply for the current period (period 4). Any potential changes would commence as of periods 5 (July 5 to August 1) and/or 6 (August 2 to August 29). More information about the announced CEWS extension to August 29 will be coming soon.

Additional resource: Webinar Recording: Understanding Canada’s Emergency Wage Subsidy

10% Temporary Wage Subsidy 

  • A three-month measure allows eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA)
  • 10% of the remuneration you pay from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee to a maximum of $25,000 total per employer
  • Note: this is a separate program from the Canadian Emergency Wage Subsidy

Eligibility

  • You are eligible if you are a Canadian-controlled private corporation (including a cooperative corporation) eligible for the small business deduction, an individual, partnership, non-profit corporation, or registered charity;
  • have an existing business number and payroll program account with the CRA on March 18, 2020; and
  • pay salary, wages, bonuses, or other remuneration to an eligible employee

For further information, please see this FAQ page.

Added flexibility for corporate taxes

  • T2 Corporation Income Tax Returns: The CRA will allow all businesses to defer T2 corporation income tax returns otherwise due in June, July or August, to September 1, 2020. As previously announced, any income tax balance due on or after March 18 and before September 1 will also be due by September 1, 2020.
  • The Liaison Officer service is now available over the phone to help owners of small businesses to understand their tax obligations. 

Direct wage support for employees 

Emergency Response Benefit (CERB) 

  • Taxable benefit would provide $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic
  • Canadians would begin to receive their CERB payments within 10 days of application
  • The CERB would be paid every four weeks and be available from March 15, 2020 until October 3, 2020. Update: The CERB program has been extended for an additional 8 weeks to August 29, 2020

Note: The CERB was announced on March 25,200 as a more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

See our article “How to apply for the CERB” for more details.

Who qualifies

  • Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.
  • Workers who are still employed, but are not receiving income because of disruptions to their work situation due to COVID-19, would also qualify for the CERB.
  • Individuals do not need to qualify for EI to receive this benefit. 
  • Individuals who are already receiving EI regular or sickness benefits as of today would continue to receive their benefits and should not apply to the CERB.

EI eligible Canadians who have lost their job can continue to apply for EI here, as can Canadians applying for other EI benefits.

Boost to Child Benefit payments

  • Increase to the Canada Child Benefit (CCB) for the 2019-20 benefit year, $300 per child

GST/HST Credit 

  • a tax-free quarterly payment that helps individuals and families with low and modest incomes offset all or part of the GST or HST that they pay. It may also include payments from provincial and territorial programs.

Support in assessing and navigating funding options  

Business Resilience Service

  • A national, bilingual hotline service operated by the Canadian Chamber of Commerce
  • Aim is to help entrepreneurs and small business owners in need of financial planning advice, particularly those who may not have access to an accountant
  • Open to small business owners with pressing financial needs can call seven days a week, from 8 a.m. to 8 p.m. (ET)
  • Call: 1-866-989-1080 (toll-free)

Regional Development Agencies

Canada’s Regional Development Agencies (RDAs) can assist small – or medium- sized businesses that need assistance:

  • Support in accessing federal funding programs
  • Advice and pathfinding services to other federal programs and services available. 

If you are already receiving RDA funding:

  • You may be eligible to receive additional funding and/or flexible arrangements.
  • Further support will be determined on a case-by-case basis as the situation evolves.

Directory of Canada’s Regional Development Agencies:

  • Atlantic Canada Opportunities Agency: 1-800-561-7862
  • Western Economic Diversification Canada: 1-888-338-9378
  • FedNor: 1-877-333-6673
  • Canadian Northern Economic Development Agency: 1-855-897-2667
  • FedDevOntario: 1-866-593-5505
  • Canadian Economic Development for Quebec Regions: 1-866-385-6412

Active Funders in Canada List

Hockeystick has compiled a list of active funders – broken down by type of funding: equity, lenders, government and programs.

 

Further Resources: