In this article, we will continue with the new set of financial support measures that the Government has put in place to facilitate the running of Canadian small businesses.
Schemes to prevent lay-offs and facilitate re-hiring:
- Canada Summer Jobs
The COVID-19 crisis has left many young graduates stranded. With small businesses temporarily shut down, the labour market is very slow. This is why the Government of Canada has brought out the Canada Summer Jobs scheme to:
- Provide work experience for youth.
- Improve access to the labour market for 70,000 youths between 15 and 30 years of age.
- Give opportunities for youth to develop and improve their professional skills.
Eligible employers can apply for the scheme here.
How much wage subsidy will employers receive?
All public & private companies operating out of Canada and who are providing jobs under the Canada Summer Jobs scheme will receive a wage subsidy reimbursement of up to 100% of the provincial or territorial minimum hourly wage.
What types of jobs can employers provide?
Canadian small businesses can offer
- Part-time placements – fewer than 30 hours per week for at least six weeks.
- Full-time placements – higher than 30 hours per week for at least six weeks.
By when should employers fill job postings?
Small businesses may offer job placements between May 11th, 2020 and February 28th, 2021. Employers can also offer part-time employment to youth who want to work during their academic cycle.
Job activities to be performed as part of the scheme
The Government has given employers complete freedom to alter their operations and job activities to provide critical services that are necessary during the COVID-19 period.
These alterations and adjustments to job postings include:
| Positions | Previous arrangements | Potential adjustments |
| Community programming | In-person activities | The use of digital tools for the delivery of programming |
| Service industry | In-person service | Take-out and delivery |
| Administrative positions | In-person activities | Remote and telework options |
| Support for vulnerable populations | Current activities | New activities to support those who are facing new vulnerabilities under COVID-19 |
| Retail services | In-person/in-store roles | Remote and delivery roles |
Credit access schemes:
- Canada Emergency Commercial Rent Assistance (CECRA)
The Canada Emergency Commercial Rent Assistance (CECRA) is a scheme by the Government of Canada that seeks to reduce the financial burden faced by small businesses by providing rent subsidies. According to the scheme, 75% of the rent by COVID-19 affected companies will be lowered.
What are the inclusions of the scheme?
CECRA will provide qualifying Canadian commercial property owners
- Forgivable loans to cover 50% of three monthly rent payments for April, May, and June 2020.
Requirements for qualification
Small businesses who can apply for CECRA are
- Public, private, non-profit, and charitable organizations operating out of Canada.
- Companies paying less than $50,000 per month in rent.
- Companies who have experienced a 70% drop in revenues due to COVID-19.
- Companies who are being forced to shut down because of COVID-19.
Duties of a commercial property owner towards their renters
If a qualifying owner applies for the scheme, they are mandatorily required to
- Reduce 75% of the rent owed by their renters for the same three months cycle under a rent forgiveness agreement.
- Not evict their renters during the term of the agreement.
- Seek only up to 25% of the rent for the three months-cycle.
Please note: For the 75% rent reduction, the property owner will need to bear 25% of the rent as part of the rent forgiveness agreement, and they are eligible to seek 50% of the payment from the Government.
- Rural Businesses and Communities
Rural businesses and small communities in Canada are in dire need of financial support. It is for this reason that the Government of Canada has created the Rural Businesses and Communities financial support scheme.
Under this scheme, the national network of Community Futures Development Corporations will get $287 million as financial assistance.
- Assisting Innovative and Early-Stage Businesses
The Assisting Innovative and Early-Stage Businesses scheme has been created specifically to help start-ups stay afloat during COVID-19.
As part of the scheme, small businesses will get:
- $250 million as financial support to start-ups unable to access other Government COVID-19 aid schemes.
- Access to mentoring, advice and network building support through the Industrial Research Assistance Program (IRAP).
Who is eligible for this scheme?
- Early stage start-ups in Canada.
- Canadian small and medium-sized businesses developing commercialized technologies.
- Regional and national organizations that support small/medium-sized businesses develop commercialized technologies.
Programs by the National Research Council of Canada that start-ups can apply for
- NRC IRAP
The NRC Industrial Research Assistance Program is working with Innovative Solutions Canada to stimulate technological developments and solutions that can help Canada and the world overcome COVID-19.
Any start-ups with product ideas or research proposals can apply. The program will:
- Provide data on prevailing COVID-19 challenges.
- Offer Phase 1 funding to companies that submit promising solutions with Proof of Concept.
- Award Phase 2 funding to selected companies to develop their POCs into prototypes.
You can apply for the program here.
- The Pandemic Response Challenge Program
The NRC Pandemic Response Challenge Program has been created to encourage Canadians to come up with solutions to address the COVID-19 pandemic.
As part of the program, the NRC has set up a fund of $15 million, which will be used to fund innovative projects in:
- COVID-19
- Disruptive healthcare
- Network security
- AI
Who is eligible to apply?
- Canadian and international universities
- Government departments
- Canadian small businesses
Interested individuals can apply using this link.
- Biomanufacturing Capacity at Royalmount
The NRC Biomanufacturing Capacity at Royalmount has been put in place to facilitate the development of quality COVID-19 vaccinations & therapies.
It is a $15-million fund that will finance the certification and compliance of companies with global Good Manufacturing Practices. The fund will also facilitate the scaling-up of operational capacities.
- Young Entrepreneurs
The Young Entrepreneurs financial support scheme has been implemented by the Government of Canada in conjunction with the Business Development Bank of Canada (BDC). It seeks to provide up to $20.1 million to Futurpreneur Canada to encourage entrepreneurial development during the COVID-19 era.
How are the funds distributed?
- Futurpreneur Canada will offer collateral-free loans up to $20,000 per business at very friendly rates.
- BDC will provide additional funding up to $40,000 to eligible entrepreneurs.
Who is eligible?
Entrepreneurs who
- Reside in Canada and operate out of Canada.
- Are between the ages of 18 and 39.
Terms of financing under the scheme
Futurpreneur Canada
- Funds: Up to $20,000
- Interest: + 3.75%
- Repayment cycle: Five years
- Year One payment: Interest-only payments
- Principal repayments: To be made in equal instalments with interest over the next four years.
- Early repayment penalty: Nil
- Fees: $15 monthly fee for every month during repayment + $50 fee during the disbursement
BDC
- Funds: Up to $40,000
- Interest: +5%
- Repayment cycle: Five years
- Year One payment: Interest-only payments
- Principal repayments: To be made in equal instalments with interest over the next four years.
- Outstanding principal: Can be pre-paid with the outstanding interest + indemnity equal to three months’ interest on the principal prepaid (indemnity is waived-off for 15% of the principal amount, only on the anniversary of the loan authorization date).
- Fees: $50 processing fee during the disbursement
- Small and Medium-Sized Business Unable to Access Other Support Measures
This small and medium-sized business COVID-19 financial support scheme has been put in place for those companies that have been unable to access any other financial assistance measures by the Government of Canada.
This scheme will be administered through Regional Development Agencies (RDA), and it seeks to provide:
- A cumulative fund of $675 million for small and medium-sized Canadian businesses.
- Funds worth $2,500 to $100,000 per business to be used to meet operational costs.
- Financial support provided for a maximum period of four months, retroactive to April 1st, 2020.
A new amendment to the scheme
The Government of Canada has announced an amendment to the existing RDA program rules:
- From April 1st, 2020, businesses can defer their payments for current contribution agreements with their RDA for three months.
Payment deferral schemes:
The COVID-19 pandemic has left many small businesses strapped for cash. The financial support schemes under this category are designed to give Canadian small businesses additional time to make their tax payments to the Government.
- More Time to Pay Income Taxes for Corporations
- Companies who had to file their taxes before June 1st, 2020, can now file their taxes on June 1st, 2020.
- Companies who had to pay their taxes before September 1st, 2020, can now pay them on September 1st, 2020 (this applies only to balances and installments under Part 1 of the Income Tax Act).
- Deferral of Sales Tax Remittance and Customs Duty Payments until June
This scheme applies to the Goods and Services Tax (GST) and Harmonized Sales Tax (HST).
- All GST/HST payments that needed to be paid before May 31st, 2020, can now be deferred until June 30th, 2020.
- All GST and customs duty payments for imported goods pertaining to the months of March, April, and May are eligible for deferred payment.
Schemes supporting self-employed individuals:
The schemes under this list cover all types of self-employed individuals, including
- Freelancers
- Independent contractors
- Temporary/seasonal workers
- Alternative schedule professional
- Canada Emergency Response Benefit (CERB)
The CERB financial support scheme provides a taxable benefit of $2,000 for self-employed Canadians for a period between 4 and 16 weeks.
Who is eligible for CERB?
- A citizen or permanent resident of Canada above the age of 15.
- Self-employed individual who is forced out-of-work due to COVID-19.
- A person who has not voluntarily quit his/her job.
- A person eligible for EI benefits.
- An Individual with a minimum income of $5,000 in 2019.
- Seasonal workers who have exhausted their EI regular benefits and cannot seek seasonal work due to COVID-19.
- Regular workers who have exhausted their EI regular benefits and cannot find employment due to COVID-19.
Under CERB, all eligible individuals can continue to earn up to $1,000 per month while collecting CERB financial aid.
- Deferral of Sales Tax Remittance and Customs Duty Payments until June
Any self-employed individual owing GST/HST can now
- Defer payments of GST/HST till June 30th, 2020.
- Defer payments of GST and customs duty payments for imported goods for the months of March, April, and May.
- More Time to Pay Income Taxes
Self-employed individuals who need to file and pay income tax to the Government of Canada can
- Defer the payment of income tax to after August 31st, 2020.
- Deferral pertains only to tax balances due and installments.
- No penalties will be applied to income tax payment deferral during the eligible period.
Schemes for indigenous businesses:
- Funding for Small and Medium-Sized Indigenous Businesses and Aboriginal Financial Institutions
This financial support scheme has been developed for Canada’s indigenous and aboriginal small businesses.
It offers short-term, interest-free loans and non-repayable contributions to companies that have been affected by COVID-19. Additionally, it supports Aboriginal Financial Institutions that offer indigenous SME funds by helping them finance loans.
The Government has set aside $306.8 million for this fund and aims to assist at least 6,000 indigenous-owned businesses.
The Government of Canada is in talks to implement many more financial support schemes for businesses in Canada. We will be updating our list of financial support schemes as and when they are announced. Keep an eye on our blog for the latest information.
To find COVID-19 support and other programs and services from the government, please go to this Government of Canada website: https://innovation.ised-isde.canada.ca/s/?language=en
