COVID 19: Financial Resources Available for Businesses and Individuals Across Canada

This blog was originally published on March 20, 2020. Co-authored with the assistance of Jessica Hoskins, summer law student.

COVID-19 has had an immediate and drastic effect on the Canadian economy.

We have compiled the following summary of the federal resources and financial assistance that is presently available, which you may wish to consider as you prepare to mitigate the impact of COVID-19 on your organization.

The resources listed below can be divided into the following categories:

  1. Financial Resources for Businesses
  2. Resources Specific to First Nations, Inuit and Métis Businesses
  3. Legislative Changes and Other Supports
  4. Resources Available to Individuals

Financial Resources for Businesses

A federal economic aid package worth $82 billion was unveiled on March 18, 2020 to help Canadian workers and businesses weather the COVID-19 storm. Additional information about the measures that are included can be found below. Information about the entire aid package can be found via the Department of Finance news release.

Further resources and programs that have been announced throughout April, May and June are set out below.

Financial resources available to businesses across Canada:

  • Regional Relief and Recovery Fund (RRRF): this Fund targets businesses that do not qualify for other COVID-19 support measures. Eligible businesses can receive a conditionally repayable contribution of up to $40,000, with repayment of 75 per cent, or up to $30,000 of the contribution, on or before December 31, 2022. There are no scheduled monthly repayments until after December 31, 2022. Businesses can apply to the RRRF through their relevant Regional Development Agency, dependent on their location. For businesses in Western Canada, further information regarding the RRRF can be found here.
  • Large Employer Emergency Financing Facility (“LEEFF”): applications for LEEFF opened on May 20, 2020. Eligible applicants include companies with significant operations or workforces in Canada and annual revenues of $300 million or higher who are looking for financing of $60 million or more over the next 12 months. The full news release can be found here.
  • Canada Emergency Commercial Rent Assistance (“CECRA”): applications for CECRA opened on May 25, 2020 and will be accepted until the August 31, 2020 deadline. This program provides forgivable loans to qualifying commercial property owners, covering 50 per cent of three monthly rent payments for eligible small business tenants in April, May and June of 2020. The loans will be forgiven if the qualifying property owner agrees to reduce the tenants’ rent by at least 75 per cent under a rent reduction agreement, including a term not to evict the tenant while the agreement is in place. Although businesses renting in Parks Canada places are not eligible for CERCA, as of June 1, 2020, Parks Canada will be contacting all holders of commercial leases and licenses in national parks, national historic sites and national marine conservation areas to provide details of similar relief being offered. Read here for more detailed information on CECRA eligibility, application and administration.
  • Canada Emergency Wage Subsidy: On June 15, 2020, the Federal Government announced that this subsidy will be extended to August 29, 2020. The subsidy was originally introduced on April 11, 2020, when Bill C-14, A second Act respecting certain measures in response to COVID-19, was passed by Parliament, setting out the rules for the new Canada Emergency Wage Subsidy. More information on eligible employers and how eligibility is determined can be found here.
  • Relief for Federally Regulated Pension Plan Sponsors: on April 15, 2020, the Federal Government announced that it would provide relief to sponsors of federally regulated, defined benefit pension plans. This relief will be in the form of a moratorium, through the remainder of 2020, on solvency payment requirements for defined benefit plans. More information can be found here.
  • Business Credit Availability Program (BCAP) will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $65 billion of additional support, largely targeted to small and medium-sized businesses. BDC and EDC are co-operating with private sector lenders to co-ordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation and tourism. The program includes:
    • Canada Emergency Business Account (CEBA): the CEBA provides zero-interest, partially forgivable loans up to $40,000 to small businesses that have experienced diminished revenues due to COVID-19, but face ongoing non-deferrable costs such as rent, utilities, insurance, taxes, and employment costs. Twenty-five per cent of this loan is forgivable if repaid by December 31, 2022. The CEBA was initially designed to allow for rapid deployment of credit to businesses with 2019 payroll between $50,000 and $1 million, but on May 20, 2020 the government expanded the eligibility parameters of the program, by increasing the payroll eligibility range to between $20,000 and $1.5 million.
    • Apply through your financial institution today.
  • Small and medium-sized Enterprises (SME) Loan and Guarantee Program:
    • EDC is working with financial institutions to co-lend term loans to businesses for operating cash flow. Eligible businesses may obtain incremental credit amounts of up to $6.5 million, 80% of which would be provided by BDC.
    • EDC will also provide funding to financial institutions so that they can issue new operating credit and cash flow term loans of up to $6.25 million to small and medium-sized businesses. These loans will be 80 per cent guaranteed by EDC, to be repaid within one year.
    • Eligible companies could obtain up to $12.5 million through these two lending streams.
    • This support is available until September 30, 2020. Apply through your financial institution.
  • Mid-Market Financing Program: On May 11, 2020, the Federal Government announced it would be expanding the BCAP to mid-size companies whose credit needs are greater than what is currently available. The Mid-Market Financing Program will provide commercial loans of between $12.5 million to $60 million to qualifying companies with annual revenues of more than $100 million. More information will be available through BDC in the coming weeks.
  • Mid-Market Guarantee and Financing Program: On May 11, 2020, the Federal Government announced it would be expanding the BCAP to bring liquidity to companies with revenues between $50 million to $300 million. These expanded guarantees will be available to exporters, international investors and businesses selling their services within Canada. More details will be made available through BDC in the coming weeks.
  • Export Development Canada (EDC): EDC provides insurance and financial services, bonding products and small business solutions to Canadian exporters and investors and their international buyers.
  • Emergency Support Fund: On April 17, 2020, the Federal Government announced $500 million in funding to establish the COVID-19 Emergency Support Fund for Cultural, Heritage and Sport Organizations. The Fund will be administered by Canadian Heritage and divided amongst selected programs and agencies. Learn more about this fund here.
  • Bank of Canada: The Bank of Canada is announcing its intention to launch the Bankers’ Acceptance Purchase Facility (BAPF). The Bankers’ Acceptance market is one of Canada’s core funding markets and a key source of financing for small and medium-size corporate borrowers. Starting the week of March 23, the Bank will conduct secondary market purchases of one-month Bankers’ Acceptances issued and guaranteed by any Canadian bank and of sufficiently high quality, broadly equivalent to a minimum short-term credit rating of R-1 (low). Additional details to follow.
  • Flexibility for Taxpayers: Several measures have been implemented by the Canada Revenue Agency (CRA) to assist taxpayers. Most of these measures are applicable to individuals only, but the following measures are applicable to businesses as well:
    • the due date for any payments owed to the CRA by all taxpayers is deferred to August 31, 2020, with no interest or penalties;
    • the CRA will not contact any small or medium businesses to initiate any post-assessment GST/HST or Income Tax audits for the next four weeks;
    • effective immediately the CRA will recognize electronic signatures as having met the signature requirements of the Income Tax Act, as a temporary administrative measure; and
    • the Liaison Officer service offers help to owners of small businesses to understand their tax obligations. Traditionally available in-person, this service is now available over the phone.
    • for more information, read our Federal Government Grants Tax Relief Resulting From COVID-19 blog.
    • You can also read more about the response by the CRA and the Tax Court of Canada here.
  • Financial Relief programs being offered by lenders:
    • Bank of Montreal, CIBC, TD Canada, National Bank of Canada, RBC Royal Bank and Scotiabank have announced new plans which will help those effected by the financial consequences of COVID-19. Each of the 6 banks have announced that they will be allowing the deferral of mortgage payments for up to six months.  Details on the specific plans of each of the banks can be found below.
    • BMO
    • CIBC
    • TD Canada
    • National Bank of Canada
    • RBC
    • Scotiabank
    • Servus Credit Union
    • Manulife

Resources Available for First Nations, Inuit and Métis Businesses

  • Announced on April 18, 2020, the Federal Government will be providing $306.8 million in short-term, interest-free loans and non-repayable contributions to help small and medium-sized First Nations, Inuit and Métis businesses. This support will be provided through Aboriginal Financial Institutions. Small and medium-sized Indigenous businesses can receive up to $40,000. Learn more about this here.

Legislative Changes and Other Supports

  • The Standards for Work-Integrated Learning Activities Regulations were announced on July 8, 2020 and will come into force on September 1, 2020. These regulations built on the Federal Government’s commitment to protect young workers and ensure youth can develop the skills and practical experience they need to find good jobs in the future.
  • Essential Services Contingency Reserve (ESCR) was announced on July 21, 2020 and will begin operations on August 3, 2020, when you may register your organization. Through the ESCR, eligible essential service businesses and organizations can apply to bridge urgent, short-terms gaps in their supplies and receive personal protective equipment, non-medical masks and disinfection products on a cost-recovery basis. View eligibility criteria here..
  • Layoff Periods Extended for Federally-Regulated Employers: On June 23, the Federal Government announced changes to the Canada Labour Standards Regulations under the Canada Labour Code to assist federally-regulated employers impacted by COVID-19. More information about changes to these temporary layoff provisions can be found here.
  • Personal Protective Equipment Supply Hub was announced on June 9, 2020. The hub consists of available resources for organizations that are buying or selling personal protective equipment (PPE). Businesses can find PPE supplier lists, consumer guidance, resources on best safety practices, purchase guidance, recent COVID-19 information, and much more. Access the Hub here.
  • Business Resilience Service was announced on May 25, 2020. This is a four-week bilingual hotline service designed to help entrepreneurs, small business owners, charities and not-for-profit organizations by providing financial planning advice. This hotline may be extended, depending on demand and progress made regarding COVID-19. Call 1-866-989-1080 (toll-free) seven days a week from 8 a.m. to 8 p.m. (ET) to access the hotline.
  • Changes to Work Restrictions for International Students: on April 22, 2020, the Federal Government announced that it would be relaxing work restrictions on international students working in an essential service or function. More information can be found here.
  • Changes to the Temporary Foreign Worker Program for the Agriculture Industry: Modifications have now been made to the Temporary Foreign Worker Program (the “TFWP”) and various travel restrictions to better allow access to foreign workers. More information can be found here.
  • Support for Canadian Journalism: on April 17, 2020, the Federal Government clarified its plan for providing support for Canadian Journalism. Changes include the establishment of an advisory board to assist the government in administering tax measures directed toward the journalism sector, and expansion of eligibility for the Canadian journalism labour tax credit, among other things. More information can be found here.
  • Canada’s Plan to Mobilize Industry was announced by the Federal Government on March 20, 2020. The plan will redirect many streams of government funding to fighting the pandemic. Canadian manufacturers or businesses with equipment or facilities that can be rapidly re-tooled to meet medical needs can respond through a portal on the Government’s website.
  • Work-Sharing Program: The Work-Sharing Program is implementing temporary special measures to support employers and employees affected by the downturn in business caused by COVID-19. The maximum duration of the Work-Sharing Program has been extended from 38 weeks to 76 weeks.
  • Air Transportation Sector Lease Waiver: the Federal Government is also waiving ground lease rents from March 2020 through to December 2020 for the twenty-one airport authorities that pay rent to the Federal Government.
  • Business Development Canada (BDC): Learn more about additional financing through BDC, including small business loans, working capital loans and purchase order financing. BDC also has free template business continuity plans and templates for entrepreneurs to use to help mitigate the impacts of COVID-19. For more information and to view available plans, see BDC’s Business Continuity Guide.
  • Farm Credit Canada: The near-term credit available to farmers and the agri-food sector will also be increased through Farm Credit Canada due to an additional $5 billion in funding from the Federal Government. Learn more about applying for financing through FCC.

Resources Available to Individuals

    • Support for Seniors: The Federal Government announced that seniors who are eligible for the Old Age Security pension, the Guaranteed Income Supplement or Allowances will receive a one-time, tax-free payment the week of July 6, 2020 without needing to apply.
    • Canada Emergency Response Benefit (CERB): On June 16, 2020 the Federal Government announced that the CERB will be extended for eight weeks (two months) for those who still cannot work despite provinces and territories gradually reopening their economies. Initially announced on March 25, 2020, the CERB replaces the previously announced Emergency Care Benefit and the Emergency Support Benefit. The CERB is a taxable government payment meant to help those grappling with job loss or other circumstances that have resulted is sudden loss of income due to the COVID-19 pandemic. It offers $2,000 per month for up to four months.
    • Canada Emergency Student Benefit (CESB): announced on April 22, 2020, the CESB is available to post-secondary students. From May to August 2020, the CESB offers $1,250 for each 4 week period or, if you have dependents or a disability, $2000 for each 4 week period. To be eligible for the CESB, you must actively be looking for work. You cannot apply for CESB if you have applied for CERB or EI.
    • Employment Insurance Sickness Benefit: For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the one-week waiting period for Employment Insurance (EI) sickness benefits is waived for those individuals in imposed quarantine that claim, and the requirement to provide a medical certificate to access EI sickness benefits is also waived. Learn more about the benefits.
    • Flexibility for Taxpayers: in addition to the measures listed above, which are available for businesses, the due date for 2019 tax returns for individuals has been deferred to June 1, 2020 (effective immediately).
    • GST Credit: if you normally receive the GST/HST credit and have filed a 2018 tax return, an additional GST credit was issued on April 9, 2020. If you were previously not eligible for this credit, but filed your 2018 tax return, you may also get a one-time credit based on your families net income. This one-time payment will be calculated based off your 2018 tax return. More information on this credit can be found here.
    • Canada Child Benefit (CCB): the Federal Government has increased the CCB due to COVID-19. If you received the benefit in April, 2020, you will receive an additional $300 per child in your May, 2020 instalment. This is a one-time increase. Further, due to the tax filing date extension, individuals who receive the CCB will continue to receive these payments until the end of September, 2020.
    • Deferral of Student Loan Payments: From March 30 to September 30, 2020, the Federal Government has suspended repayments on Canada Student Loans and Canada Apprentice Loans. Further, no interest will accrue on student and apprentice loans.
    • The Enabling Accessibility Fund (EAF) Youth Innovation Component was announced on June 4, 2020. This EAF challenges youth between 15 and 30 years of age to volunteer and collaborate with their local community-based organizations to remove accessibility barriers in their communities. Youth can apply for up to $10,000 of funding until October 30, 2020.

We foresee many difficult and challenging circumstances arising from the spread of COVID-19 on our clients, and we are here to help you navigate these circumstances.  In the above article, we have attempted to outline some of the more recent developments which have been implemented to assist businesses and individuals, but this list is not exhaustive, and there may be further options available to you. If you have questions relating to your organization’s specific circumstances, please reach out to MLT Aikins for assistance.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.