In mid-March, Canada began rolling out a series of stimulus programs and relief packages for businesses and workers as the COVID-19 pandemic shuttered industry and drove jobless claims in that country near the one million mark. This legislation is referred to under the catch-all COVID-19 Economic Response Plan and includes support for individuals, businesses, and industries.

Canada is rolling out three major programs specifically for small and medium-sized businesses intended to support them to retain workers and find access to credit. Key programs for affected businesses include the following:

Canada Emergency Wage Subsidy

The Canada Emergency Wage Subsidy program is intended to prevent layoffs and furloughs by allowing by providing substantial payroll subsidies. The program provides a 75% wage subsidy (up to $847 per week) for eligible employers for up to 12 weeks, retroactive to March 15, 2020. To qualify, employers must have experienced a drop in revenue of at least 30%. The program is available to individuals, corporations, non-profit organizations and charities; it is not available to municipalities or local governments. Applications for the program are not yet open. In the meantime, employers should collect and retain paperwork documenting declines in revenue measured against the same period last year.

Business Credit Availability Program

The Business Credit Availability Program provides access to market-rate financing for small and medium-sized businesses in all sectors who otherwise would experience restricted access to financing. Businesses must demonstrate a viable business model, credit-worthiness and meet other eligibility requirements. The program is currently available. For more information, businesses should contact financial institutions with which they have a pre-existing relationship. The Export Development Bank of Canada (EDBC) and Business Development Bank of Canada (BDC) will extend credit directly to businesses whose financial needs exceed that of local lenders to meet.

Flexibility for Businesses Filing Taxes

To provide businesses with additional liquidity, the Canada Revenue Agency has deferred tax payments until August 31, 2020. No interest or penalties will be incurred during this time. Additionally, during this time, the Canada Revenue Agency will temporarily suspend audit interactions; no business will be contacted regarding GST/HST or income tax audits. Businesses can call the Canada Revenue Agency to speak with a Liaison Officer for more information about filing and payment deadlines, as well as other proactive relief measures available through the Agency.