Since the pandemic began early in 2020, and especially after many non-essential businesses were required to close temporarily as a public health measure, the federal government has brought forward a broad range of financial relief programs for both individuals and businesses.
Some of those programs, like the Canada Emergency Response Benefit, or CERB, were used by millions of individual Canadians to bridge a time of unemployment or reduced income. Other programs — like the Canada Emergency Commercial Rent Assistance Program — attracted less interest, for a variety of reasons.
As most of the country has now entered the second wave of the pandemic, the federal government has re-tooled, expanded, or extended three different relief programs for businesses — the Canada Emergency Rent Subsidy, the Canada Emergency Wage Subsidy and the Canada Emergency Business Account. While the type of assistance varies by program, the underlying purpose is the same —providing businesses with the financial assistance needed to keep their bills paid and keep their employees on the payroll until better times return.
Canada Emergency Rent Subsidy
While a fortunate few small businesses own their own premises, it is more often the case that the business premises are rented from a landlord and that, consequently, rent must be paid regardless of the open or closed state of the business.
In April of this year, the federal government announced the creation of the Canada Emergency Commercial Rent Assistance (CECRA) program. That program was structured such that the landlord was the one who applied for the benefit and, as a condition of receiving that benefit, was required to reduce the rent payable by the commercial tenant by a specific percentage over a specific time period. The CECRA program did not attract the level of participation sought and so the federal government has made some changes and re-introduced the benefit, effective September 27, 2020, as the new Canada Emergency Rent Subsidy, or CERS.
The most important change is that application for the CERS is now made by the tenant (which can include a business, non-profit organization, or charity) and the benefit is paid directly to that tenant. The amount of benefit payable will be based on the percentage of revenue loss experienced by the business, up to a maximum of 65% of eligible expenses, until December 19, 2020.
As the pandemic enters its second stage, required business closures are being implemented on a more localized and targeted basis, as distinct from the general lockdowns which were mandated in the spring of 2020. Recognizing that reality, the CERS program will provide a top-up subsidy of 25% for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority. Such top-up is in addition to the general subsidy of up to 65%.
Canada Emergency Wage Subsidy
The CEWS program, which was introduced in March of this year, provides eligible employers with a direct subsidy of up to a maximum of 65% of employee wages. The CEWS program was scheduled to end on December 19, 2020 but has instead been extended to be available until June 2021.
Canada Emergency Business Account (CEBA)
The CEBA program, as originally announced in April of this year, provided businesses and not-for-profits which have been seriously impacted by the pandemic with an interest-free loan of up to $40,000.
The program has now been expanded to allow for an additional interest free loan amount of $20,000. Where the business is able to repay that additional $20,000 by the end of 2022, half of that loan amount (i.e., $10,000) will be forgiven.
The CEBA program is intended to benefit those businesses which have been most affected by the pandemic and, in order to qualify for CEBA loans, such businesses will be required to provide an “attestation” of the impact which the pandemic has had on them.
The application deadline for CEBA has also been extended to December 31, 2020.
The rules governing eligibility for benefits and the amount of benefits which can be obtained under the numerous federal business pandemic relief programs are undeniably complex. In addition, the frequent changes made to such programs to adapt to changing circumstances have led to confusion, creating an additional hurdle to participation. To assist those businesses wishing to participate, the federal government has created program-specific webpages outlining in detail the rules and requirements of each such program and has also set up toll-free telephone lines which business owners can call to obtain clarification or answers to questions.
The starting point to obtain such information is the main webpage for business pandemic relief programs, which includes both links to more detailed information on each such program and specific toll-free numbers to call for additional information or clarification. That webpage can be found on the federal government website at https://www.canada.ca/en/services/business/maintaining-your-business.html.