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Financial Relief Programs: Part 3 – Federal  Support for Businesses

7 mins read

This article is about the financial relief programs made available for businesses who have been affected by the COVID-19 pandemic to access through the Federal Government.

The Government of Canada has numerous resources available to ensure businesses avoid layoffs, can make plans for rehiring employees and creating new jobs. These support programs also offer businesses financial support, loans, and access to credit in cases where the business is suffering from the COVID-19 pandemic.

** Important – The availability and dates for these programs are subject to review and may be extended.

Canada Emergency Wage Subsidy (CEWS) is a program where the government covers up to 75% of an employee’s wages who are eligible for coverage. The wage subsidy supports businesses to keep and re-hire its employees, to avoid layoffs.

  • Canadian employers may be eligible to cover part of their employee wages, retroactive to March 15, 2020.

Work-Sharing Program is a program that helps businesses and employees avoid layoffs when there is a temporary decrease in business activity beyond the control of the employer. The program provides EI benefits to eligible employees who agree to reduce their normal working hours and share the available work while their employer recovers.

  • The coverage for employers ranges from 38 weeks to 76 weeks who were affected by COVID-19.

Canada Emergency Business Account (CEBA) provides interest-free, partially forgivable, loans of up to $60,000, to small businesses and not-for-profits, which have experienced diminished revenues due to COVID-19 but face ongoing non-deferrable costs, such as rent, utilities, insurance, taxes and wages.

  • the CEBA deadline has been extended and is available until June 30, 2021.

Canada Emergency Rent Subsidy (CERS) provides a direct and easy-to-access rent and mortgage subsidy of up to 65% of eligible expenses to qualifying businesses, charities, and non-profits. This support is available directly to tenants.

  • Qualifying organizations that have been significantly restricted by a mandatory public health order issued by a qualifying public health authority can receive an additional 25% of rent support through the Lockdown Support.
  • The combined effect of the rent subsidy and the Lockdown Support is that hard-hit businesses, non-profits and charities subject to a lockdown can receive rent support of up to 90%.
  • CERS is available until June 2021.

The Highly Affected Sectors Credit Availability Program (HASCAP) provides businesses heavily impacted by COVID-19 with low-interest loans of $25,000 to $1 million to cover operational cash flow needs.

  • This program is available to businesses that operate in sectors such as tourism and hospitality, restaurants and those that primarily rely on in-person services.

Loan Guarantee for Small and Medium-size Enterprises is a program that is administered through EDC which works with financial institutions to guarantee 80% of new operating credit and cash flow term loans of up to $6.25 million to small and medium-sized enterprises (SMEs). This financing support is to be used for operational expenses and is available to both exporting and non-exporting companies.

  • This financial support program is available until June 2021.

Co-Lending Program for Small and Medium-size Enterprises is a program administered through BDC which works with financial institutions to co-lend term loans of up to $6.25M to SMEs for their operational cash flow requirements. The program offers differing maximum finance amounts based on business revenues.

  • This financial support program is available until June 2021.

Regional Relief and Recovery Fund (RRRF) provides over $1.5 billion through the Regional Relief and Recovery Fund (RRRF) to help more businesses and organizations in sectors such as manufacturing, technology, tourism and others that are key to the regions and to local economies.

  • This fund is specifically targeted to those that may require additional help to recover from the COVID-19 pandemic but have been unable to access other support measures.

Regional Relief and Recovery Fund (RRRF) – Women’s Enterprise Initiative Stream was announced by the Government of Canada to provide financial support directly to small and medium-sized women-owned or -led businesses. Loans of up to $60,000 are available through Women’s Enterprise Initiative (WEI) organizations across Western Canada to address COVID-19 impacts on short-term stability.

Mid-Market Financing Program is made available through BDC and can provide commercial loans ranging between $12.5 million and $60 million to medium-sized businesses whose credit needs exceed what is already available through the Business Credit Availability Program and other measures.

  • BDC anticipates that qualifying companies will have annual revenues in excess of approximately $100 million.
  • This financial support program is available until June 2021.

Mid-Market Guarantee and Financing Program is made through the Business Credit Availability Program, EDC’s Mid-Market Guarantee and Financing Program will bring liquidity to companies who tend to have revenues of between $50 million to $300 million, to sustain operations during this uncertain period. EDC will continue to work with Canadian financial institutions to guarantee 75 % of new operating credit and cash-flow loans – ranging in size from $16.75 million to a maximum of $80 million.

The Large Employer Emergency Financing Facility (LEEFF) provides bridge financing to Canada’s largest employers, whose needs during the pandemic are not being met through conventional financing, to keep their operations going.

  • The additional liquidity provided through LEEFF allows Canada’s largest businesses, their workers and their suppliers to remain active during this difficult time and position them for a rapid economic recovery.
  • This program is delivered by the Canada Development Investment Corporation, in cooperation with Innovation, Science and Economic Development Canada and the Department of Finance.
To learn more about the numerous Federal and Provincial government financial relief programs made available for individuals and businesses, see Part 4, “Saskatchewan Government Support for Businesses”.

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