Updated: January 27, 2021
The Canadian government has rolled out several broad-based programs to buoy businesses and retain jobs during the pandemic and resulting partial economic shutdown. Here is a summary of the major announcements relevant to the recreational boating sector:
Canada Emergency Wage Subsidy
For eligible businesses and not-for-profits, the Canada Emergency Wage Subsidy (CEWS) program will subsidize 75% of the first $58,700 normally earned by employees (up to a maximum benefit of $847 per week). In order to qualify, businesses need to show a gross revenue decline of at least 15% in March and 30% in April and subsequent months of this year, compared to either the same month last year (or an average of January and February 2020, in some cases). The program period covers wages and salaries paid from March 15th to November 21, 2020.
The application window for the CEWS is now open. Businesses can apply through CRA My Business Account or a separate online application form. CRA has also created a calculator that allows an employer to figure out their subsidy amount. Before using the calculator, please ensure you have updated payroll data on hand for each of your employees (including the amount of EI premiums and CPP contributions you have paid on their behalf).
The government has said approved applicants can expect to get their CEWS payments within 10 business days. If you haven’t already, please set up your CRA My Business Account online today to ensure you receive the benefit payment quicker.
Canada Emergency Business Account (CEBA)
**UPDATE: CEBA has been extended to March 31, 2021. The government has also increased the maximum loan amount by $20K (up to $60,000)**
The government is providing businesses with interest-free loans of up to $40,000 to help cover operating costs during the crisis. This program is for businesses with a total payroll between $20,000 to $1.5 million in 2019. If the recipient repays the loan on or before December 31, 2022, up to 25% ($10,000) of the debt will be forgivable. Businesses can now apply for the CEBA through their primary bank or credit union. Please visit this website for more details: https://ceba-cuec.ca/
**New** Highly Affected Sectors Credit Availability Program (HASCAP) Guarantee
This new program announced in January 2021 gives businesses hard-hit by COVID-19 access to guaranteed, low-interest loans of $25,000 to $1 million to cover operational cash flow needs. To be eligible, a business needs to qualify as a small and medium-sized enterprise show a revenue decrease by 50% or more as a result of COVID-19.
Businesses can apply through their financial institution. The loans will be available until June 30, 2021. For more information, please visit the HASCAP website
Commercial rent assistance
**Update** In November 2020, the government rolled-out the Canada Emergency Rent Subsidy to replace the CECRA. Under this new program, businesses that have seen a drop in revenue due to COVID-19 can apply directly for a subsidy of up to 65% to defray commercial rent or property expenses. The program runs until June 2021. Businesses that are forced to close because of mandatory lockdowns may be eligible for an additional 25% in aid. To learn more and apply, please visit: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-rent-subsidy.html.
Previously, the federal government introduced the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses, which provides forgivable loans to commercial property owners to cover 50% of rent in April, May and June for small business tenants in financial distress.
To qualify for the loan, property owners will need to reduce the small business tenants' rent by at least 75%; the small business will pay the remaining 25% in costs. Eligible small businesses must be paying less than $50,000 per month in rent and either have temporarily stopped operating or sustained at least a 70% drop in revenues.
Large Employer Emergency Financing Facility (LEEFF)
The LEEFF program has been set up to provide emergency loan funding to large Canadian businesses that are facing financial challenges due to COVID-19. The government has said that eligible businesses are those that:
- Have a significant impact on Canada’s economy as demonstrated by having either significant operations in Canada or supporting a significant workforce in Canada;
- Can generally demonstrate approximately $300 million or more in annual revenues; and
- Require a minimum loan size of about $60 million.
Deferred tax and tariff payments
The government is permitting all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18 and before September 2020 (meaning that no interest or penalties will be levied on these amounts during the period). As well, businesses will be able to defer remittances of GST/HST and customs duties owing on their imports until June 30, 2020. Please consult the CRA’s webpage for answers to commonly asked questions: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-gst-hst.html
Regional Relief and Recovery Fund (RRRF)
The Regional Relief and Recovery Fund (RRRF)
is intended to help more businesses and organizations impacted during COVID-19, with a focus on regions and local economies. Priority sectors include manufacturing, technology, and tourism. The program is aimed at smaller businesses and aid will come in the form of grants and loans.
The program is being delivered through the government’s regional development agencies (RDAs). Eligible businesses will need to show that they failed to qualify, or were declined, for other federal supports such as the Canada Emergency Wage Subsidy or the Canada Emergency Business Account.
For more information on the RRRF, including how to apply, please visit your RDA’s website below: