Financial Relief for Canadian Businesses During COVID-19

The Coronavirus disease (COVID-19) has tested the resilience of businesses around the world, and Canadian businesses have not been spared from the devastating economic impact of the pandemic. 

According to a Canadian Federation of Independent Business survey back in March, about 77% of small- and medium-sized enterprises (SMEs) have partially or completely shuttered due to COVID-19. A total of 57% have seen their sales decrease significantly. Among these SMEs, about a third were unsure whether they will reopen their business. 

To help business owners gain a foothold in this crisis, the Government of Canada has taken immediate steps to provide financial relief for Canadian businesses.

Here are some of the available small business bailout loans and benefits that you might be eligible for.

Canada Emergency Business Account (CEBA)

The Canada Emergency Business Account (CEBA) allows small businesses and not-for-profit companies to apply for interest-free loans of up to $40,000. This aid will help them recoup their operating costs at a time when their revenues have been temporarily reduced. 

Businesses and non-profits who have paid between $50,000 and $1 million in total payroll in 2019 are eligible for CEBA. To receive the loan forgiveness of up to $10,000 (or 25%), you will have to pay your loan balance by December 31, 2022.

This program was implemented by banks and credit unions in collaboration with Export Development Canada. Learn more about the CEBA.

Related: Paycheck Protection Program: Coronavirus Relief for US Businesses

Canada Emergency Response Benefit (CERB)

For eligible contract workers and self-employed individuals, the Canada Emergency Response Benefit (CERB) offers a taxable benefit of $2,000 every 4 weeks for up to 16 weeks. 

To be eligible for CERB, you must:

• Be residing in Canada and at least 15 years old;
• Have stopped working due to COVID-19-related reasons or be eligible for Employment Insurance (EI) regular or sickness benefits or have exhausted their EI benefits between December 29, 2019 and October 3, 2020;
• Have been employed and/or self-employed and received an income of at least $5,000 in 2019 or in the 12 months prior to the date of your application;
• Have not quit your job of your own volition; and
• Have been without income for at least 14 consecutive days due to COVID-19 

If your business has experienced disruptions due to the ongoing pandemic, your employees may be eligible for CERB. You can apply for CERB here or via phone. For more information, visit the CERB information page.

Canada Emergency Wage Subsidy (CEWS)

For Canadian employers whose businesses have been impacted by COVID-19, the Government of Canada has provided a subsidy of 75% of employee wages for up to 24 weeks, retroactive from March 15, 2020, to August 29, 2020.

This wage subsidy will enable you to re-hire workers previously laid off as a result of COVID-19, help prevent further job losses, and better position you to resume normal operations following the crisis. Determine your eligibility for CEWS here. 

Canada Emergency Commercial Rent Assistance (CECRA)

The Canada Emergency Commercial Rent Assistance (CECRA) program offers relief for cash-strapped small businesses who may be having a difficult time with the rent. 

Through this program, property owners renting to small business owner tenants will have to reduce rent by at least 75% for April, May, and June. The tenant will have to pay up to 25%, with CECRA covering 50% of the rent and the property owner forgiving at least 25%. Apply to CECRA here.

For more information on the Canadian government’s ongoing financial relief programs for businesses and workers affected by COVID-19, visit the Department of Finance’s website.

Read Next: Coping with Fear and Panic: How to Improve Your Emotional Intelligence

Accounting Solutions for Canadian SMEs

Now more than ever, it’s important to have a clear picture of what your financial standing looks like as you prepare for uncertain months ahead. 

To help you get the information that you need to make smart business decisions at this juncture, why not consider hiring a finance and accounting outsourcing partner that can support your business every step of the way? 

Contact us at D&V Philippines and discover how we can help you with your accounting responsibilities so you can focus on what’s important: your business.