Canada’s COVID-19 Economic Response Plan
SUPPORT FOR BUSINESSES
Avoiding layoffs and rehiring employees
Canada Emergency Wage Subsidy (CEWS)
We are proposing a new Canada Emergency Wage Subsidy (CEWS) to support employers that are hardest hit by the pandemic, and protect the jobs Canadians depend on.
The subsidy would cover 75 per cent of an employee’s wages – up to $847 per week - for employers of all sizes and across all sectors who have suffered a drop in gross revenues of at least 15 per cent in March, and 30 per cent in April and May.
The program would be in place for a 12-week period, from March 15 to June 6, 2020.
We are also proposing that employers eligible for the CEWS be entitled to receive a 100-per-cent refund for certain employer contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan paid in respect of employees who are on leave with pay.
Extending the Work-Sharing program
We are extending the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks for employers affected by COVID-19. This measure will provide income support to employees eligible for Employment Insurance who agree to reduce their normal working hours because of developments beyond the control of their employers.
Temporary changes to Canada Summer Jobs program
The Canada Summer Jobs program provides opportunities for youth to develop and improve their skills within the not-for-profit, small business, and public sectors, and supports the delivery of key community services.
We are making temporary changes to the Canada Summer Jobs program to allow employers to:
- receive an increased wage subsidy, so that private and public sector employers can also receive up to 100 per cent of the provincial or territorial minimum hourly wage for each employee;
- extend the end date for employment to February 28, 2021;
- adapt their projects and job activities;
- hire staff on a part-time basis.
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Reduced and deferred payments
More time to pay income taxes
We are allowing 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. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act.
No interest or penalties will accumulate on these amounts during this period.
Deferral of Sales Tax Remittance and Customs Duty Payments until June
We are allowing businesses, including self-employed individuals, to defer until June 30, 2020 payments of the GST/HST, as well as customs duty owing on their imports.
Any GST/HST payment that becomes owing from March 27 until the end of May can be deferred until the end of June. For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May.
These amounts were normally due to be submitted to the Canada Revenue Agency and the Canada Border Services Agency as early as the end of March 2020.
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Access to credit
Establishing a Business Credit Availability Program
We established a Business Credit Availability Program (BCAP) to provide $40 billion of additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).
BDC and EDC are working with private sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation, exports and tourism.
This program includes:
- Loan Guarantee for Small and Medium-Sized Enterprises
EDC is working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to SMEs. - Co-Lending Program for Small and Medium-Sized Enterprises
BDC is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements.
Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.
These programs roll out April 9, 2020 and interested businesses should work with their current financial institutions.
Canada Emergency Business Account (CEBA)
The new Canada Emergency Business Account will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.
To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.
This program roll out April 9, 2020 and interested businesses should work with their current financial institutions.
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Supporting financial stability
Launching an Insured Mortgage Purchase Program
We launched an Insured Mortgage Purchase Program, in which we will purchase up to $150 billion of insured mortgage pools through the Canada Mortgage and Housing Corporation.
This action will provide long-term stable funding to banks and mortgage lenders, help facilitate continued lending to Canadian consumers and businesses, and add liquidity to Canada’s mortgage market.
Bank of Canada actions
The Bank of Canada is acting in several ways to support the economy and financial system and stands ready to take any and all actions that it can to protect the well-being of Canadians during this difficult time. The Bank has responded by lowering interest rates, intervening to support key financial markets and providing liquidity support for financial institutions.
Office of the Superintendent of Financial Institutions actions
The Office of the Superintendent of Financial Institutions announced it is lowering the Domestic Stability Buffer by 1.25% of risk-weighted assets. This action will allow Canada’s large banks to inject $300 billion of additional lending in to the economy.
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Support for self-employed individuals
Canada Emergency Response Benefit (CERB)
We will provide a taxable benefit of $2,000 a month for up to 4 months to eligible workers who have lost their income due to COVID-19.
A portal with a simple questions will help us direct you to the service option that best fits your situation (i.e. eligibility for Employment Insurance benefits or not).
Deferral of Sales Tax Remittance and Customs Duty Payments until June
We are allowing businesses, including self-employed individuals, to defer until June 30, 2020 payments of the GST/HST, as well as customs duty owing on their imports.
Any GST/HST payment that becomes owing from March 27 until the end of May can be deferred until the end of June. For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May.
These amounts were normally due to be submitted to the Canada Revenue Agency and the Canada Border Services Agency as early as the end of March 2020.
More time to pay income taxes
We are allowing 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. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act.
No interest or penalties will accumulate on these amounts during this period.