Practically every business is being affected by the economic downturn caused by the COVID-19 pandemic, but small businesses can be hit particularly hard.
When you’re an entrepreneur and your revenue suddenly drops, it’s easy to become overwhelmed by the overhead costs of your business. However, Canada’s federal and provincial governments have shifted into high gear and created a number of new programs that you may benefit from. We’ll help you navigate the new support programs that have been put in place to help businesses during the coronavirus outbreak.
These programs focus on making loans and financial relief available to sustain your small business during these challenging times.
Keep in mind that some of these programs are being updated very quickly, sometimes even on a daily basis, to keep up with the needs of Canadians and the changing situation. The Government of Canada website and your provincial government website will have the most up to date information about these changes, so make sure to consult those resources before applying.
For more information on financial support (such as for your personal living expenses) check out our article on financial resources during COVID-19.
Federal support for businesses impacted by COVID-19
The following support programs are available to all Canadians who meet the eligibility criteria.
If your small business has employees and you have seen a drop in revenue of 30% or more, you may be eligible for this 75% wage subsidy, up to $847 per week per employee, available for 12 weeks starting from March 15th, 2020. If you qualify, the subsidy will be paid retroactively.
If you were thinking about business incorporation before the coronavirus outbreak, you can still incorporate now. This will ensure that you protect your business name, so no one else can register with that name before you. Even new employees are eligible for this wage subsidy, as long as they are employed during the eligibility period. If you qualify, you can apply through the CRA’s My Business Account portal.
Maybe you need some credit during this period to stay afloat. That’s where the BCAP comes in. It will provide up to $6.25 million in loans and financial support to qualifying businesses that might not otherwise be able to access financing during the COVID-19 outbreak.
Make sure you’ve completed your business registration, and then you can contact your financial institution directly to talk about accessing this program. They will contact the Business Development Bank of Canada (BDC) or Export Development Canada (EDC) on your behalf if you qualify.
This is similar to the BCAP, but is provided in partnership with financial institutions. The interest rate and repayment period may differ between the two loans. Your primary financial institution will be able to help you determine which loan is right for you.
The SME Loan and Guarantee program will enable up to $40 billion in additional lending. It involves two initiatives: BBC co-lending and the EDC BCAP Guarantee. Through the BDC co-lending program, you can get loans of up to $6.25 million at commercial interest rates. The loans have a 10-year repayment period.
It’s referred to as “co-lending” because it involves the BDC working with financial institutions. The BDC will provide 80 per cent of the loan, and the financial institution will cover the other 20 per cent. With the EDC BCAP Guarantee, the EDC will also provide funding to guarantee loans of up to $6.25 million. Using both of these lending streams, eligible businesses can get a total of up to $12.5 million.
Small or medium-sized businesses directly or indirectly affected by the COVID-19 pandemic might be able to access this program. The business must have been financially viable prior to the impact of COVID-19. You can apply through your primary financial institution.
The Canada Emergency Business Account can help by offering loans up to $40,000 to small businesses and not-for-profits interest-free until December 31, 2022. In addition, up to $10,000 of the loan is eligible for complete forgiveness if the other $30,000 is fully repaid by December 31, 2022.
This program is designed to help businesses cover their operating costs when facing reduced revenues due to the COVID-19 pandemic. It’s available to small businesses or not-for-profit organizations that have paid between $50,000 to $1 million in total payroll in 2019 to cover essential operating costs of the business. You can apply by speaking with your primary financial institution.
Status: Closed. CERB officially closed for retroactive applications on December 2, 2020.
This benefit, which you can apply for through your CRA My Account or through an automated phone service, provides $2000 per month for up to four months to eligible Canadians impacted by the coronavirus. Unlike EI, this federal support includes self-employed people. Whether you have a sole proprietorship or you have completed your incorporation, you can apply for this benefit if you have lost income due to COVID-19.
There are some eligibility requirements to keep in mind. For example, you must have earned $5000 in 2019 or in the 12 months prior to applying, and you must be or expect to be without self-employment income for 14 days in the initial four-week period beginning on March 15th. Applications for CERB are scheduled to open on April 6th.
Provincial support for businesses impacted by COVID-19
In addition to these programs, each province has its own support response to the coronavirus outbreak. The types of businesses that are allowed to operate at this time also vary from one province to the next, and since the situation is changing every day, it’s a good idea to regularly check announcements in your home province.
If your business is incorporated and you maintain a minute book, you’ll want to make sure you keep a clear record of which supports you have accessed to make things as simple as possible when tax time comes next year.
Ontario Support during Coronavirus
There is currently a province-wide shutdown in place in Ontario. This means that Ontario has limited the type of businesses that are allowed to operate to this list of essential businesses. Most of the business categories are related to food and agriculture, communication, transportation, infrastructure and sanitation, but if you have a small business that can operate from home and mostly online, you should still be able to stay open.
- The Employer Health Tax exemption threshold has been increased from $490,000 to $1 million for one year.
- Property tax and energy bill rebates are available to eligible businesses that were subject to certain restrictions.
- The Main Street Relief Grant is designed to help businesses recover some of the costs associated with PPE purchased since March 17, 2020.
- Pension contribution deferral and extension options are available for eligible businesses who file an application. There is also a catch-up contribution extension.
- The Regional Opportunities Investment Tax Credit is available for eligible businesses that have made specific capital investments.
You can learn more about Ontario’s support for small businesses by looking at their COVID-19 resources. They also have sector-specific information available.
Alberta Support during Coronavirus
There is currently a provincial-wide shutdown in place in Alberta. The government of Alberta has also released a list of essential businesses that may remain open. Businesses not on this list should remain closed until further direction is provided by the government. Make sure to check regularly for any updates to see how your small business might be affected.
- Small and Medium Enterprise Relaunch Grant is in place to help eligible businesses and organizations offset the costs of reopening.
- Worker’s Compensation Board premium deferral: If you’re an employer in Alberta, you can defer this payment until 2021. If you’re a small or medium-sized business, your 2020 premium will also be subsidized by 50%. These are payable as of January 1, 2021.
- Education property tax rate freeze and deferral: The 3.4% population and inflation increase to this tax outlined in the 2020 budget has been reversed, and payments for businesses are being deferred for 6 months. You’ll have to repay the deferred amount eventually, but the grace period should help small businesses during the coronavirus outbreak.
British Columbia Support during Coronavirus
BC is currently in a state of emergency, which means that certain restrictions are in place for residents and business.
Finally, while it’s not financial support, the BC government and Alacrity Canada is providing access to the Digital Marketing Bootcamp for businesses that need help adapting to the new climate. Businesses within BC might be eligible to have their full tuition covered, those outside of BC may be able to participate at a reduced rate.
If you live in a province or territory outside of Ontario, British Columbia or Alberta, make sure to check your government website for updates related to new programs specific to your region. The federal programs outlined above are available to you too.
Additional Support Programs
To find out more about all the COVID-19 financial support programs that are available, check out the page for Canada’s COVID-19 Economic Response Plan.
Also, there is a wide range of other grants unrelated to COVID-19 that can still provide essential help in these times. They include grants for improving your business in many ways, such as by investing in assistive technology, financing an expansion, or reducing waste and pollution.
For more information about the grants available to you, check out the Government of Canada’s Business grants and financing page.
More Information on BDC and EDC
Many of these support programs are offered through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). The BDC focuses on supporting the development of small and medium-sized businesses. It provides capital, financing, and advisory services.
You can contact BDC directly at:
EDC is Canada’s export credit agency. Typically, it focuses on supporting Canadian exporters and investors, helping them expand their international business.
However, in the face of the coronavirus outbreak, the EDC has been given a new domestic mandate. It will now focus on helping all types of micro, small, and medium-sized businesses, regardless of whether they serve international markets.
You can contact EDC directly at:
The Work-Sharing Program is not specific to COVID-19 but is designed to help mitigate layoffs and keep employees working. This program is not intended for long-term use but to help ensure there are no unnecessary layoffs when going through a trying time. Temporary special measures are currently in effect for this program until March 14, 2021.