Canada's COVID-19 Programs: Business Loans Criteria Expansion & New Rent Assistance Program

May 21, 2020

In an effort to widen the support to include more small businesses during the COVID-19 crisis, the federal government has recently announced an expansion to the eligibility criteria for CEBA and the development of a new commercial rent assistance program.

Eligibility Criteria Expansion of $40,000 Small Business CEBA Loan

On May 19, the federal government announced an expansion to the eligibility criteria for the Canada Emergency Business Account (CEBA) to include many more owner-operated small businesses.

The CEBA offers loans of up to $40,000 to small businesses and not-for-profits that have experienced diminished revenues due to COVID-19. These loans have zero-interest and are partially forgivable (25 percent) if repaid by December 31, 2022. 

The program will now be available to a greater number of businesses such as:

    • sole proprietors receiving income directly from their businesses,
    • businesses that rely on contractors,
    • family-owned corporations that pay employees through dividends rather than payroll.

To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:

    • a business operating account at a participating financial institution
    • a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return.
    • eligible non-deferrable expenses between $40,000 and $1.5 million (such as rent, property taxes, utilities, and insurance)

Expenses will be subject to verification and audit by the Government of Canada. More details on the eligibility criteria and launch date will be announced at a the coming days. In the meantime, please visit CRA’s page on CEBA for more information.

New Federal Program: Commercial Rent Assistance (CECRA) for Small Businesses

The Government has recently announced a new program – Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. The CECRA is intended to allow small businesses tenants affected by COVID-19 to reduce their rent by up to 75%. However, the CECRA would require the agreement and participation of commercial property owners.

Here are some highlights of the program:

    • Qualifying commercial property owners will be given loans to cover up to 50% of rent payments for the months April, May and June 2020.
    • The loans will be forgiven if the landlords agree to reduce the tenants’ rent by at least 75% under a rent forgiveness agreement. The tenant would then cover the remaining 25% of their rent.
    • A tenant is eligible for this program, if he is paying less than $50,000 per month in rent and has temporarily ceased its operations or experienced at least a 70% drop in pre-COVID-19 revenues.

More details on program launch date and application CECRA for small businesses will be announced soon.

If you are a tenant, please click here to review the eligibility details and reach out to your landlord to put in pace a rent forgiveness agreement.

If you are a property owner and your tenant’s revenues have been affected by COVID-19, please click here to see if you are eligible and reach out to your tenant to put in pace a rent forgiveness agreement.

New B.C. Program: COVID-19 Temporary Pandemic Pay

The B.C. Government has recently announced the Temporary Pandemic Pay which is intended to pay health and front-line workers $4 per hour for a 16 week period starting March 15, 2020. Eligible workers will receive the payment directly through their employer and do not need to apply. 

Employers do not need to apply for this program. The Government will provide the funds to the employers, who are  responsible for distributing the funds to eligible employees in the coming weeks as lump-sum payments. The timing and frequency of the lump-sum payments may vary between employers.

More information on when the payments will be made to the employer is yet to come.

Click here for more details on eligible sectors, workplaces, and roles related to the Temporary Pandemic Pay.

In these unprecedented times, we understand that there is a lot of information to disseminate. 

We at Provision are here to help you in any way we can. Feel free to reach out directly to your contact at Provision for more details and clarifications.

Raina Bellani
604-273-6601 ext. 109
rbellani@provisiongroup.ca 

Kurt Hamilton
604-273-6601 ext. 112
khamilton@provisiongroup.ca

Nathan Morrison
604-273-6601 ext. 104
nmorrison@provisiongroup.ca

Garth Drummond
604-273-6601 ext. 105
gdrummond@provisiongroup.ca

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