The federal government is making the lifeline it threw to small and medium-sized businesses quite a bit longer.
Prime Minister Justin Trudeau has announced that the government is increasing the pandemic-related wage subsidy being offered from 10 per cent to 75 per cent.
“This means that people will continue to be paid even though their employer has had to slow down or stop operations because of COVID-19,” said Trudeau. “We’re helping companies keep people on the payroll so that workers are supported and the economy is positioned to recover from this.”
Full details on the qualifying businesses will be rolled out by Monday. However, the subsidy will be backdated to Sunday, March 15.
The decision to increase the subsidy was greeted with enthusiasm by the Canadian Chamber of Commerce.
The government is also launching the Canada Emergency Business Account to allow banks to provide loans of up to $40,000 for qualifying businesses in an effort to help small and medium-sized businesses with cash flow. The loan would be interest-free for one year. For some qualifying businesses, $10,000 of the loan would be forgivable.75% wage subsidy is exactly what the doctor ordered, and what business groups have been asking for. Very good news for small businesses and their workers, increasing their ability to keep staff on the payroll.
— Canadian Chamber of Commerce (@CdnChamberofCom) March 27, 2020
“This means businesses will be able to apply for a guaranteed loan when they go to their financial institutions to get help as they weather the impacts of COVID-19,” said Trudeau.
An additional $12.5 billion will be available through the Export Development Canada and Business Development Bank for these guaranteed loans.
Also announced on Friday, the government will defer payments of GST/HST and duties and taxes owed on all imports until June.