Ah…. the strange new world of continuous change…. Just when we felt accomplished by sending our last newsletter and headed into the well-deserved long weekend, the federal government announced additional proposed measures. Remember when tax changes were tied to budget updates? What a much simpler time that was!
The new proposed measures are meant to provide targeted support for organizations affected most by the pandemic through the following programs:
Canada Emergency Rent Subsidy
Whereas the existing rent support requires landlords to apply, the new rent and mortgage support program would be provided directly to tenants and property owners through CRA. Organizations which suffered a decline in revenues will be subsidised on a sliding scale, up to a maximum of 65% of eligible expenses (ie rent and interest on commercial mortgages) until December 19, 2020 (a retroactive application would be available for the period from September 27 to October 24, 2020).
An additional top up of 25% would be provided to organizations temporarily shut down by a mandatory public health order.
This program would be available until June 2021.
Considering the criticisms the existing CECRA program received (which among other things required a 70% decline in revenues and required landlords to apply), the proposed program appears to be a welcome improvement.
Canada Emergency Wage Subsidy
The CEWS program is proposed to be extended until June 2021. The subsidy would remain at the current subsidy rate of up to 65% of eligible wages until December 19, 2020.
Rumours about CEWS extending into the summer have been circulating for some time. We are interested to see what the extended program will look like after December.
Canada Emergency Business Account
In addition to the original CEBA loan of $40,000, the expanded CEBA aims to provide up to an extra $20,000 of interest-free loans. Half of this additional financing would be forgivable if repaid by December 31, 2022 (for total forgivable amount of $20,000 on a $60,000 CEBA loan).
In addition, the applications deadline is being extended to December 31, 2020.
More information on these additional programs is expected to be available in the coming days. We will continue keeping you posted.