On October 9, 2020 the Government of Canada announced that it will be extending the Canada Emergency Wage Subsidy, creating a new Canada Emergency Rent Subsidy program, and expanding the Canada Emergency Business Account.
Canada Emergency Wage Subsidy
The government has now indicated that it will extend the CEWS until June 2021. It will maintain the current subsidy rate until December 19, 2020. The government intends to introduce legislation on this change shortly.
Canada Emergency Rent Subsidy
The government also announced a new Canada Emergency Rent Subsidy which will be provided directly to qualifying tenants, while also providing support to property owners affected by COVID-19. This subsidy will be available until June 2021 and subsidizes a percentage of expenses incurred by businesses, charities and non-profits that have suffered a revenue drop, on a sliding scale, to a maximum of 65% of eligible expenses, including rent and interest on commercial mortgages, until December 19, 2020. The government has not announced any details of the program after December 19, 2020. Eligible organizations can retroactively claim the subsidy for the period that began September 27, 2020 and ends October 24, 2020.
In addition to the 65% subsidy, the government is also instituting a top-up Canada Emergency Rent Subsidy of 25% for organizations temporarily shut down due to a mandatory public health order issued by a qualifying public health authority. The government will introduce legislation to implement the new Canada Emergency Rent Subsidy shortly.
Canada Emergency Business Account
The government will also expand the CEBA to provide eligible businesses and NPOs with an interest-free loan of up to $20,000, in addition to the original CEBA loan of $40,000. The government notes that 50% of this additional financing will be forgivable if the balance is repaid by December 31, 2022. Further, the government will extend the CEBA’s application deadline to December 31, 2020. Businesses will have to provide an attestation on how they have been affected by COVID-19 to access the additional financing. More details on this change, including its launch date and the application process are also expected to be announced shortly.
For further information, please contact your Lipton advisor.