The Federal government has announced that the previously unveiled temporary wage subsidy will be increased to 75%.
Although it was previously announced that the subsidy would be available to only small and medium businesses, the government has since announced that the subsidy is applicable to businesses of any size, provided that they have experienced at least a 30% decline in revenue due to the COVID-19 pandemic. Charities and not-for-profit organizations will also be covered by the temporary wage subsidy.
The temporary wage subsidy will cover up to 75% of the first $58,700 of an employee’s annual salary, with a maximum weekly benefit of approximately $847. Although the subsidy will be backdated to Sunday, March 15, 2020, it remains unclear when employers will be able to apply for the subsidy or how it will be paid.
In addition, the Federal government announced last Friday that it will be launching the Canada Emergency Business Account to aid small businesses struggling with cash flow. Under this program, the government will guarantee bank loans of up to $40,000 to qualifying businesses. The loans will be interest free for the first year, and up to $10,000 of the loan will be forgivable for eligible businesses.
The Federal government will also provide an additional $12.5 billion to Export Development Canada and the Business Development Bank of Canada to aid small and medium sized businesses with their operational cash flow requirements.
Lastly, the government announced that there will be deferrals to GST and HST payments, as well as duties and taxes owed on imports, that will not be due until June.
Additional information on these programs is expected to be made available in the coming days. We are continuing to monitor these developments and will provide updates as additional details become available.