Prime Minister Justin Trudeau has announced new measures to support businesses during the pandemic. They include expanding the Canada Emergency Business Account (CEBA) and initiating a plan to help businesses with rent payments.
In a statement, the federal government said it is expanding CEBA to businesses that paid between $20,000 and $1.5 million in total payroll in 2019.
This new range will replace the previous one of between $50,000 and $1 million, and will help address the challenges faced by small businesses to cover non-deferrable operating costs. Since the launch of the CEBA on April 9, more than 195,000 loans have been approved by financial institutions, extending more than $7.5 billion in credit to small businesses, the statement said.
The new measures came as the organization representing innovation hubs across the country wrote an open letter to federal ministers asking them to take measures to ensure startups are supported through the downturn.
"While the federal and provincial governments have introduced important measures to backstop the broader economy amid the health crisis, many early-stage tech companies remain at risk of collapse in the coming months," said the letter, issued through the Canadian Digital Media Network, or CDMN, which represents 28 innovation hubs across the country. "Such a reversal would be truly unfortunate given the difficult work and substantial investments that have gone into building a robust pipeline of high-growth firms in this country over the past decade."
The letter, whose signatories included five Atantic Canadian groups, asked Ottawa as it refines its economic supports to:
- Be flexible on the eligibility of such programs as CEBA, the Canada Emergency Wage Support and others;
- Provide rent relief for startups;
- Increase funding for NRC-IRAP and the Regional Development Agencies to support startups and their ecosystems;
- And leverage the CDMN and regional groups to offer support to startups.
The federal government also intends to introduce the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. The program will seek to provide loans, including forgivable loans, to commercial property owners who lower or forgo the rent of small businesses for the months of April (retroactive), May, and June.
Implementation of the program will require a partnership between the federal government and provincial and territorial governments, which are responsible for property owner-tenant relationships. The government said it is working with the provinces and territories to increase rent support for businesses most impacted by the pandemic and will have more details soon.
The measures are part of the national COVID-19 Economic Response Plan, which has committed more than $107 billion in support to Canadians and businesses, the government statement said.
The government will monitor and respond to the impacts of COVID-19 and take action as needed.
