In order to reduce the spread of COVID-19, many Canadian businesses are now in a position where they have to change the way that they operate, which directly impacts their revenue streams, and in turn, their employees. The government has introduced a number of measures to assist Canadian businesses, particularly SMEs.
1. Temporary Wage Subsidy for Small Business – to help businesses prevent layoffs in the case of revenue loss, the government will offer a subsidy of 10% of remuneration paid for three months, up to a maximum of $1,375 per employee and $25,000 per employer. Corporations eligible for the small business deduction and non-profits can take advantage of this provision.
2. Extended Tax Deadlines for Businesses – the payment of any income tax amounts owing on or after today and before September 2020 can be deferred until August 31, 2020. This applies to tax balances and instalments. No interest or penalties will be accrued.
3. Increased Access to Credit for Business - $10 billion in additional credit support will be available, largely to SMEs through the Business Credit Availability Program which will allow the Business Development Bank of Canada and Export Development Canada work with private sector lenders to coordinate on credit solutions for individual businesses.
4. Bank of Canada recently dropped the overnight interest rate to 0.75%, and the Office of the Superintendent of Financial Institutions lowered the Domestic Stability Buffer to 1.25% which will allow Canada’s large banks to inject $300 billion of additional lending into the economy.
5. Ensuring Stability in the Mortgage Market – on March 16, the government introduced the Insured Mortgage Purchase Program, through which they will purchase $50 billion of insured mortgage pools through CMHC. This action will provide long-term stable funding to banks and mortgage lenders, help facilitate continued lending to Canadian consumers and businesses, and add liquidity to Canada’s mortgage market.
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