The federal government has increased the payroll support and introduced new measures, including loans and tax deferrals, to help small- and medium-sized businesses weather the storm of COVID-19.
The previously-announced wage subsidy – designed to help employers cover their workers’ wages – will be raised from 10 per cent to 75 per cent, said Prime Minister Justin Trudeau, who announced the new measures Friday morning during his daily briefing from outside his Rideau Cottage home in Ottawa.
Small- and medium-sized businesses, he said, are the "backbone" of Canada's economy.
"It's becoming clear that we need to do more, much more," said Trudeau. "So we're bringing that (payroll support) percentage up to 75 per cent for qualifying businesses."
That subsidy will be backdated to Sunday, Mar. 15, said Trudeau, and means people will continue to be paid even if their employer has had to slow down or reduce operations.
Trudeau said the government should have more details on the wage subsidy Monday, adding he hopes employers will be able to keep workers on the payroll or hire people back if they've had to lay them off.
"We know that allowing people to continue to feel and know they have a job, and allow employers to keep supporting those families who work with them is a really important thing," said Trudeau, "not just for people's confidence, but for all of us to bounce back strongly from this once we're through it."
Ottawa is also launching the Canada Emergency Business Account. Through this, banks will be able to offer $40,000 loans, guaranteed by the government and interest-free for the first year, to qualifying businesses.
"We know that small storefront businesses are struggling with cash flow right now. It's hard to raise money and make money in this climate," said Trudeau.
If businesses meet certain conditions, said Trudeau, $10,000 of that loan will be forgivable.
The prime minister did not elaborate on what those conditions would be.
The federal government will be providing $12.5 billion to Export Development Canada and the Business Development Bank, said Trudeau, to help small- and medium-sized businesses with their cash-flow requirement. This means, he said, that businesses will be able to apply for a guaranteed loan when they go to their banks for help.
In addition, the government will defer GST and HST payments, plus duty and taxes on imports until June, said Trudeau, the equivalent of giving $30-billion in interest-free loans to businesses.
This will allow businesses to use money they otherwise would have owed the government on their immediate expenses, said Trudeau.
"I know the past few weeks have been really tough," said Trudeau, speaking directly to business owners. "You're worried about what COVID-19 means for your business and for your future. These are uncertain times. But my message to you today is, we're going to be here for you. Small- and medium-sized businesses are the backbone of our economy.
You are, collectively, the largest employer in the country, you support millions of families, you serve our communities. And you make our towns and cities better places."
Trudeau acknowledged that these are "exceptional measures," necessitated by the "exceptional times," with almost total economic slowdown and shutdown in Canada.
"We have one of the best balance sheets in the G7, which allows us to make the investments we need to keep Canadians focused on what they need to do right now: stay home and take care of their families," he said.
