Editor’s note: Since this article was published, the federal government has updated the wage subsidy program to encompass businesses and charities of all sizes. The new information is available here: Canada expands 75% wage subsidy to COVID-19 affected businesses of all sizes
Small businesses will now be able to receive up to 75 per cent in federal government funds in order to keep paying their employees during the COVID-19 pandemic – up from the previously announced 10 per cent subsidy plan.
During his daily news conference outside Rideau Cottage in Ottawa on Friday, March 27, Prime Minister Justin Trudeau announced a suite of new measures to support small business.
“Small business owners and entrepreneurs are the backbone of our economy and make our communities better places to live – but they’re facing difficult decisions and are worried about the coming months,” Trudeau said.
In addition, under the new Canada Emergency Business Account, storefront businesses will also qualify for up to $40,000 in loans which will be interest-free for one year, with up to $10,000 forgiven, he said. Business owners will have until June to pay GST and HST payments while taxes on imports will also be suspended.
Trudeau said that this is the equivalent of $30 billion in loans, interest free.
The subsidy is only available to Canadian-controlled private corporations or businesses who are paying salary, wages, bonuses or remuneration between March 18 and June 20. .
“We hope these new measures will encourage employers who felt forced to lay off their employees to keep them on the payroll, and for those who did lay off their employees will hire them back,” he said.
Last week, during the unveiling of the $82 billion in relief to those hard hit by the COVID-19 pandemic, Trudeau announced a 10 per cent wage subsidy for businesses. On Friday, he said government officials have heard from business owners that that isn’t enough.
The increased subsidy will be retroactive to March 15. Finance Minister Bill Morneau wouldn’t confirm whether the wage subsidy would have a cap, saying more details will be rolled out soon.
The Canadian Chamber of Commerce called the subsidy boost “exactly what the doctor ordered.”
The announcements comes as the Bank of Canada implemented an unscheduled cut to its bechmark interest rate, bringing it down to 0.25 per cent.
Trudeau said further details on how the new supports will be implemented can be expected by Monday.