On March 27, 2020, Prime Minister Justin Trudeau announced that the federal government is increasing the amount of wage subsidies available to businesses. In addition to the 10% wage subsidy announced last week for small businesses (the “Wage Subsidy”), the government has announced a separate 75% wage subsidy in an effort to help prevent layoffs and help employers bring laid-off employees back to work. This subsidy will be retroactive to March 15, 2020.
Although the eligibility criteria for the new subsidy are still unclear, Prime Minister Trudeau stated that more details will be available “very soon”, and suggested the government intends to release more information on Monday.
Moreover, the Prime Minister also announced that the federal government will also be assisting employers with a Canada Emergency Business Account that will provide small businesses with up to $40,000 each in government-guaranteed loans from Canadian banks that will be interest-free for the first year. Further, up to $10,000 of these loans will be forgivable in certain circumstances.
The government also announced that it is increasing the Business Credit Availability Program from $10 billion to $22.5 billion, under which Export Development Canada and the Business Development Bank of Canada will coordinate with private sector lenders to provide credit solutions for Canadian businesses experiencing cashflow issues.
Finally, the government announced that GST/HST payments and duties and taxes on imports will be deferred until June 2020, which it estimates will be equivalent to $30 billion in interest-free loans for Canadian businesses.
We will provide updates on these new measures as they become available.
This blog is provided as an information service and summary of workplace legal issues. This information is not intended as legal advice.