The Federal Government has made changes to the previously announced CEWS and CEBA.
Canada Emergency Wage Subsidy (CEWS)
The CEWS will now be extended until August 29, 2020.
The Government has said that it will be consulting with business and labour representatives over the next month on potential adjustment to the CEWS program to incent jobs and growth, including the 30% revenue decline threshold. Any potential changes following the consultation will have as key objectives to maximize employment, ensure the CEWS reflects the immediate needs of businesses and support the post-crisis economic recovery.
Canada Emergency Business Account (CEBA)
The CEBA allows qualifying Canadian small businesses and not-for-profits to access interest-free loans of up to a $40,000 interest-free loan, to help cover their operating costs during a period where revenues have been temporarily reduced, due to the economic impacts of the COVID-19 pandemic.
Previously the CEBA was available to businesses with payroll between $20,000 and $1.5 million. The CEBA program will now be expanded to include businesses that are sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll.
To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:
- a business operating account at a participating financial institution;
- a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return; and
- eligible non-deferrable expenses between $40,000 and $1.5 million
Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. These expenses will be subject to verification and audit by the Government of Canada.
Funding will be delivered in partnership with financial institutions.
Further details, including the launch date for applications under the new criteria, will follow in the days to come.