Commercial Rent Relief Program Opens But Businesses Say It Will Help Few

As of May 25, commercial landlords can begin applying for a government rent relief program, but struggling businesses say it will benefit few of them. The Canada emergency commercial rent assistance (CECRA) program aims to reduce the rent owed by small business tenants by 75% for April, May and June.  Applications are staggered depending on the province where the property owner is located and how many tenants the landlord has; applications started today for property owners in Atlantic Canada, British Columbia, Alberta and Quebec, with 10 tenants or fewer.

Prime Minister Justin Trudeau said one of the biggest problems facing struggling businesses now is paying rent.  “Some are ready to open their doors as soon as they get the green light that it’s safe to do so. But for many more, getting back on their feet will be a challenge,” he said.  

The rent relief plan, funded jointly with the provinces, provides non-repayable loans to commercial property owners to cover 50% of the monthly cost.  The loans will be forgiven if the property owner agrees to cut the rent by at least 75% for those months and promises not to evict the tenant. The small business tenant must cover the remaining portion of the rent, which would be up to 25%.  

To qualify, small business tenants must pay less than $50,000 a month in rent. They also must have experienced a revenue decline of at least 70% from pre-COVID-19 levels, or they must have been forced to close down because of pandemic restrictions. Non-profit and charitable organizations are also eligible. Small Business Minister Mary Ng urged landlords to take advantage of the program to help their tenants.  “This isn’t just about doing the right thing. It is also making financial sense for you as a landlord, because if your tenant declares bankruptcy and is evicted, you will lose all the steady stream of income you depend on, and you would face additional costs as you search for the new tenants,” she said.  Ng said the money is expected to flow next week.  

The NDP say the structure of the program leaves business tenants at the “mercy” of their landlords.  NDP MPs Peter Julian and Gord Johns wrote a letter to Ng and Finance Minister Bill Morneau on May 25 asking for changes that would allow tenants to access the subsidy directly.  

The Canadian Federation of Independent Business says many small businesses won’t be able to make June rent without more assistance. Through a survey of its members, the organization found that most commercial tenants don’t think they will qualify and don’t think their landlord will participate.  With many fearing eviction, the CFIB is calling on the government to provide direct access to the government portion of the program.

New Grants from The Canadian Chamber of Commerce and Salesforce
The Canadian Chamber of Commerce announced on May 25 that it is launching a small business relief fund supported by the software company Salesforce. It will give 62 small businesses $10,000 grants to pay salaries, buy personal protective equipment, replenish materials or adapt business models to deal with COVID-19.  The chamber says the funding will go to the applicants who best demonstrate how the funds will help their businesses, their employees and their communities with economic recovery efforts.

New Financial Advice Service for Small Businesses
Also on May 25, the government announced a new customized financial advice service to help small businesses recover from the pandemic. The free hotline is meant to help vulnerable businesses with pressing financial needs navigate tax regulations and government supports to plan a path to recovery.  Set up by the federal government in partnership with the Canadian Chamber of Commerce, the business resilience service hotline (1-866-989-1080) will be serviced by 125 business advisers and chartered accountants seven days a week.

Canada Emergency Commercial Rent Assistance (CECRA)

Source: CBC

Applications Open for Government Loan Program for Businesses Taking Financial Hit From COVID-19 

Applications opened on May 20 for a program that will deliver bridge loans with no upper limit for big Canadian businesses struggling to keep employees on the payroll through the pandemic.  Finance Minister Bill Morneau said the program aims to help large corporations experiencing “extreme stress” survive the economic downturn caused by the COVID-19 crisis. Called the Large Employer Emergency Financing Facility (LEEFF), big companies across most sectors will now be able to apply to access millions in additional liquidity to keep their operations going and avoid bankruptcy.

The program is intended to be a short-term offering until these firms can access traditional market financing, the government said on May 20. Eligible companies are those who can demonstrate having a “significant impact” on the Canadian economy, by having a large workforce or operation in Canada, and commit to keeping their domestic business activities alive with the assistance of the loan.

Eligible companies have annual revenues of $300 million or higher and are seeking loans of $60 million or more. Businesses in the financial sector are not eligible, nor are any firms convicted of tax evasion in the past. Morneau said there is no upper limit on these loans.

The loans are being offered for the next 12 months, and the size of each loan offered will vary on a case-by-case basis dependent on a businesses’ need. The application process includes a non-disclosure agreement and companies can apply as long as the “current economic situation persists.” 

The large loans come with a series of uniform terms and conditions that Morneau said are aimed at protecting Canadian taxpayers. This includes agreeing to allow the government to take an ownership stake in publicly-traded companies. If not publicly-traded, then companies will have to put a up cash equivalent to ensure that existing lenders share in the risk. In all cases, these companies will need to agree to a strict limit on their ability to issue dividend payments, share buy-backs, and capping executive compensation at $1 million.

Big businesses looking to secure this financial assistance also need to sign attestations committing to report annually on how their operations are supporting environmental sustainability and national climate goals. The program is being delivered through a subsidiary of the Canada Development Investment Corporations.

Loans will be provided in tranches over the next year. The duration for the unsecured part of the loan will be five years, while the secured amount can be paid back at any time without penalty.

Ongoing Push to Rehire
These financial aid programs are part of the government’s ongoing push to encourage employers to bring their employees back on the payroll, after two months of job losses prompted by the pandemic. “We want to make sure employers get the support they need to get through to better times so that Canadian jobs are protected,” Morneau said during a news conference in Toronto.

Between March and April approximately three million Canadians lost their jobs, and the unemployment rate has soared to 13%, the second highest unemployment rate on record, according to Statistics Canada.

Large Employer Emergency Financing Facility (LEEFF)

Source: CTV News
Source: CBC

Emergency COVID-19 wage subsidy program extended to end of August

The government’s emergency wage-subsidy program will be extended to the end of August to help employers keep their workers on the payroll during the pandemic, Prime Minister Justin Trudeau said on May 15. The program — which covers 75% of an eligible company’s payroll, up to a maximum of $847 per week per employee — originally was set to expire next month. “You have some runway to catch your breath as you get restarted,” Trudeau said in his prepared remarks. “So please, bring back your workers.”  

Companies that saw their revenues drop by 15% in March or 30% in April and May are eligible for the program — but Trudeau hinted changes could be coming to that threshold. “As businesses start up again, this shouldn’t become a barrier to growth,” he said.

During a separate briefing, Finance Minister Bill Morneau said the program will now be available to registered journalism organizations, registered amateur athletic associations, Indigenous government-owned corporations and non-public colleges and schools, including arts, driving, language and flight schools. The government will consult businesses and labour representatives over the next month about other possible adjustments to the program to promote jobs and growth, said Morneau.  

Trudeau and other members of his cabinet have been promoting the wage subsidy as a way to keep Canadians employed instead of leaving them to draw on the $2,000 per month Canada Emergency Response Benefit. As of May 11, more than 123,000 businesses have been approved for the emergency benefit, to cover close to 1.7 million workers’ wages. As of May 14, meanwhile, the government has received more than 13 million applications from nearly eight million Canadians for the CERB.  “As the economy reopens, there is a danger of unintended consequences,” said Trudeau.

“So we’re going to work with industry, work with labour, work with stakeholder groups to make sure we’re getting it right, but that wage subsidy is going to be a really important part of the coming months of recovery.”  The original program was pegged to cost $73 billion, although just $3.36 billion in subsidies has been paid out so far.  Morneau said it’s not clear how much the expanded program will cost.

Canada Emergency Wage Subsidy (CEWS)

Source: CBC

Ottawa Expands Canada Emergency Business Account to Include Sole Operators and Others

Ottawa is expanding its emergency business loan program to include more businesses, including those with no payroll. The Canada Emergency Business Account (CEBA) is a program that provides zero-interest, partially forgivable loans up to $40,000 to small businesses with payrolls between $20,000 and 1.5 million experiencing reduced revenues due to COVID-19. Announced April 9, the program is aimed at helping businesses pay non-deferrable operating costs like rent and utilities. 25% of this loan is forgivable if repaid by December 31, 2022.

Prime Minister Justin Trudeau announced that the CEBA will now be available to businesses with payrolls under $20,000 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.

“If you are the sole operator of a business, if your business relies on contractors, or if you have a family-owned business and you pay employees through dividends, you will now qualify,” Trudeau said. “For example, for a hair salon owner with stylists who rent chairs, for a local physiotherapist, for an independent gym owner with contracted trainers, this is for you.”

In order to be eligible, the newly qualified businesses will need an operating account at a participating financial institution, a Canada Revenue Agency business number, to have filed a 2018 or 2019 tax return, eligible non-deferrable expenses between $40,000 and $1.5 million, and eligible non-deferrable expenses such as rent, property taxes, utilities, and insurance.

According to a press release from the PMO, the government also plans to work on potential solutions to help business owners and entrepreneurs who operate through their personal bank account, as opposed to a business account, or have yet to file a tax return, such as newly created businesses.

Funding will be delivered in partnership with financial institutions and expenses will be subject to verification and audit by the Government of Canada. More details, including the launch date for applications under the new criteria, will follow in the days to come, Trudeau said. Ottawa says, to date, over 600,000 loans have been approved, representing a total of more than $24 billion in credit.

The Canadian Chamber of Commerce issued a statement saying it welcomes the news as it means many more businesses with non-deferrable expenses between $40,000 and $1.5 million will now qualify, but said the requirement for businesses to have an account with a financial institution to qualify poses a roadblock.

In an emailed statement, the Canadian Federation of Independent Business (CFIB) said it welcomes the expansion of the eligibility criteria for CEBA program to include businesses with no payroll, but further recommends that the government increase eligibility for the program, the total amount of the loan, as well as the forgivable portion.

“The initial $40,000 may not be enough for many businesses who continue to be shut down or those facing a long recovery period,” CFIB president Dan Kelly said in the release. “Businesses with a 2019 payroll above $1.5 million are also still excluded despite many needing help.”

Meanwhile, the CFIB continues to push for changes to the Canada Emergency Rent Assistance program, saying “too many businesses” don’t have access to it unless their landlords participate. The federation is asking the government to allow commercial tenants who qualify for the program to get the 50% break on monthly rent provided by the government if their landlord doesn’t want to participate.

Canada Emergency Business Account (CEBA)

Source: Chronical Heareld
Source: 660 News

Canada-U.S. Border to Remain Closed to Non-Essential Travel for Another Month 

An agreement has been reached between Canada and the United States to keep the border closed to all non-essential travel for another month, Prime Minister Justin Trudeau announced on May 19, calling it the “right thing” to do. He is cautioning that it could be months still before non-essential travel is allowed. The extension on the existing agreement means that the border restrictions will stay in place until June 21, even as parts of both countries begin gradually reopening. The agreement, as it stands, exempts the flow of trade and commerce, as well as vital health-care workers such as nurses who live and work on opposite sides of the border. Tourists and cross-border visits remain prohibited.

“The decisions that were taking are very much made week-to-week in this crisis. The situation is changing rapidly and we’re adjusting constantly to what are the right measures for Canadians to get that balance right between keeping people safe, and restoring a semblance of normality and economic activity that we all rely on,” said the prime minister.

Speaking about the agreement at the White House, U.S. President Donald Trump said that “as things clean up,” in terms of the COVID-19 pandemic, both sides will “want to get back to normal. We’re very close to Canada,” he said.

Talks had been underway since the week of May 11, with Canada wanting to see the travel limitations left in place, despite a growing push from Canadians who want to be reunited with loved ones who live across the border. The prime minister continues to emphasize that reopening Canada’s border to international travel would be risky as countries worldwide are still working to contain outbreaks and more robust contact tracing has yet to be established. “We will continue to watch carefully what’s happening elsewhere in the world, and around us as we make decisions on next steps,” Trudeau said.

In an interview on CTV’s Power Play, Public Safety Minister Bill Blair said the current agreement is “working well,” and Canada will continue to maintain the ban on non-essential travel “as long as it’s necessary.”

Ahead of the extension being announced, outgoing Conservative Leader Andrew Scheer said the government needs to put in place a clear plan for when a more broad reopening of travel could be possible, how that reopening would be managed and how further risks mitigated.“We’ve also heard from individual cases of hardship, for individuals who are separated because of the closure. We certainly have a lot of compassion for those spouses who have been separated, or children who don’t have access to one parent or another,” Scheer said.

14-Day Isolation Key: Tam
The prime minister said this extension gives Canada another month to figure out how to answer questions such as what further measures will be required when the border does reopen to ensure that people crossing the border don’t become vectors for further spread of the deadly respiratory virus in Canada. He said while planning is already happening on what “strong measures” will be imposed, it will become crucial once the time comes for non-essential travel to pick back up, which he estimates will be “in the coming months.”

Asked about what the public health argument is for continuing to keep the Canada-U.S. border closed and what the benchmarks will be for signs it’s an appropriate time to loosen those restrictions, Chief Public Health Officer Dr. Theresa Tam said the first step would be carefully reopening travel restrictions within Canada.

She said drastically limiting who has been able to enter the country over the last two months—nearly all international visitors—has been key to Canada controlling the outbreak.

Canadian health officials will continue to watch the United States’ epidemic and trajectory to see whether it will be appropriate come June 21 to lift restrictions or continue to maintain them. Further, Tam said that even when international travel can resume, the 14-day mandatory quarantine and follow up enforcement of that order will remain “a cornerstone” of the disease control measures.“Fundamentally, it’s about ensuring that whatever we do, the system is still able to detect and still able to cope with any introduction,” Tam said.  

Source: CTV News