COVID-19: CECRA Update, Application Portals Live Soon, and Relief Round-up
Canada Emergency Commercial Rent Assistance (CECRA)
We previously wrote about the CECRA program in our blog post found here.
Today, the Prime Minister confirmed negotiations with the provinces were finalized in principle on this. Qualifying commercial property owners will receive forgivable loans to cover 50 per cent of three monthly rent payments payable by eligible small business tenants experiencing financial hardship during April, May and June. Eligible small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.
The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible tenant’s rent by at least 75 per cent for the three corresponding months under a rent forgiveness agreement, which will include a pledge not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25 per cent of the rent.
While the program’s availability and success requires the goodwill participation of landlords, the government is clearly hopeful that landlords will see the long-term benefit of some short-term loss to them by participating in the program. Further details, including on the application process are still to come.
Application Portals Going Live in the next 7 days
Canada Emergency Wage Subsidy (CEWS)
On Monday, April 27, 2020, the online application portal for the CEWS will open. We recommend that businesses familiarize themselves with the eligibility criteria and if qualified, take all necessary steps to prepare for the CEWS launch which will be of extraordinary benefit to Canadians from coast-to-coast. While we have written on the CEWS in past newsletters and blog posts, the most current information on the CEWS is available here.
The government has launched a calculator on the new CEWS webpage through the CRA website. This calculator is intended to allow business owners to see exactly what will be covered by the government and what they can expect to claim. Given that significant penalties can attach to overpayments through false claims, it is important to use the calculator and take care in determining what amount your organization should claim. The calculator can be found here.
The CEWS is intended to help employers re-hire and retain employees so that they are in the best position possible when business begins to return to ‘normal’. The government anticipates that 90 per cent of applications will be processed by May 5th with direct deposits and cheques being sent out soon after. Until then businesses are encouraged to go to the CRA website and update their business account.
BC Emergency Benefit for Workers
Applications open on May 1st for the one-time $1,000 lump sum BC Emergency Benefit for Workers. Information on eligibility and how to apply can be found here.
Round-up of other recent funding announcements
Several announcements were made by Prime Minister Justin Trudeau and the federal government over the past week, raising the total cost of the federal government’s COVID-19 response plan to over $145 billion, assuming all of the funding announcements come to fruition. Most of the more notable federal government announcements are summarized below, many of which we note still require legislation to implement and as such, are subject to change:
- On April 22, 2020, $9 billion worth of funding announcements were revealed to create jobs, placements and training opportunities for students as well as to provide financial support to students and those who employ them. Some of the package includes:
- An expansion to the Canada Summer Jobs Program (CSJ), with an additional 76,000 new jobs added to it. Specific support will be included in the CSJ for Indigenous students with $75 million dedicated in support to Inuit, First Nations, and Métis students.
- A new Canada Service Student Grant (CSSG) was announced to support students who are helping respond to the COVID-19 crisis through volunteering opportunities. Student volunteers will be eligible to receive between $1,000 to $5,000 depending upon their volunteer hours.
- Other funding was announced to extend certain scholarships, fellowships and grants by 3-4 months. This funding is intended to support up to thousands of student researchers and post doctoral fellows, who themselves may be employing others through their work. The federal government also raised the availability of micro grants to enable young people to design and implement projects that make a difference in their communities.
- New emergency funding was proposed for students in the form of the Canada Emergency Student Benefit (CESB). The federal government acknowledged that many students were ineligible for CERB, and this funding is intended to help post-secondary students who were going to begin school in September and also those who graduated in December 2019. CESB will be available over a 4-month period from May 1st through August 31, 2020. Students can receive $1,250 per month, though those who have a disability or have dependents qualify for an addition $500 per month. CESB is intended to be retroactive to May 1, 2020 once implemented.
- On April 21, 2020, $350 million was announced through the Emergency Community Support Fund for community support organizations such as charities and non-profit organizations that provide essential resources to those most vulnerable in Canadian society. A portion of the announced funding will go directly to small independent organizations and the rest will go to national organizations such as United Way and the Red Cross. The money will assist with things such as training volunteers, increasing at home deliveries to seniors, and transportation for those with disabilities.
- On April 18, 2020, $306.8 million in new funding was announced to support Indigenous businesses through short-term interest free loans (with non-repayable grants) to Indigenous businesses. This funding will be provided through Aboriginal financial institutions and administered by the National Aboriginal Capital Corporations Associations. On April 23, 2020, the government clarified that these loans are intended to operate like the Canada Emergency Business Accounts already in place across the country.
- On April 17, 2020, $1.7 billion in funding was announced to clean up inactive and abandoned orphan wells in BC, Alberta and Saskatchewan. In British Columbia alone, approximately 12,000 inactive wells need tending to. This funding will assist employees working in this industry, as well as restore land use, assisting both indigenous communities and municipalities. This new funding will create immediate jobs while assisting companies in avoiding bankruptcy by providing support. It is projected that 5,200 jobs will be maintained in Alberta alone. In addition, the federal government made further announcements on April 17th:
- They will work with the BDC (Business Development Bank of Canada) and EDC (Export Development Canada) to strengthen credit support to medium seize energy companies that are particularly at risk;
- $962 million funding will be provided to regional development agencies and community future networks to allow more small businesses in rural areas that do not have relations with traditional financial institutions to receive support they need during this crisis;
- $270 million will be provided to Futurpreneur Canada and the Industrial Research Assistance Program to support innovators and other start ups that do not qualify for CEWS, but still require assistance; and
- $500 million will go to Heritage Canada to support artists, creators and rising stars of sporting associations. This funding will assist with wage support and help organizations struggling with cash flow to access financing.
We note again that many of the foregoing proposed funding announcements still require legislation and Parliamentary approval.
In the ever-changing wake of COVID-19, governments continue to adapt and introduce new measures supporting employers and employees in British Columbia and throughout Canada. Further direct changes to labour relations law and employment law are possibly on the horizon as well.
We encourage businesses to stay apprised of the forms of relief becoming available for them and their employees. Our lawyers remain available to advise on all workplace law matters experienced by you or your business as this situation continues to evolve. Please do not hesitate to contact us if we can be of assistance to you during this challenging time.