Extended CEWS, CEBA and NEW CERS (Rent Relief)
There were some big announcements by the federal government last week designed to help private companies who have been severely impacted this year’s craziness.
Here’s what you need to know:
Canada Emergency Wage Subsidy (CEWS)
- The CEWS program will be extended until June 2021;
- Previously, the subsidy was set to start declining, however the current subsidy rate (maximum 65% of eligible wages) will remain in effect until December 19, 2020.
- There is no indication of what the subsidy level will be between December 19, 2020 – June 2021, leaving the government with flexibility to assess the situation later.
Canada Emergency Business Account (CEBA)
- The government will offer an additional $20,000 interest free loan (on top of the existing $40,000 CEBA), 50% ($10,000) of which will be forgivable if it is repaid by December 31, 2022;
- Business owners will be required to attest to the continued impact of the pandemic on their business in order to obtain the additional funding, (note that this was not a requirement to get the original $40k CEBA loan).
- The application deadline for CEBA, which was recently extended to October 31, 2020, is further extended until December 31, 2020;
- Details on about the application process and when the funds will be available will be announced in the coming days.
Canada Emergency Rent Support (CERS)
- This is a new rent relief program that has been designed in the wake of the failed Canada Emergency Commercial Rent Assistance (CECRA).
- It will subsidize up to 65% of ‘eligible expenses’, on a sliding scale, based on the business’s drop in revenues.
- The program to be delivered similarly to, and for similar periods as, CEWS. We assume that the revenue decline test will also be like the CEWS.
- There is an additional top-up of 25% for organizations that have been temporarily shut down by mandatory public health orders issued by a ‘qualifying public health authority’ (in this case up to a 90% subsidy – 65% + 25%).
- This appears to be a 3-month program, from September 27, 2020 – December 19, 2020. We find this unfortunate since the original CECRA was an outstanding flop. We would have liked to see this program extended retroactively to the beginning of the pandemic.
- There will also be support for property owners in some form (the release from finance refers to interest on commercial mortgages).
Alberta government program updates
Don’t forget about the $5,000 Alberta SME Relaunch Grant: Eligible organizations resident in Alberta can apply to receive a grant of 15% of their pre revenues, up to a maximum of $5,000. Among other criteria, applicants must have less than 500 employees, have been ordered to close or curtail operations through a public health order, and have experienced a revenue decline of 50% during April and/or May of 2020 compared to the same period last year OR February 2020. For additional details, visit the Alberta Government’s website (link).