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COVID-19: How the federal government is supporting small business

After weeks of lockdown, provinces are finally reopening.

But the battle isn’t over yet. Many small businesses will need substantial relief from the federal government throughout the recovery phase in order to survive.  

Here's what the federal government is doing to support small business. We will continue updating this page with the latest information as it becomes available—and continue pushing governments for greater relief.

For all the details, read the federal government’s full program

Canada Emergency Wage Subsidy (CEWS)

Government is providing a wage subsidy until December 19. It is introducing a sliding scale method to replace the all or nothing 30% revenue test that will make every employer experiencing a revenue drop eligible to receive some support. The bigger the loss, the greater the subsidy and vice versa. For the July and August period, however, employers will be able to choose the criteria that is most advantageous to their business; either continue using the previous 75% CEWS design if revenue decline is 30% or higher or start using the new rules. From September onwards, businesses must apply under the new rules. Learn the the six most important changes to CEWS.

The application process has been available through CRA’s My Business Account since April 27. More details from the government are available here

For more information including who is eligible and how to calculate your reduction in revenue, visit our COVID-19 FAQ.

$40,000 Canada Emergency Business Account (CEBA)

CEBA is a lending program that can help small firms pay expenses that cannot be deferred during this challenging period. The loans are interest-free, backed by the Government of Canada and forgivable up to $10,000 when paid back by December 31, 2022. Banks are administering these loans in different ways. Some offer a $40,000 term loan; others offer a line of credit up to $40,000 – sometimes through a zero-interest credit card. 

Small businesses and not-for-profits should contact their financial institution to apply for these loans. Here are the details for the main financial institutions:

For more information on CEBA including who is eligible and what do if your application is rejected, visit our COVID-19 FAQ.

Canada Emergency Commercial Rent Assistance Program (CECRA) 

On April 16, 2020, Prime Minister Trudeau announced a new rent assistance program aimed at those with commercial properties for the months of April, May and June. This program is provided through Canada Mortgage and Housing Corporation (CMHC) to offer a forgivable loan to voluntary, eligible landlords with eligible tenants. This forgivable loan will lower rent by 75% for eligible small businesses that have experienced financial hardship due to COVID-19 and will prevent them from being evicted from April to June. The small business tenant would cover the remaining 25% of the rent.

For more information including how to open a dialogue about the program between landlord and tenant and where to apply for the program, visit our COVID-19 FAQ.

Canada Emergency Response Benefit (CERB)

If you have lost income because of COVID-19, the CERB will provide you with temporary income support, whether you are EI-eligible or not. CERB will give you a flat rate of $2,000 per month for up to four months. The benefit is taxable, but no tax will be taken directly from the cheque. Instead, it will be payable next year.

The CERB will cover workers residing in Canada who:

  • Have lost their job.
  • Are sick, quarantined or taking care of someone who is sick with COVID-19. 
  • Are working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. 
  • Are still employed but are not receiving any income because of COVID-19 disruptions to their work situation.

and:

  • Had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application (could be employment income, self-employment income or dividends from a business taxed at the small business rate); and
  • Are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment income

For more information about CERB including how you can apply and whether you can receive CERB while employed, visit our COVID-19 FAQ.

Business Credit Availability Program (BCAP)

The BCAP provides $40 billion of additional support to businesses experiencing challenges through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). The BCD & EDC work together with eligible financial institutions to offer you solutions through your regular financial institution. Please speak to your financial institution account manager to determine what help is available to your business.

This program includes administration of the CEBA loan, loan guarantees and co-lending programs for small and medium-sized enterprises. 

For more information about the BCAP including how to access the program, visit our COVID-19 FAQ.

Regional Relief and Recovery Fund (RRRF)

The Regional Relief and Recovery Fund is $962 million given to Canada’s 6 Regional Development Agencies (RDAs) to redistribute in the form of:

  • $675 million in RRRF loans

  • $287 million in Community Futures Development Corporations programs which target small businesses and rural communities across the country

The application process is open now, but program details vary at each RDA. Some RDA programs supplement pre-existing government COVID-19 relief while other RDA programs are only available to those denied government COVID-19 relief.

There are 6 different Regional Development Agencies.

  1. Atlantic Canada Opportunity Agency (ACOA) - NS/NB/PE/NL 

  2. Canada Economic Development for Quebec Regions (CED) - QC

  3. Canadian Northern Economic Development Agency - YT/NT/NU

  4. FedDev Ontario (Southern Ontario) - ON

  5. FedNor (Northern Ontario) - ON

  6. Western Economic Diversification Canada (WD) - AB/BC/MB/SK

For more information on the RRRF including how and where to apply, visit our COVID-19 FAQ.

10% Wage Subsidy

The 10% wage subsidy allows you to reduce the remittance of federal, provincial or territorial income tax that you send to the CRA by 10%, allowing you to keep a portion of your employees’ income tax. The subsidy only applies to remuneration paid from March 18 to June 19, 2020. It is available retroactively from CRA for eligible business owners who have not claimed it yet. 

Eligible employers are:

  • Canadian-Controlled Private Corporations (incorporated) eligible to the small business deduction and non-profit organizations and registered charities that:
    • Have an existing business number & payroll program account with CRA on March 18; and 
    • Pay salary, wages, bonuses, or other remunerations to an employee. 

For more information including how to calculate the subsidy and how to receive it retroactively, visit our COVID-19 FAQ.

Tax filing & Payments

There have been several changes to tax filing and payment deadlines due to the COVID-19 crisis. For example:

Deadline extensions

  • Individuals had until June 1, 2020, to submit their income tax return.
  • For trusts (having a taxation year ending on December 31, 2019), tax filing was deferred until May 1, 2020. 

Payment Deferrals 

Individuals and businesses can defer their income tax payment (for taxes owed between March 18, 2020 and September 2020) until after August 31, 2020. 

Payment deferrals for GST/HST remittances

Businesses have until June 30 to remit GST/HST due to the government. This applies to: 

  • Monthly filers for amounts collected in February, March and April.
  • Quarterly filers for amounts collected between January 1 and March 3.
  • Annual filers, whose GST/HST returns or instalments are due in March, April or May. 

For more information including a provincial breakdown of tax deferrals and links to application forms, visit our COVID-19 FAQ

Other CRA measures to help small businesses

The CRA has implemented several other measures to help you through this crisis. These include:

  • Boosting Canada Child Benefit payments by 300$ per child.
  • Recognizing electronic signatures as having met the signature requirements of the Income Tax Act as a temporary administrative measure.
  • Eliminating most post assessment GST/HST or Income Tax audits until further notice.
  • Suspending collections activities on new debts until further notice and making flexible payment arrangements available. More details here.
  • The Liaison Officer Service, which will be available over the phone to discuss tax measures that are being put in place to help small business owners and self-employed individuals in the face of COVID-19. Request a Liaison Officer here.

For more information about CRA support measures, visit our COVID-19 FAQ.

EI sickness benefits

Regarding the EI sickness benefits: 

  • The one-week waiting period is waived for 6 months for workers in imposed quarantine or who have been directed to self-isolate. Application may still take several weeks.
  • There is no need for a medical certificate to apply.
  • Applications to sickness benefits after March 15 and not yet processed will be automatically considered as an application to CERB. 

Note: For your employee to receive their first payment faster, please ensure thatyou do not use the ROE code K. It will pull the ROE out of automatic processing.

For more information about completing your ROE, visit our COVID-19 FAQ.

Work Sharing Program

The Work Sharing Program is a three-way agreement that can be negotiated between Service Canada, the employer and the employee to provide EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers. Due to the pandemic, the program has been changed so that:

  • The maximum duration is 76 weeks rather than 38 weeks. 
  • The 30 day wait period will be waived solely for those who have used the work-sharing program in the past. 
  • Applications will be accepted within 10 days instead of 30. 

For more information including who is eligible and how to apply, visit our COVID-19 FAQ.

Canada Post

Canada Post ended its new sign-ups for the free Hold Mail service and the free Mail Forwarding service as of August 1, 2020. However, businesses that registered before August 1, 2020 – and still require the Hold Mail or Mail Forwarding service – can continue receiving either for free if they renewed the service before August 1. All Hold Mail and Mail Forwarding service new sign-ups will be required to pay the full price as of August 1, 2020.

Mail Hold service:

Residential and business customers can get free mail holding by registering online. Canada Post will refund the fee after purchase.

Mail Forwarding services:

By using Canada Post’s online mail-forwarding service you can have business mail forwarded to an address of your choosing.

If you subscribed to this service after March 13, Canada Post will refund your purchase when you cancel the service.

For more information see the Canada Post Q & A

Canada Summer Jobs Program

The temporary changes to the Canada Summer Jobs Program for this year include:

  • Increasing the wage subsidy from 50% to 100% of the provincial or territorial minimum hourly wage for each employee.
  • Extending the end date for employment to February 28, 2021.
  • Allowing employers to adapt their projects and job activities to support essential services.
  • Allowing employers to hire staff on a part-time basis.

Check out the government websites for more on the Canada summer jobs program requirements & the changes announced by Trudeau.

What is CFIB doing?

Since the beginning of the pandemic, CFIB has listened to its members and worked overtime to push policy makers at all levels of government to provide economic relief measures for small businesses. 

CFIB has heard from small business owners through phone calls, emails, social media, webinars and our regular surveys describing how difficult this time has been. We are relaying these stories and survey results to all levels of government so they can quickly understand the challenges facing small businesses across Canada. Your feedback drives our policy proposals and lobbying efforts to get relief measures for the many small businesses that desperately need them. 

Here are some highlights of what CFIB has been able to get from the federal government since the start of the current crisis:

  • Expansion of the work-sharing program 
  • Pause on non-essential audits
  • Deferral of payment of any income tax amounts and suspension of penalties 
  • Deferral of GST/HST payment until June 30 
  • Introduction of a 10% wage subsidy program 
  • Expansion of the Canada Emergency Response Benefit (CERB) to include the self-employed
  • Expansion of the Canada Emergency Wage Subsidy (CEWS) to a 75% wage subsidy program
  • Changes to the CEWS to allow more firms to access it. These include:
    • Revenue drop test to access the program lowered to 15% in gross revenues for the month of March (still at 30% for April and May)
    • A firm will be able to compare their sales to the same month last year OR January and February 2020. This will help new and growing firms who may not have qualified based on a comparison to last year
    • Introducing the option to use cash accounting in place of the accrual method
    • The extension of CEWS beyond the current June 6th limit
    • The removing of the 30% revenue drop test which ensures more small firms can access the program. 
    • The introduction of a sliding scale, where firms are able to qualify for a smaller wage subsidy with a smaller revenue loss.
  •  Introduction and improvement of the Canada Emergency Business Account (CEBA) to provide some cash to address fixed costs. CEBA provides up to $40,000 interest free loans with 25% forgivable if paid back by end of 2022. 
  • Expansions to CEBA include eligibility for:
    • Businesses with a total payroll lower than $20,000 in 2019
    • Sole proprietors who have 40,000 to 1.5 million in non-deferrable expenses
    • Businesses that employ contractors
    • Businesses that pay in dividends 
  • Introduction of the Canada Emergency Commercial Rent Assistance (CECRA) program to provide rent relief to struggling businesses. 
  • Canada Post eliminating the fee for mail forwarding 
  • BDC opening financing to bars, clubs and cannabis businesses 
  • Dividends to be considered eligible revenue to calculate the $5,000 minimum income in the last 12 months to be eligible to CERB.
  • Financial support for farmers and the agri-food sector to help pay the cost of the mandatory 14-day isolation period required of all workers arriving from abroad, establishing the Emergency Processing Fund and launching national AgriRecovery initiatives
  • Cancellation of penalties and interest and flexible payment arrangement offered by the CRA to businesses in making their GST/HST remittance or payment or filing a GST/HST return. 

We are working hard to ensure that all small businesses in need have access to support programs that will help them get through this crisis and thrive once it is over. 
CFIB will continue proposing changes and improvements to all the major support programs based on your feedback. 

Read our full list of recommendations below. 

Improving the Canada Emergency Commercial Rent Assistance Program (CECRA)

Government should:

  • Allow tenants to access CECRA rent support directly, regardless of their landlord’s participation
  • Provide a sliding scale of rent support under CECRA for those with various levels of revenue losses over the months ahead, as has happened with CEWS

 

Improving the Canada Emergency Wage Subsidy (CEWS)

Allow working business owners who paid themselves in dividends to be eligible to an equivalent-to-wage subsidy, as long as they are also applying on behalf of payroll employees or allow business owners who currently pay themselves with dividends to convert their dividends to a salary during the COVID-19 emergency period in order to include their own income in the subsidy amount.

Show flexibility when CEWS audits are done in the future around the amounts to be paid back should the revenue drops fall short of the 15% or 30% threshold. If a business is 5% or less short of the threshold there should not be any expectation that it will repay the subsidy. 

Make the employee, not employer, accountable for ensuring there is no overlap between CEWS and CERB. Do not place the burden of verifying if a returning or new employee is already receiving other benefits on the employer as it may deter re-entry into the workplace. This could be addressed in 2020 income tax return for employees.
 

Improving the Canada Emergency Response Benefit (CERB)

CERB should continue to be used as an income support program for those who have lost their jobs due to the pandemic and to temporarily cover sick leave for people who are required to stay at home because of COVID-related isolation requirements. This includes illness, caring for ill family members or caring for children while schools are closed, instead of adding another 10 days of paid sick leave.

As the economy starts to reopen, CERB should be changed so that those who are called back to work cannot continue to receive it without evidence of illness related to COVID 19.

Current CERB users should be expected to be available and looking for work – similar to the requirements of the EI system.

Consider allowing CERB benefits to be scaled back as employment earnings get scaled up. This would encourage more people to go back to work and gradually earn more money without the fear of reaching the “cliff” which only allows them to earn up to $1,000 without being required to pay back the entire CERB amount.

Step up job matching efforts in order to assist employees permanently displaced from former jobs and employers looking to fill new openings.

The EI system should not be amended to handle any of these tasks so as not to add even more costs to employers and employees when they can least afford it.

Improving the Canada Emergency Business Account (CEBA)

Government should:

  • Increase both the total amount of the forgivable loan and the forgivable portion—the initial $40,000 may not be enough for many businesses still shut down or facing long recovery periods.
  • Expand eligibility to firms with a 2019 payroll above $1.5 million.
     
Improving the Regional Relief and Recovery Fund (RRRF)

Government should:

  • Limit the paperwork required to access these funds.
  • Ensure the money flows fast to those who need it.  
     

FAQ on COVID-19

We’re dedicated to supporting your business through this difficult time by compiling answers to the most common COVID-19 questions and keeping you up to date on the latest relief measures from the provincial governments. Visit our COVID-19 Small Business Help Center to learn more.