Prime Minister Justin Trudeau has announced the federal government will be increasing its wage subsidy for small and medium-sized businesses to 75% to avoid layoffs.
According to Trudeau, this move will be backdated to March 15.
He said that small and medium businesses are the backbone of the community, “these places make our communities feel like home.”
Friday’s announcement was an increase from last week’s initial 10% wage subsidy from the federal government.
“We want our economy to recover from this,” said Trudeau, as he announced the new Canada Emergency Business Account, which will allow banks to offer $40,000 loans that will be interest-free for the first year. Of that, $10,000 can be “forgiven” according to Trudeau.
According to the Government of Canada website, small businesses and not-for-profits should contact their financial institution to apply for these loans.
“To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25% (up to $10,000).”
Additionally, there will be $12.5 billion available through Export Development Canada and the Businesses Development Bank of Canada to help with cash flow.
Trudeau also said the government will defer HST and GST payments and custom duty payments until June.
“With these new measures, our hope is that employers being pushed to laying off people due to COVID-19 will think again,” Trudeau said. “And for those of you who have already had to lay off workers, we hope you will re-hire them.”
The prime minister said that further details on today’s new wage subsidy measures will be announced on Monday.
The House of Commons passed the emergency bill for Canada’s $82 billion aid package for those affected by the coronavirus on Wednesday.
The Canada Emergency Response Benefit (CERB) was announced at the time, and it will allow applicants to receive $2,000 a month for the next four months for those who have lost their income during the coronavirus pandemic.
The CERB would be paid every four weeks and be available from March 15 until October 3, 2020.
Last week, Trudeau announced economic measures the government is taking to help Canadians during the coronavirus pandemic.
The $82 billion aid package represents 3% of the country’s GDP, Trudeau said.
This includes a $27 billion fund that will be directly supporting businesses and individuals, as well as $55 million put forward in tax deferrals.