Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented the Fall Economic Statement giving Canadians an idea of what this pandemic has cost our country so far and what additional support Canadians can expect as we continue to push through this crisis.
Here are some support highlights from the economic statement that may help MCC member companies:
NEW Highly Affected Sectors Credit Availability Program (HASCAP)
The government will work with financial institutions in the near term to create the Highly Affected Sectors Credit Availability Program (HASCAP) – a new program for the hardest hit businesses, including those in sectors, like tourism and hospitality, hotels, arts and entertainment. This stream will offer 100 percent government-guaranteed financing for heavily impacted businesses, and provide low-interest loans of up to $1 million over extended terms, up to ten years. Rates will be lower than those offered in BCAP and beneath typical market rates for hard hit sectors. No further details about HASCAP are available at this time.
Members have repeatedly indicated that borrowing more money from the government is not ideal and instead are seeking grants. At this time we have no indication that grant funds will be awarded.
Regional Relief and Recovery Fund (RRRF) Expansion:
The government announced the $962-million Regional Relief and Recovery Fund on April 17, providing significant funding through Canada’s Regional Development Agencies. The government increased funding on October 2, bringing total support to more than $1.5 billion.
- To better ensure the Regional Relief and Recovery Fund can continue to support small businesses unable to access other federal pandemic support programs, including replicating newly announced Canada Emergency Business Account loan limit increases, the government is proposing a top-up of up to $500 million, on a cash basis, to Regional Development Agencies and the Community Futures Network of Canada, bringing total funding to over $2.0 billion in this fund.
- The government is also proposing to provide up to $3 million to the Canadian Northern Economic Development Agency for foundational economic development projects that will support small businesses in Canada’s Territories.
- To better tailor support to businesses in Western Canada, in recognition of its diverse regional economies, the government proposes to introduce a new approach to regional development in the West by creating separate regional development agencies for British Columbia and the Prairies, adding a new, seventh Regional Development Agency in British Columbia. Additional details and investments will follow.
- Support for Tourism and Hospitality
Recognizing the importance of the Regional Relief and Recovery Fund in supporting local tourism businesses, the government will earmark a minimum of 25 per cent of all the Fund’s resources to support local tourism businesses, providing more than $500 million in program support through June 2021.
Several members have received funding under this program and MCC encourages members to consider exploring funds under the RRRF.
Note: The government is exploring options to enhance the Large Employer Emergency Financing Facility (LEEFF) program to respond to the specific liquidity needs of a greater number of large Canadian businesses.
Canada Emergency Rent Subsidy (CERS) Extension:
The recently launched Canada Emergency Rent Subsidy provides direct and easy-to-access rent and mortgage support from September 27 2020 until June 2021 for qualifying organizations affected by COVID-19. The current rate provides a subsidy, on a sliding scale, up to a maximum of 65 per cent until December 19, 2020.
- In order to support business through the second wave and the winter season, the government is proposing to extend the current subsidy rates of the Canada Emergency Rent Subsidy for an additional three periods, keeping the base subsidy rate of up to 65 per cent available until March 13, 2021.
Motor Coach Canada is seeking an exemption to the 25% top up requirement based on lockdown measures. The motor coach and tour sector is not operating regardless of where the business is located and therefore the lockdown qualifier should not apply.
Lockdown Support Program Extension:
Organizations that must shut their doors or significantly restrict their activities under a public health order due to a lockdown are eligible for an additional 25 per cent top-up, in addition to the Canada Emergency Rent Subsidy base subsidy of up to 65 per cent until December 19, 2020. This means hard-hit businesses can receive up to 90 per cent support for rent.
- The government is proposing to extend the rate of 25 per cent for the Lockdown Support for an additional three periods, until March 13, 2021.
Canada Emergency Wage Subsidy (CEWS) Expansion and Extension:
As previously announced in the Speech from the Throne, the Canada Emergency Wage Subsidy has been extended until June 2021. The government has also recently announced that the subsidy rates are to remain at their current level so that the maximum subsidy rate of 65 per cent of eligible wages would remain until December 19, 2020 and has made the wage subsidy more flexible by allowing employers to access the maximum subsidy rate based on a single month’s revenue decline instead of having to demonstrate three months’ decline.
- Given the ferocity of the second wave and its expected economic impact, the government is proposing to increase the maximum subsidy rate to 75 per cent for the period beginning December 20, 2020 and to extend this rate until March 13, 2021, to provide greater certainty to employers.
Motor Coach Canada has recently lobbied for the extension of a minimum of 65% top up for the motor coach and tour sector with respect to the CEWS. This is welcome news.
Canada Emergency Business Account (CEBA) Expansion and Extension:
Initially providing loans of up to $40,000, with up to $10,000 forgivable, the CEBA program will soon be expanded, allowing qualifying businesses to access an additional interest-free $20,000 loan, in situations where there is need. Half of this additional amount, up to $10,000, would be forgivable if the loan is repaid by December 31, 2022. The CEBA program has been extended to small businesses that have not been operating from a commercial banking account, who are now able to apply for the CEBA, provided that they have successfully opened a new commercial account and fully meet the eligibility requirements of the program. Loans are provided through financial institutions, such as banks and credit unions, in cooperation with Export Development Canada. The deadline to apply for a CEBA loan has been extended to March 31, 2021.
Support for Workers in the Live Events and Arts Sectors:
To support the planning and presentation of COVID-19-safe events and the arts — including both live and digital — and to provide work opportunities in these sectors, the government will provide $181.5 million in 2021-22 to the Department of Canadian Heritage and the Canada Council for the Arts to expand their funding programs. This includes a one-year renewal of funding provided in Budget 2019 for the Building Communities through Arts and Heritage program, the Canada Arts Presentation Fund and the Canada Music Fund.
Support for Festivals and Events:
The government understands that certain major live events and festivals will require unique support. The government will work with industry to prevent the closure of unique and irreplaceable flagship events and festivals across Canada, and to ensure the survival of key, globally-recognized assets in this sector.
To read the full Fall Economic Statement, see the link below: