The federal government announced plans Monday to expand and improve rent subsidies and to extend to the wage subsidy.
In a press release, the government said the measures were being designed to help businesses get through the second wave of the virus to protect jobs, serve their communities and be positioned for a strong recovery.
The first change announced Monday was a new Canada Emergency Rent Subsidy, tweaked to respond to concerns expressed by business groups and politicians about the effectiveness of the previous system.
Under the new subsidy, direct and easy-to-access rent and mortgage interest support would be provided to tenants and property owners until next June for qualifying organizations affected by COVID-19. The new relief package provides direct support to businesses, instead of going through landlords. A complaint of the previous rent subsidy program is that it was dependent on landlords, who could decline to participate.
The rent subsidy would support businesses, charities and non-profits that have suffered a revenue drop by providing support of up to a maximum of 65 per cent of eligible expenses. The 65 per cent mark is in place until Dec. 19 of this year.
Claims will be allowed retroactively for the period beginning Sept. 27 and ending Oct. 24.
A new Lockdown Support would provide an additional 25 per cent through the emergency rent subsidy for organizations subject to a lockdown to shut their doors or “significantly limit their activities” under a public health order issued by a government body, whether that be Canada, a province or territory or a municipal or regional health authority under provincial or national laws.
Combined with the rent subsidy, businesses subject to a lockdown could receive rent support of up to 90 per cent. Eligibly fixed property expenses include rent and interest on commercial mortgages.
The government also announced on Monday that the Canada Emergency Wage Subsidy will be extended until next June, helping employers keep employees on the payroll and re-hire their workers.
The current rate of up to 65 per cent of eligible wages would remain in place until Dec. 19.
In a press release, the Canadian Federation of Independent Business praised the changes to the program.
They said a majority (63 per cent) of small business owners believe the newly-updated relief programs offer a lifeline for the survival of their business. They called on all political parties to quickly review, revise and pass the legislation.
Dan Kelly, CFIB president, said that it’s “good news” that the wage subsidy will be extended and that plans to reduce the generosity of the subsidy this fall have been paused
He said the subsidy’s formula will be based on 80 per cent of a firm’s revenue loss. those with losses of over 50 per cent can qualify for a 25 per cent top-up.
“While CFIB welcomes this significant support, we further suggest the government consider an additional top-up for businesses that are facing new or ongoing closures/restrictions, especially due to the second wave of COVID-19. In addition, ensuring new, seasonal, or micro-sized businesses can access this subsidy will be critical over the fall,” Kelly said.
“ In addition, ensuring new, seasonal, or micro-sized businesses can access this subsidy and that business owners can use the program to cover some of their previous dividend income will be critical over the fall.”
CFIB executive vice-president Laura Jones said the CFIB is “pleased” Their three main recommendations about the rent program have been taken into consideration, including ensuring that it’s independent of landlord participation.
“Rent relief is critical to the survival of many Canadian small businesses, especially with some provinces entering a second lockdown and requiring businesses to close again,” Jones said.
“ CFIB further calls on the government to create a retroactive pathway for businesses that were eligible under the previous CECRA program but could not access critical rent relief because their landlord chose not to participate. Business owners, especially those who have not accessed any rent relief, have been waiting a long time for an improved rent relief program and are eager for the program applications to be made available. Since the first of October and November have already passed, we urge the government to work swiftly to launch the program as soon as possible.”
CFIB said they will review the new legislation closely to ensure all firms subject to ongoing restrictions will qualify for the rent subsidy.
CFIB is also calling for more news as to when businesses will be able to apply for promised Canada Emergency Business Account expansions.