32.6 C
Prince Albert
Sunday, July 21, 2024
Home News Feds eliminate minimum payroll requirements to access Canada Emergency Business Account

Feds eliminate minimum payroll requirements to access Canada Emergency Business Account

Feds eliminate minimum payroll requirements to access Canada Emergency Business Account
Herald file photo.

Businesses with no payroll can now qualify for a Canada Emergency Business Account (CEBA) loan after the federal government expanded the eligibility criteria on Monday.

The decision affects business owners who are self-employed or sole proprietors, family businesses who pay employees through dividends, and owners who only employ contractors. Prime Minister Justin Trudeau said more application details would come at a later date, including more help for business owners who operate through a personal bank account instead of a business account, and for new businesses who have yet to file a tax return.

“Businesses … are the backbone of our economy and the lifeblood of our communities,” Trudeau said during Monday’s announcement. “Whether it’s with the CEBA or the expanded wage subsidy, we’re in your corner.”

Small business owners and industry advocates protested the previous $50,000 minimum payroll eligibility requirement when it was first announced on April 9. They said it excluded family owned businesses or sole proprietors who were self-employed.

Mary NG, the minister for small business, exports, promotion and trade, said the government heard those complaints loud and clear.

“Throughout this crisis, we’ve listened to what small businesses have told us about what works, what doesn’t, and what needs to be improved upon,” Ng tweeted on Tuesday. “That’s what today’s announcement to expand the Canada Emergency Business Account eligibility was about. Our work continues.”

Business groups like the Canadian Federation of Independent Business welcomed the decision, but says the government needs to move quickly to make up for lost time.

CFIB president Dan Kelly said he was “very pleased” with Trudeau’s announcement, but added that most small business owners have gone two months without income. They’ll need help quickly with another looming rent deadline on June 1.

“The initial $40,000 may not be enough for many businesses who continue to be shut down, or those facing a long recovery period,” Kelly wrote in a statement.

The Prince Albert Chamber of Commerce also welcomed the news. CEO Elise Hildebrandt said it would make it easier for small businesses to access much needed supports.

“You always want a few more changes, because I know of a couple of companies it still doesn’t include, but I’m thankful that the money became available and they changed those guidelines to help more of our businesses,” she explained.

This is the second time the federal government has altered the CEBA application guidelines. They reduced the minimum payroll requirements from $50,000 to $20,000 on April 16.

The CFIB says 50 per cent of Canadian small business owners would not be able to reopen if COVID-19 restrictions remain in place past May. Roughly 80 per cent of Canadian small businesses have completely or partially shut down since the start of the COVID-19 pandemic, according to a CFIB survey.

The CEBA allows small businesses to apply for forgivable loans of up to $40,000, 25 per cent of which is forgivable if repaid by Dec. 31, 2022. More than 600,000 loans have been approved since it first launched in April.