Extensions, expansion of assistance to employers

May 11, 2020

Prime Minister Trudeau has announced extensions, expansions and establishment of programs intended to ease the financial burden of companies effected by COVID-19 and to provide support during the process of the reopening of the economy.

  • The Canadian Emergency Wage Subsidy (CEWS) program will be extended through June 2020.
  • The Business Credit Availability Program (BCAP) will be expanded to help provide support for mid-market businesses.
  • The Large Employer Emergency Financing Facility (LEEFF) is being established to provide bridge financing to Canada’s largest employers.
  • The Industry Strategic Council is being created to advise the government on the specific needs of sectors impacted by COVID-19.

I have provided summaries of the programs below.

Extension of CEWS program

The CEWS program was passed into law on April 11 to assist companies whose revenues have declined due to the impact of COVID-19.

There are currently three claiming periods, with the third claiming period originally intended to be the final period, ending on June 6.

The exact dates and periods of the extension have not yet been detailed, I will keep you informed of any announcements.

As a reminder, if you have already applied for the CEWS in one period, it is also necessary to reapply for the subsidy for each period.

CEWS Summary

  • Available to all Canadian businesses, not-for-profits and charities, that are not publicly funded, facing a revenue decline of at least 15% in March, and 30% in April and May because of COVID-19
  • Wage subsidy of 75% available on a maximum salary of $58,700 ($847 per week)
  • Eligible employer must demonstrate that its monthly gross revenues for the particular month have decreased by 30% or more (15% in March), as compared to its gross revenues for the same month in 2019
  • Gross revenue means the employer’s gross revenue from its business carried on in Canada earned from arm’s-length sources
  • Revenue is calculated using the employer’s normal accounting method, and excludes revenues from extraordinary items and amounts on account of capital
  • Employers will need to attest that they are doing their part to contribute the additional 25% of wages
  • Employers found to violate the terms of the program will face severe penalties

»» Link to Government of Canada CEWS information

Current claiming periods: 

Claiming periodReference period for eligibility
Period 1March 15 – April 11March 2020 over March 2019
Period 2April 12 – May 9April 2020 over April 2019
Period 3May 10 – June 6May 2020 over May 2019
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Expansion of Business Credit Availability Program (BCAP)

The BCAP is being expanded to better support mid-market businesses with the availability of loans of up to $60 million per company, and guarantees of up to $80 million.

Through the BCAP, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will work with private sector lenders to support access to capital for Canadian businesses in all sectors and regions. It will continue to provide financing to businesses through Farm Credit Canada, the BDC, and EDC, including through the Canada Account.

Also continuing is the Canada Emergency Business Account (CEBA) to support businesses that paid between $20,000 and $1.5 million in total payroll in 2019.

»» Information about the BCAP expansion is included in the Prime Minister’s announcement of the LEEFF.

»» More information about the CEBA can be found on the Government of Canada COVID-19 Economic Response Plan webpage

Large Employer Emergency Financing Facility (LEEFF)

The role of the LEEFF is to provide bridge financing to Canada’s largest employers, whose needs during the pandemic are not being met through conventional financing, in order to keep their operations going. 

The objective of this support is to help protect Canadian jobs, help Canadian businesses weather the current economic downturn, and avoid bankruptcies of otherwise viable firms where possible. 

The additional liquidity provided through LEEFF will allow Canada’s largest businesses and their suppliers to remain active during this difficult time, and position them for a rapid economic recovery.

The Prime Minister stressed that “the support will not be used to resolve insolvencies or restructure firms, nor will it provide financing to companies that otherwise have the capacity to manage through the crisis.”

»» Link to announcement of LEEFF Program

Industry Strategic Council

The Council will help the government understand the impact on industries and specific sectoral pressures that COVID-19 has caused. The Department of Innovation, Science, and Economic Development indicated that over the next 90 days, the Council will meet regularly to identify and understand sectoral pressures that are common across the industries. Members of the Council will be announced soon and will complement the structure and focus of the Economic Strategy Tables. Advanced ManufacturingClean TechnologyTourismDigital IndustriesHealth/Bio-sciencesResources of the FutureThe Industry Strategy Council creates a venue for the government to consult directly across industries.

More details will be available shortly.