Canadian Prime Minister Justin Trudeau recently announced a series of new measures increasing support for businesses and workers across Canada. A key highlight from the announcement is the increase of the wage subsidy from 10 percent to 75 percent as recommended by the business community and the RV Dealers Association of Canada over the past couple of weeks.
The supports announced are tools to help businesses cope with the current crisis, stay open and keep their employees on the payroll.
The current $15 million eligibility threshold in taxable capital employed in Canada, which includes inventory, makes it nearly impossible for many RV dealerships in Canada to access the wage subsidy program. RVDA of Canada is advocating for the federal government to either eliminate the threshold or remove RV inventory the definition of taxable capital from any calculations for financial support to businesses during this crisis.
The government is finalizing the details around the measures announced.
Increase from 10 percent to 75 percent wage subsidy for small and medium-sized businesses, for up to three months, retroactive to March 15. The eligibility criteria will be released next week.
GST and HST remittances deferred to June, as well as customs duties owed for imports. This measure will ease businesses cash flow challenges during this crisis and applies to:
- Monthly filers for amounts collected in February, March and April
- Quarterly filers for amounts collected between January 1 and March 31
- Annual filers, whose GST/HST return or instalment are due in March, April or May
- Launch of new Canada Emergency Business Account, which will provide up to $40,000 interest-free loans guaranteed for 1 year. To qualify, businesses will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. The government is offering a loan forgiveness program of 25 percent if the balance on the loan is repaid before Dec. 31, 2022
- Bank of Canada cut the overnight rate to 0.25 percent to increase credit availability and further stimulate the economy.
Launch of the new Small and Medium-sized Enterprise Loan and Guarantee program that will enable up to $40 billion in lending, supported through Export Development Canada (EDC) and Business Development Bank of Canada (BDC).
- EDC will guarantee new operating credit and cash flow term loans that financial institutions extend to small and medium-sized businesses, up to $6.25 million. Export sectors and domestic businesses would be eligible.
- BDC and financial institutions will co-lend amounts up to $6.5 million to small and medium-sized businesses.