The federal government is boosting the size of its interest-free loan program for small businesses by 50 per cent to help them weather the pandemic, with half of the top-up forgivable if the loan is repaid by the end of 2022.
The new loans were announced in Monday’s economic update and are on top of other sector-specific aid for the hardest hit industries.
The Canadian Emergency Business Account has provided $40,000 loans to more than 790,000 non-profits and small businesses ranging from dental practices to delicatessens. The $20,000 top-up of loans, provided through financial institutions and Export Development Canada, will be rolled out in December and can be applied for through March 31.
“Small businesses have been hit hard and have worked hard to stay afloat — through the first wave and now second wave,” the government said in its 237-page economic update Monday.
“These enhancements demonstrate the government’s commitment to stand by small businesses to ensure they can continue to support families and communities across the country.”
Up to $10,000 of each tranche of the loan is forgivable if the loan is repaid by the end of 2022.
Small businesses have been particularly hard hit by government-mandated restrictions to help control the spread of the virus that causes COVID-19.
The government also announced regionally targeted support for businesses and additional funding for innovative businesses to ensure that “intellectual property rich firms have the support they need to face the challenges presented by COVID-19.”
To that end, the Liberal government also proposed adding $250 million over five years, beginning next year, to the Strategic Innovation Fund, which supports “large-scale transformative” projects.
The added funds “will help Canada’s most innovative firms and industries weather the pandemic and grow into world leaders that will help drive growth and create jobs in the Canadian economy,” the government said Monday.
These enhancements demonstrate the government’s commitment to stand by small businesses to ensure they can continue to support families and communities across the country
Meanwhile, a top-up of up to $500 million is earmarked for the Regional Development Agencies and the Community Futures Network of Canada, bringing total funding to more than $2 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.
On a much smaller scale, the economic update recognized that many Canadians are working from home during the pandemic, and pledged to make it easier to claim home-office deductions.
Workers “are turning their bedrooms, basements and kitchens into offices, and taking on increased household expenses to do their jobs,” the document said, adding that many may not be familiar with rules to make such claims or want to take on the administrative burden.
To simplify the process for both taxpayers and businesses, the Canada Revenue agency will allow employees working from home due to the pandemic to claim up to $400, based on the amount of time working from home, without the need to track detailed expenses.
The government added that it will “generally not request that people provide a signed form from their employers.”
Financial Post
• Email: [email protected] | Twitter: BatPost
Copyright Postmedia Network Inc., 2020
