Vancouver Sun

Small-biz loans re­ceive top up of 50 per cent


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 in­clud­ing tourism and hos­pi­tal­ity.

The Cana­dian Emer­gency Busi­ness Ac­count has al­ready pro­vided loans of up to $40,000 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.

On Mon­day, the govern­ment 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 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.

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 feds are also propos­ing up to $3 mil­lion for the Cana­dian North­ern Eco­nomic De­vel­op­ment Agency that would go to­ward “foundation­al” eco­nomic de­vel­op­ment projects to sup­port small busi­nesses in Canada's ter­ri­to­ries.

Alla Drigola, direc­tor of par­lia­men­tary af­fairs and small busi­ness pol­icy at the Cana­dian Cham­ber of Com­merce, said she was pleased to see the Cana­dian Emer­gency Busi­ness Ac­count loan pro­gram ex­tended and ex­panded along­side other re­gional sup­ports.

“The CEBA loan pro­gram has been one of the govern­ment's most suc­cess­ful sup­port pro­grams for small busi­nesses,” she said, adding that the funds and liq­uid­ity tar­geted at spe­cific re­gions and hard-hit sec­tors in­clud­ing tourism and hos­pi­tal­ity “will go a long way to­wards help­ing these busi­nesses weather the storm.”

Dan Kelly, pres­i­dent of the Cana­dian Fed­er­a­tion of In­de­pen­dent Busi­ness, also wel­comed the top-ups and ex­ten­sions for “key COVID-19 sup­port pro­grams for small busi­ness” that “will pro­vide a greater abil­ity to plan for the very un­cer­tain next few months.”

How­ever, he said his as­so­ci­a­tion is dis­ap­pointed the fed­eral govern­ment did not in­clude fixes for new busi­nesses and self-em­ployed Cana­di­ans, “who re­main in­el­i­gi­ble for nearly all of the key sup­port pro­grams.”

What's more, the CFIB is ask­ing the govern­ment to de­lay an up­com­ing Canada Pen­sion Plan pre­mium in­crease as small busi­nesses “are in no po­si­tion to take on new costs at the start of 2021,” Kelly said.

On a smaller scale, the eco­nomic up­date rec­og­nized that many Cana­di­ans are work­ing from home dur­ing the pan­demic, and the govern­ment has pledged to make it eas­ier to claim home-of­fice de­duc­tions. Work­ers are “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.

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.”

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