COVID-19: Ontario Businesses Reopening and New Loans for Larger Employers
Businesses of all sizes have been hit hard by the COVID-19 pandemic and the subsequent shutdown of most economic activity.
However, in Ontario, a number of businesses were allowed to reopen this week. Such businesses included some retail stores, recreation and sport facilities, and professional workplaces.
These reopenings are part of Ontario Premier Doug Ford’s plan to jumpstart the economy, which has largely been in lockdown since he declared a state of emergency in mid-March.
However, many businesses and their employees continue to struggle. Below is a list of updated resources for employers and employees in Canada.
Aid for Small Businesses
As we had previously discussed, some employees may be eligible for the Federal Canadian Emergency Response Benefit (“CERB”), which provides workers with temporary income support if they have stopped working because of COVID-19. Canadians can apply for CERB if, for at least 14 days in a row during the 4-week payment period, they do not expect to receive more than $1,000 (before taxes) from employment and self-employment income. Beneficiaries will receive $500 a week for up to 16 weeks.
Additionally, the Federal Government created a wage subsidy program that allows Canadian employers whose business has been affected by COVID-19, to apply for a subsidy of 75% of employee wages for up to 12 weeks, retroactive from March 15, 2020 to June 6, 2020. It provides up to $847 a week per employee. The wage subsidy is intended to enable eligible businesses to re-hire workers previously laid off as a result of COVID-19, to help prevent further job losses and to resume normal operations following the crisis.
Finally, the Canada Emergency Commercial Rent Assistance (“CECRA”) was announced by the Federal Government for small businesses, which will provide relief for small businesses experiencing financial hardship due to COVID-19. CECRA offers forgivable loans to eligible commercial property owners so that they can reduce the rent owed by their commercial tenants by at least 75% for the months of April, May and June, 2020.
New Aid for Larger Employers
While many programs have been announced for smaller businesses, larger businesses and their employees have also received some good news.
This week, the Federal Government announced a new aid program aimed at larger businesses, called the Large Employer Emergency Financing Facility (“LEEFF”), which will provide short-term liquidity assistance in the form of interest-bearing term loans for large Canadian employers who have been affected by the COVID-19 pandemic. The loans are intended to help large Canadian employers preserve their employment, operations and investment activities until they can access more traditional market financing.
Large for-profit enterprises in all sectors, except for those in the financial sector, as well as certain not-for-profit enterprises can apply for funding under LEEFF.
Loans of $60 million and above will be awarded on a case-by-case basis.
To be eligible, employers must have significant operations in Canada or support a significant workforce in Canada and have to demonstrate approximately $300 million or more in annual revenues.
Applicants must commit to minimizing the loss of employment and sustaining their domestic business activities, and must demonstrate that funding under LEEFF forms part of their overall plan to return to financial stability.
Applicants must submit their request to LEEFF-CUGE@cdev.gc.ca.
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