Economic Stimulus Packages for Aboriginal Businesses

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Indigenous Community Support Fund

This fund helps Indigenous communities prevent, prepare and respond to COVID-19.

In response to the COVID-19 pandemic, on March 18, 2020, the Government of Canada announced the COVID-19 Economic Response Plan. This plan includes $305 million for a new, distinctions-based Indigenous Community Support Fund to address immediate needs in First Nations, Inuit and Métis communities. A portion of these funds will be set aside to support to regional, urban and off-reserve Indigenous organizations.

These new funds will provide Indigenous leadership with the flexibility needed to design and implement community-based solutions to prepare for and react to the spread of COVID-19 within their communities. These funds could be used for measures including, but not limited to:

support for Elders and vulnerable community members

measures to address food insecurity

educational and other support for children

mental health assistance and emergency response services

preparedness measures to prevent the spread of COVID-19

 

As shown in the map, the Indigenous Community Support Fund will be distributed as follows:

  • $215 million for First Nations: allocated to each First Nation based on population, remoteness and community well-being
  • $45 million for Inuit, which will flow to each of the four land claims organizations through an allocation determined by the Inuit Tapiriit Kanatami and regional Inuit land claims organizations
  • $30 million for Métis Nation communities, which will flow through each of the Governing Members
  • $15 million for Indigenous organizations and communities providing services to Indigenous peoples in urban centres or off reserve such as Friendship Centres, Métis Settlements General Council of Alberta and Métis in the Northwest Territories

Funds will be allocated regionally as follows:

Alberta

First Nations will receive $26,267,000

Métis will receive $7,500,000

No deadline for communities

https://www.sac-isc.gc.ca/eng/1585189335380/1585189357198

 

Support Programs for Indigenous Businesses

The Government of Canada will provide up to $306.8 million in funding to help small and medium-sized Indigenous businesses, and to support Aboriginal Financial Institutions that offer financing to these businesses.

The funding will allow for short-term, interest-free loans and non-repayable contributions through Aboriginal Financial Institutions, which offer financing and business support services to First Nations, Inuit and Métis businesses. These measures will help an estimated 6,000 Indigenous-owned businesses get through these difficult times.

The Emergency Loan Program (ELP) is designed as an emergency measure to support small business owners in meeting their immediate operating cash flow needs.  These funds are not intended to replace or duplicate government or other bank/lender emergency financing/funds that are available to businesses in Canada.

Maximum assistance is $40,000 comprised of a 75% loan and 25% non-repayable contribution. Loan and contribution are issued together.

Loans are:

  • up to 48 months term;
  • interest free;
  • no payments in first 12 months;
  • loan payments begin in 13th month and are fully amortized over the remainder of the term;
  • principle repayments can be made voluntarily at any time after six months of issuance, without fees or penalties.

Eligible costs for this loan can include:

Indigenous owned businesses negatively impacted by COVID-19 can apply for this funding to support their immediate working capital and operational needs. Eligible expenses could include:

  • non-deferrable operating expenses including, without limitation, payroll, rent, utilities, insurance, property taxes and regularly scheduled debt service; and
  • emergency measures such as health and safety improvements, workplace sanitizing, and procedures to secure the safety of employees and prepare for business opening.

Funds may not be used to fund any payments or expenses such as prepayment /refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.

www.nacca.ca/covid-19

 

Canada Programs for Businesses

Canada Emergency Wage Subsidy (CEWS)

The Canada Emergency Wage Subsidy (CEWS) supports employers that are hardest hit by the pandemic and protect the jobs Canadians depend on.

The subsidy generally covers 75% of an employee’s wages – up to $847 per week – for employers of all sizes and across all sectors who have suffered a drop in gross revenues of at least 15% in March, and 30% in April and May.

The program will be in place for a 12-week period, from March 15 to August 29, 2020.

Applications for the CEWS will be open on April 27.

 

Indigenous Government-Owned Businesses

Currently, in order for Indigenous government-owned corporations to be eligible for the CEWS, they must be taxable. The government is extending eligibility for the CEWS to include Indigenous government-owned corporations that are carrying on a business and are tax-exempt under paragraph 149(1)(d.5) of the Income Tax Act, as well as their wholly-owned subsidiaries that are carrying on a business and are tax-exempt under paragraph 149(1)(d.6) of the Income Tax Act. As well, partnerships where each partner of the partnership is either an Indigenous government or an eligible employer will be eligible entities for purposes of the CEWS. This rule is in addition to the rule for partnerships outlined above. Indigenous governments would include First Nation bands, self-governing Indigenous governments and other comparable Indigenous governing bodies.

This change is retroactive to April 11, 2020, which means that it applies to the first qualifying period starting March 15, 2020 and subsequent qualifying periods.

https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html

 

Temporary 10% Wage Subsidy

The Temporary 10% Wage Subsidy is a three-month measure that will allow eligible employers to reduce the amount of payroll deduction required to be remitted to the Canada Revenue Agency (CRA).

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html

 

Extending the Work-Sharing Program

We are extending the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks for employers affected by COVID-19. This measure will provide income support to employees eligible for Employment Insurance who agree to reduce their normal working hours because of developments beyond the control of their employers.

https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html#h4.04

 

Business Credit Availability Program (BCAP)

We established a Business Credit Availability Program (BCAP) to provide additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).

BDC and EDC are working with private sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation, exports and tourism.

This program includes:

Loan Guarantee for Small and Medium-Sized Enterprises

EDC is working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to SMEs.

Co-Lending Program for Small and Medium-Sized Enterprises

BDC is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements.

Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.

These programs are now available at various financial institutions and credit unions.

https://www.canada.ca/en/department-finance/programs/financial-sector-policy/business-credit-availability-program.html

 

Canada Emergency Business Account (CEBA)

The Canada Emergency Business Account (CEBA) will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.

To qualify, these organizations will need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019.

Business owners can apply for support from the Canada Emergency Business Account through their banks and credit unions.

https://ceba-cuec.ca/

 

Canada Emergency Commercial Rent Assistance (CECRA)

The Canada Emergency Commercial Rent Assistance (CECRA) is for small businesses provides relief for small businesses experiencing financial hardship due to COVID-19. It offers unsecured, forgivable loans to eligible commercial property owners to:

  • reduce the rent owed by their impacted small business tenants
  • meet operating expenses on commercial properties

Property owners must offer a minimum of a 75% rent reduction for the months of April, May and June 2020.

We encourage all eligible commercial property owners to participate in this program.

As part of your application, you must provide rent reduction agreement(s) and landlord and tenant attestations.

https://www.cmhc-schl.gc.ca/en/media-newsroom/notices/2020/canada-emergency-commercial-rent-assistance-cecra-small-businesses

 

Rural businesses and Communities

We are providing $287 million to support rural businesses and communities by providing them with much-needed access to capital through the Community Futures Network.

https://www.ic.gc.ca/eic/site/icgc.nsf/eng/h_07662.html

 

Assisting innovative and early-stage businesses

We are investing $250 million to assist innovative, early-stage companies that are unable to access other COVID-19 business supports through the Industrial Research Assistance Program (IRAP).

IRAP provides advice, connections, and funding to help Canadian small and medium-sized businesses increase their innovation capacity and take ideas to market.

Applications closed on April 29

https://nrc.canada.ca/en/research-development/research-collaboration/nrc-covid-19-programs

 

Young Entrepreneurs

We are providing $20.1 million in support for Futurpreneur Canada to continue supporting young entrepreneurs across Canada who are facing challenges due to COVID-19. The funding will allow Futurpreneur Canada to provide payment relief for its clients for up to 12 months.

https://www.futurpreneur.ca/en/

 

Small and Medium-sized Businesses Unable to Access Other Support Measures

We are providing $675 million to give financing support to small and medium-sized businesses that are unable to access other COVID-19 business supports, through Canada’s Regional Development Agencies.

https://www.ic.gc.ca/eic/site/icgc.nsf/eng/h_07662.html

 

BDC Co-Lending Program

BDC partners with financial institutions to co-lend term loans to businesses for their operational cash flow requirements. Eligible businesses may obtain Differing maximum finance amounts based on business revenues, up to $6.25 million, 80% of which would be provided by BDC, with the remaining 20% provided by the financial institution.

https://www.bdc.ca/en/pages/special-support.aspx

 

EDC Business Credit Availability Program (BCAP) Guarantee

EDC will provide a guarantee to financial institutions, giving businesses access to additional credit for payroll and operational costs. EDC is actively working with partners to make this solution available as quickly as possible. Available for all Canadian companies, including non-exporting businesses that sell domestically.

https://www.edc.ca/en/campaign/coronavirus-covid-19.html

 

BDC Working Capital Loan

Working capital loans of up to $2M with flexible repayment terms such as principal postponements for qualifying businesses and reduced rates on new eligible loans.

https://www.bdc.ca/en/financing/business-loans/working-capital-financing/pages/working-capital-loan.aspx

 

BDC Oil and Gas Sector Financing

BDC will be providing viable Canadian-based oil and gas producers, oilfield service companies and midstream providers with loans of between $15 million and $60 million at commercial rates, repayable within 4 years, for operational cashflow and business continuity purposes.

Sign up to receive more information at http://www.bdc.ca/coronavirus

 

Farm Credit Canada Increased Credit Available for Agriculture, Fisheries and Aquaculture

Additional $5 billion in lending capacity, offering increased flexibility to farmers and food producers who face cash flow issues and to processors who are impacted by lost sales. Farm Credit Canada has also put in place a deferral of principal and interest payments up to 6 months or a deferral of principal

payments up to 12 months for existing loans as well as access to an additional credit line of up to $500,000, secured by general security agreements or universal movable hypothec (Québec only)

https://www.fcc-fac.ca/en/covid-19/program-details.html

 

National AgriRecovery Initiative

To help beef and pork producers faced with additional costs incurred by COVID-19, the national AgriRecovery initiative will provide up to $125 million in funding.

This includes set-asides for cattle and hog management programs to manage the impacts of temporary closure of food processing plants. It will help beef and pork producers and processors adapt to a changing market, and help farmers and ranchers keep their animals longer before marketing.

More details will be available soon.

https://pm.gc.ca/en/news/news-releases/2020/05/05/supporting-canadas-farmers-food-businesses-and-food-supply

 

EDC: Increasing Financial Capacity to Support Canadian Oil and Gas Companies

EDC will increase its financial capacity over 12 months to support Canada’s oil and gas sector. This business support will be provided through EDC’s lending, bonding and accounts receivable insurance products. For those wishing to access support, they are encouraged to reach out to their financial institution.

https://www.edc.ca/en/about-us/newsroom/covid-19-oil-gas-support.html

 

Income Tax Deferrals

The Canada Revenue Agency has deferred all payment of any income tax amounts owing on or after Mar. 18 and before Sept. 2020 until after Aug. 31, 2020. No interest or penalties will accumulate on these amounts during this period. The filing date for the 2019 tax year has also been extended until June 1, 2020.

 

Federal Business Taxes

The Government has extended income tax filing and payment dates for individuals, corporations and trusts for amounts that become owing on or after March 18, 2020 and before September 2020.

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html

 

HST/GST Remittances and Customs Duty Deferrals

The Canada Revenue Agency and Canada Border Services Agency are permitting businesses to defer all HST/GST remittances as well as customs duty owing on their imports until June 30, 2020.

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html

 

Alberta Programs for Businesses

https://www.alberta.ca/covid-19-financial-support-for-businesses-and-organizations.aspx

 

Tax Changes

Alberta corporate income tax balances and instalment payments coming due between March 18, 2020 and August 31, 2020 are deferred until August 31, 2020 to increase employers’ access to cash so they can pay employees, address debts and continue operations.

Due dates for filing corporate income tax returns due after March 18, 2020 and before June 1, 2020 have been extended to June 1, 2020.

 

Education Property Tax Deferral

Education property tax rates will be frozen at last year’s level – reversing the 3.4% population and inflation increase added in Budget 2020.

Collection of non-residential education property tax for businesses will be deferred for 6 months, or both municipal and education property tax are deferred for a shorter time that is of equivalent benefit.

 

WCB Premium Payment Deferral

Small, medium and large private sector employers can defer WCB premium payments until 2021.

For small and medium businesses, the government will cover 50% of the 2020 premium when it is due in 2021 – saving businesses $350 million. Large employers will have their 2020 WCB premium payments deferred until 2021, at which time their premiums will be due. Employers who have already paid WCB premiums in 2020 are eligible for a rebate or credit.

 

Utility Payment Deferral

Residential, farm and small commercial customers can defer electricity and natural gas bill payments until June 18, 2020 to ensure no one will be cut off, regardless of the service provider.

This program is available to Albertans who are experiencing financial hardship as a direct result of COVID-19, such as those who have lost their employment or had to leave work to take care of an ill family member.

Call your utility provider directly to arrange for deferral on all payments until June 18, 2020.

 

Tourism Levy Deferral

Hotels and other lodging providers can delay paying the tourism levy until August 31 for amounts that become due to government on or after March 27, 2020. Payments deferred until August 31 will not be subject to penalties or interest.

Hotels and other lodging providers are still expected to file returns, as required by legislation, and must collect the tourism levy from guests staying at their properties during this period.