COVID-19 Update pertaining to our business owner operator LMIA clients
At the beginning of the COVID-19 outbreak in Canada and the start of several business slowdowns in Canada and Alberta, it became aware that the Government of Canada would be expected to step in to support Canadians and Permanent Residents in these unprecedented circumstances. The government was quick to immediately offer emergency support for unemployed individuals or individuals who are not working because of their choice and sometimes requirements to self-isolate or “stay home.” The government has offered support by waiving many of the Employment Insurance conditions that would have rendered many individuals ineligible and offered a bulk emergency benefit for certain self-employed individuals to start. Talks of mortgage payment deferrals and utilities deferrals have also been well-received and are coming into action.
However, businesses, especially small businesses and medium sized businesses, are the backbone of the Canadian economy. By being shut down and not having the personnel to staff the businesses, business owners have been some of the worst affected subjects from the COVID-19 outbreak. To respond to the concerns of business owners, the Government initially announced a 10% return (essentially) remitting 10% less payroll and income tax to the Canada Revenue Agency each pay period and a deferral on the corporate tax filing date to keep more cash in the business account. As COVID-19 rapidly became more crippling to the economy, Canadian business owners swiftly announced that this would not suffice and demanded more.
In the coming days, the Government of Canada will announce the details for two new policies that are well-designed to help businesses weather the storm until the COVID-19 threat has passed. As many of our LMIA Owner-Operator clients have immigrated to Canada by starting, moving, or purchasing a business in Canada, this announcement and update is welcome news to both Canada Immigration and Visa Services as well as our business immigration clients.
So what exactly do these support systems look like for business and how will the Government of Canada help businesses and business owners to cope with the economic slowdown due to COVID-19?
75% Wage Subsidy backdated to March 15th
The government announced that there will be a 75% wage subsidy to business owners and employers backdated to March 15th . This is significantly more impressive than the previously announced 10% CRA remittance deferral. This was announced the end of the week of March 22nd. The objectives of this policy are to help businesses keep and return workers to the payroll.
This is welcome news to business owners as it can effectively reduce payroll burden by 75% which tends to be the highest cost for many businesses, especially our job creating, business Owner-Operator LMIA clients. The only details we are aware of so far in this policy is that eligible businesses must have suffered at least a 30% loss in revenue from COVID-19.
Interest-Free Loans of up to $40,000
The Government of Canada 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.
The only qualification made clear is that between $50,000 and $1,000,000 must be the payroll of the company in 2019.
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.
The lending and loan programs are combined into the Business Credit Availability Program. There is more detailed information and Q and A’s here: https://www.canada.ca/en/department-finance/programs/financial-sector-policy/business-credit-availability-program.html
The Business Credit Availability Program is expected to roll out in the three weeks after March 27 and interested businesses are advised to contact their financial institutions at this point to move this forward.
There are several other benefits the government announced to businesses as well including GST deferrals, specific support for farmers, and extension of the work-sharing program For full details and the current status of support to Canadian businesses during this time, please visit this link: https://www.canada.ca/en/department-finance/economic-response-plan/covid19-businesses.html#wage_subsidies
More details will be announced by the end of this week from the Government of Canada and CIVS will be sure to update via our news and blog.
CIVS Canada Immigration and Visa Services are proudly partnered with Canoscope Immigration and Education. Together, we work as a team offering professional immigration services through our executive team with Offices in Vancouver-Surrey, BC, Calgary, Alberta, and New Delhi, India. The CIVS Canoscope team is led by:
Sean G McKinsley, Managing Partner, CIVS
Nikola Misina, Partner, CIVS
Steven J Paolasini, Vice President, CIVS
Robin Kapoor, Managing Director, Canoscope
Micky Singh, Executive Director for Marketing, Canoscope