[ co-author: Ryan Moore - Student at Law]

Please note that since this blog was published, the Canadian Government has announced further details about the Canada Emergency Commercial Rent Assistance program. More information can be found on our blog, Canada Emergency Commercial Rent Assistance Announced for Qualifying Commercial Property Owners and Small Business Tenants.

As described in our previous blog posts, COVID-19 Pandemic-Related Economic Stimulus for Canadian Businesses published on April 8 and an update post published on April 16, the Canadian federal government and most provincial and territorial governments have introduced programs designed to provide funding or economic relief to Canadian businesses in connection with the COVID-19 pandemic.

Since our most recent publication, an update to the Canada Emergency Business Account has been released and four new programs have been announced. A summary table with all COVID-19 pandemic-related Canadian business funding announced to date is included at the end of this blog.

Please note that this blog does not address tax deferrals or employment subsidies. For more information on these programs and any other COVID-19-related queries, please contact the authors of this blog or visit our COVID-19 Resource Centre.

Changes to Previously Implemented Programs

Canada Emergency Business Account

The Canada Emergency Business Account program recently amended the eligibility requirements with respect to payroll expenses for businesses and not-for-profits. With the amendment, the criteria for total eligible 2019 salary expense of employers was expanded to a range of $20,000 to $1.5 million, from the previous range of $50,000 to $1 million. The remaining eligibility and program information, below, is otherwise unchanged.

The program provides interest-free revolving lines of credit of up to $40,000 to small businesses and not-for-profits. This program is designed to aid in covering operating costs for businesses with revenues that have been temporarily reduced as a result of the impact of COVID-19 and will be implemented through participating financial institutions.

On December 31, 2020, the line of credit converts into a five-year term loan. The term loan is interest-free with no minimum monthly principal payments until December 31, 2022. On January 1, 2023, the interest rate on the balance of the term loan changes to 5 percent per annum. If 75 percent of the balance of the term loan as at January 1, 2021, is paid off by December 31, 2022, the remainder of the term loan will be forgiven up to $10,000.

Applicants must have an active business account that was opened before March 1, 2020, with a participating financial institution. Applications remain open.

New Federal Funding

Northern Business Relief Fund

The Canadian Northern Economic Development Agency will provide $15 million in short-term support through the Northern Business Relief Fund to small- and medium-sized territorial businesses experiencing economic impacts from COVID-19. The program will provide grants of between $2,500 and $100,000 to businesses operating in Nunavut, Northwest Territories or Yukon. The program will consider businesses with up to 50 employees, but priority will be given to businesses with fewer than 20 employees. Only certain fixed costs are eligible for coverage—including rent or mortgage, utilities, subscriptions, insurance, and others, for a maximum period of four months, retroactive to April 1, 2030—provided that the costs are not already covered by another government program.

Eligible businesses must also: (i) have operations with a direct impact on the northern economy; (ii) have been in operation since October 1, 2019; (iii) have been solvent and financially viable prior to any COVID-19 economic disruptions; and (iv) be operating, and expect to continue to operate at a loss over the coming months. Further information on applications and eligibility is available on the Government of Canada's website.

National Research Council Canada Innovation Assistance Program

The Government of Canada has announced that applications are open for the Innovation Assistance Program (IAP), a $250-million fund that will provide a wage subsidy to eligible employers for up to 12 weeks. Only companies that are ineligible for the Canada Emergency Wage Subsidy Program can receive IAP funding.

To be eligible, companies must also: (i) be a profit-oriented business in Canada, incorporated no later than March 1, 2020; (ii) have 500 or fewer full-time equivalent employees; (iii) plan to pursue growth and profit through commercializing technology-driven products or services in Canada; (iv) lack sufficient financial resources to sustain operations during the COVID-19 downturn period; and (v) have a Canada Revenue Agency Number.

Applications close on April 29, 2020, at 11:59 p.m. EDT. Successful applicants will begin receiving payments as early as May 11, 2020.

Upcoming Federal Funding

Programs in this section have been announced without precise details on eligibility, funding amounts, or application. We will update these programs in upcoming blog posts when such details are made available.

Canada Emergency Commercial Rent Assistance

On April 16, 2020, Prime Minister Trudeau announced a new program that will provide loans—both repayable and forgivable—to commercial property owners who must in turn lower or waive the rent payable by small business tenants. Although the program will use federal funds from the Government of Canada's COVID-19 Economic Response Plan, it will be implemented through coordination between the federal government and the provincial and territorial governments. The loans will be applicable to April (retroactively), May, and June 2020.

Further details on the Canada Emergency Commercial Rent Assistance program are expected to be released soon, though a precise timeline has not been provided.

Regional Relief and Recovery Fund

The Government of Canada has created the Regional Relief and Recovery Fund (RRRF) with close to $1 billion for businesses to help mitigate pandemic-related financial pressures and support projects for recovery, with $675 million to support regional economies, businesses, organizations and communities in regions all across Canada, and $287 million to support the national network of Community Futures Development Corporations, targeting small businesses and rural communities across Canada.

The RRRF will be administered through six regional development agencies (RDAs):

1. Western Economic Diversification Canada
2. Federal Economic Development Initiative for Northern Ontario
3. Federal Economic Development Agency for Southern Ontario
4. Canadian Economic Development for Quebec Regions
5. Atlantic Canada Opportunities Agency
6. Canadian Northern Economic Development Agency

Eligibility criteria and details concerning funding and applications have not yet been released. It is expected that the federal government or the RDAs will make this information available shortly, though a precise timeline has not been provided.

Small- and medium-sized business that have already received RDA funding may be eligible for certain payment deferrals and further funding on a case-by-case basis. These businesses should contact their local RDA for more information.

We will continue to provide updates as further programs are made available and additional details are released. If your business or organization has questions in respect of COVID-19 funding-related matters, please contact the authors of this blog. In addition, please visit our COVID-19 Resource Centre for other COVID-19 related resources.

Summary Table

*Unless otherwise indicated, provincial and territorial programs are only available to businesses located in and operating in the applicable province or territory.