Ottawa also expands eligibility criteria for the $40,000 loan program
The federal government is launching a new program to help small business pay their rent as COVID-19 decimates the economy.
Prime Minister Justin Trudeau said the Canada Emergency Commercial Rent Assistance Program will “provide support to small businesses with their rent for the months of April, May and June.”
Ottawa will work with the provinces and territories to roll out the plan, because rental relationships are not regulated federally, and details will be coming soon, he said.
Canada Emergency Business Account
Trudeau also announced some tweaks to the loan program for small businesses struggling with cash flow.
“When we hear a program is not reaching as many people as it should, we make changes,” he said.
As a result, the Canada Emergency Business Account (CEBA) is being tweaked to allow more companies to access loans. It provides $40,000 loans — with up to $10,000 not having to be repaid in some circumstances — to employers.
The loans are interest-free until Dec. 31, 2022, and up to 25 per cent of the total will be forgiven.
“This is money entrepreneurs and employers can use to cover operational costs and help with other immediate needs,” Trudeau said.
The changes will expand the program to businesses with total payrolls in 2019 of between $20,000 and $1.5 million, he said. Previously, the range was $50,000 to $1 million.
To date, more than 195,000 loans have been approved under the CEBA, said Trudeau, amounting to more than $7.5 billion in credit to small- and medium-sized business.
The Canada-U.S. border
Trudeau was pressed about comments made by U.S. President Donald Trump that the border restrictions between Canada and the United States could be relaxed.
While there is careful co-ordination between the two nations, and the relationship is unique, Trudeau expects a “significant” amount of time to pass before there can be talk about loosening such restrictions.