THUNDER BAY – At a press conference Friday to announce new financial supports for individuals and businesses amid the COVID-19 crisis, Prime Minister Justin Trudeau began with a message for small business owners and entrepreneurs.
“I know that for many of you, the last few weeks have been heartbreaking,” Trudeau said, acknowledging that many have had to make difficult decisions to lay off staff and now face concerns over the future of businesses that may have taken years to build.
“The most important thing we can do to help people and the economy in this crisis is for the government to take strong fiscal action,” Trudeau continued.
After facing criticism from many business groups for not taking strong enough action, Trudeau’s announcements Friday represent a significant escalation of the federal government’s response.
Chief among the new measures is an increase in wage subsidies for small- and medium-sized businesses to 75 per cent. That’s a large jump from the 10 per cent subsidy Trudeau announced last week.
The support will be available to “qualifying businesses” who have been affected by the COVID-19 pandemic, such as those whose employees now have to work from home, and will be back-dated to March 15. However, the criteria to qualify for the subsidy, whether there will be a cap on the measure, and other details remain unknown. Trudeau said Friday more details would be made available on Monday.
In other measures, a new Canada Emergency Business Account will make $40,000 government-backed loans available to qualifying businesses. The loans will be interest-free in the first year, and, if businesses meet certain conditions, $10,000 will be forgivable.
Trudeau also announced the government would be deferring GST and HST payments, as well as taxes and duties on imports for small businesses, until June. The Prime Minister said the move is equivalent to $30 billion in interest-free loans.
Lastly, the government will make $12.5 billion available for loans through Export Development Canada and the Business Development Bank. That’s on top of a previously-announced $10 billion.
Trudeau said the government hopes the moves will rein in the wave of layoffs in Canada. The Prime Minister has said more than half a million Canadians applied for employment insurance support just last week, compared to 27,000 for the same week last year.
“With these new measures, our hope is that employers who are being pushed toward laying off people because of COVID-19 will think again,” Trudeau said. “And for those of you who’ve already had to lay off workers, we hope you will consider re-hiring them given this payroll support.”
