Prime Minister Justin Trudeau announced on Friday that the federal government was going to be offering an increase in wage subsidies as well as new loan opportunities for small businesses across the country.
In his daily national address made from Rideau Cottage in Ottawa, Trudeau unveiled the government was going to be increasing a payroll subsidy in an effort to thwart layoffs due to COVID-19. The feds will now cover up to 75 percent of salaries, a big increase over the original 10 percent subsidy plan.
“This means that people will continue to be paid even though their employer has had to slow down or stop its operations because of COVID-19,” said Trudeau at the press conference. “We’re helping companies keep people on the payroll so that workers are supported and that the economy is able to recover from this. That is our priority.”
The Prime Minister added that the wage subsidy will be back-dated to Sunday March 15.
Trudeau also addressed the need for cash flow for small and medium-sized businesses. In an effort to help those operations bridge the gap during the COVID-19 economic struggle, the federal government is introducing the Canada Emergency Business Account (CEBA). The new measure will offer qualifying businesses:
- $40,000 loan from banks, which will be guaranteed
- The loan will be interest-free for the first year
- Under certain conditions, $10,000 of it will be forgivable
Trudeau also added that the government will be providing an additional $12.5 billion through Export Development Canada to help small and medium-sized businesses with operational cash flow.
Lastly, GST and HST payments, along with duties and taxes owed on imports, will be deferred until June. According to Trudeau, this is the equivalent of $30 billion in interest-free loans back to businesses.
“If you are struggling to get by right now and you have a payment due at the end of the quarter, we’re going to give you more time. It will also allow you to keep the money that would have been sent to the government and use it instead for your immediate needs,” said Trudeau.
The Prime Minister’s hope that the additional monetary support going towards small businesses will help keep workers across Canada employed.
“With these new measures, our hope is that employers being pushed to laying off people due to COVID-19 will think again…and for those of you who have already had to lay off workers, we hope you will re-hire them.”
For employees who have been laid off already, Trudeau emphasized that the Canada Emergency Response Benefit, which was announced on Wednesday, is still applicable.
When asked by the media how Trudeau’s Liberals intend to pay for the monetary relief, the Prime Minister claimed that the government’s economic foundations were strong before the pandemic and that he is confident the economy will bounce back after COVID-19 passes.
More details on how businesses can apply for loans and access the wage subsidy are expected to be revealed on Monday.
With the unprecedented times unfolding around our country, the Prime Minister pointed to small and medium-sized businesses as the key to helping the economy recover.
“Small and medium-sized businesses are the backbone of our economy. You are collective the largest employer in the country, you support millions of families, you serve our communities and you make our towns and cities better places to live. Canadians are counting on you and I am counting on you to come back strong from this, no matter what comes next. You are going to get the support you need to help rebuild a more resilient and prosperous economy. So to businesses across the country, please keep your workers on the payroll or think of hiring them back.”
The new wage subsidies and loans are the latest in a series of economic relief systems that have been offered by the federal government in an effort to help Canadians stay afloat during the COVID-19 pandemic.