The Federal Government announced two major measures on Friday to provide additional financial support for small and medium sized businesses and the people who work for them:
- Prime Minister Justin Trudeau announced that retroactive to March 15th, Ottawa will now subsidize 75 per cent of the wages of employees kept on the payroll of an SME, even if there is no work for them to do. Previously the government said it would subsidize just 10 per cent of employee wages under the same circumstances. The plan is designed to support workers, but also to maintain the connection between companies and their workers so that they are ready to be quickly to swing into action when social distancing ends and the economy can recover.
- Trudeau also announced the creation of the Canadian Emergency Business Account. This account will provide SMEs loans of up to $45,000. The loans will be interest free, and under certain conditions up to $10,000 of the loan will be forgiven. More details of both new programs will be revealed on Monday.
- Finance Minister Bill Morneau announced that businesses that remit their HST – GST collections on a monthly basis will their federal tax payments for March, April and May deferred until the end of June. He also said more financial support will be available to small and medium size businesses through a new program administered by the federal Business Development Bank.
- $12.5 billion in support will go to Export Development Canada and the Business Development Bank of Canada to help small and medium with operational cash flow requirements.
In addition to immediate support for companies and their workers, both programs are designed to keep essential elements of the economy ticking over to resume normal functions when the crisis passes.
The Deputy Chief Medical Officer of health also noted that they expect this crisis to be months, not weeks.
The Province sent out an emergency alert advising travellers that they are at high risk of spreading COVID-19, and that travellers are required by law to self-isolate for 14 days. I am sure you saw it come in on your phone.
The Premier also provided an update on the issue of price gouging. He said that his discussed it with his cabinet yesterday, and the government will be looking at ways to implement “severe fines” for retailers that price gouge during this emergency. I suspect that the government will work within existing consumer protection and emergency powers legislation to address this.
Minister Phillips reiterated the support that Ontario’s Action Plan provides for businesses.
- Hospitality Sector: Takeout and Delivery of Alcohol
- $10 billion available over the next month to provide cash flow for businesses through tax deferrals and other measures. The Minister stressed that he is working in coordination with his federal counterpart.
- 5 month grace period for business to file or pay provincial taxes (employer health, gas, tobacco tax)
- WSIB premiums to be deferred up to 6 months.
- Cutting taxes by $355 million for about 57,000 employers through a proposed temporary increase to the Employer Health Tax (EHT) exemption
The Premier asked that Ontarians listen to the please from rural mayors, and avoid self isolating at cottages. The Premier stressed that this is causing additional strain on the supplies in small communities, and on the local health systems.
Minister Elliott acknowledged that sourcing PPE and ventilators is the top priority of the government every day. Both the Premier and Minister are actively working with their regular suppliers, the federal government, and Ontario companies that are stepping up to help.