Federal Updates

April 24, 2020

April 24, 2020

Key Policy Initiatives:

a) Canada Emergency Wage Subsidy: The Federal Government will fund 75% of employee’s wages for up to three months to business which have seen at least a 15% decline in revenues due to COVID-19. The subsidy can be back dated to March 15th, 2020. The Federal Government will start accepting applications for the CEWS on April 27th, 2020.

b) Canada Emergency Commercial Rent Assistance for Small Business: On April 24th,2020, Prime Minister Trudeau announced that the Federal Government had reached a deal with all of the provinces to provide rent relief for small businesses struggling due to COVID-19. The Canada Emergency Commercial Rent Assistance (CERA) program will lower rent for small business by up to 75%. The program will work as follows;

  • The program will provide forgivable loans to qualifying commercial property owners to cover 50 percent of three-monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May and June.
  • The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75 percent for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25% of the rent.
  • Impacted small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations


c) Canada Business Emergency Account: Banks will be offering $40,000 loans guaranteed by the federal government. These loans will be interest free for one year, and for qualifying businesses $10,000 of the loan will be forgivable. Eligible businesses must have had a payroll expense in the range of $20,000- $1,500,000 in 2019.

d) Canada Emergency Response Benefit providing a taxable benefit of $2,000 a month for up to 4 months to support workers who lose their income as of result of the COVID-19 pandemic. The benefit would cover Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. Additionally, workers who are still employed, but are not receiving income because of disruptions to their work situation related to COVID-19, would also qualify for the CERB.


a) Export Development Canada and The Business Development Bank of Canada allocated $12.5-billion dollars to be given to small and medium size business to meet operational costs.

b) Deferral of GST & HST payments: Allows for all businesses including self-employed individuals to defer all GST and HST payments until June.

c) Interest Rate: On March 27th, 2020 the Bank of Canada lowered its target for the overnight rate by 50-basis points to ¼ percent.

d) Quantitative Easing: The Bank of Canada announced a new program of government bond purchase:

  • The Commercial Paper Purchase Program (CPPP) will help to alleviate strains in the short-term funding markets and thereby preserve a key source of funding for business. Details are available on the bank’s website.
  • The Bank of Canada will begin acquiring Government of Canada securities in the secondary market. Purchases will begin with a minimum of $5-billion/week across the yield curve.

e) Introduces a pause on the repayments of Canada Student Loans in the Canada Student Financial Assistance Act, the Canada Student Loans Act, and the Apprenticeship Loans Act in order to introduce a 6-month moratorium on the repayment of Canada Student Loans for all borrowers currently in repayment.

f) Supports the agriculture and agri-food sector by amending the Farm Credit Canada (FCC) Act to temporarily provide the Minister of Finance with the flexibility to set the limit on the amounts that may be paid by the Minister of Finance to FCC out of the Consolidated Revenue Fund to ensure continued availability of credit to businesses in the agriculture and agri-food sector.

g) Supports the mortgage financing market in Canada by enhancing the Canada Mortgage and Housing Corporation’s (CMHC) access to capital, and increasing its insurance-in-force and guarantees-in-force legislative limits, so that it can continue to provide stable funding to banks and mortgage lenders in support of continued lending to Canadian businesses and consumers.

h) Protects Canadians from the Spread of COVID-19 by providing authority to a federal minister to requisition funds from the Consolidated Revenue Fund with the concurrence of the Minister of Finance and the Minister of Health to support federal efforts to prevent or control the spread of COVID-19.

i) Provides the Minister of Finance with flexibility to respond expeditiously to COVID-19 developments, by amending the Financial Administration Act (FAA) to temporarily remove the requirement for the Minister of Finance to receive Governor in Council’s authorization in order to use emergency powers.

j) Supports the protection of Canadians’ savings by providing the Minister of Finance with the flexibility to increase the Canada Deposit Insurance Corporation’s deposit insurance limit beyond its current level of $100,000.