Prime Minister Justin Trudeau has announced the expansion of eligibility criteria for the Canadian Business Emergency Account to include the many small businesses and their owners. This expansion will help them protect the jobs Canadians depend on.
Changes to the Canadian Business Emergency Account will give more small Canadian businesses access to interest-free loans to help cover their operating costs at a time when their revenues have been reduced by the pandemic.
This program is now available to a greater number of businesses where the sole proprietor derives income directly from the business, or where the business relies on contract workers, or where the family business compensates its employees with dividends instead of pay.
To qualify for the expanded criteria, applicants with a payroll of less than $20,000 must hold the following:
- a corporate operating account at a participating financial institution;
- a Canada Revenue Agency business number, and have filed a tax return in 2018 or 2019;
- eligible non-deferrable expenses totalling between $40,000 and $1.5 million. These expenses could include rent, property taxes, service charges and insurance.
Expenditures will be subject to verification and audit by the Government of Canada. Funding will be disbursed in partnership with financial institutions. More details will follow in the coming days, such as when it will be possible to apply under the new criteria. To date, more than 600,000 small businesses have accessed the Canadian Business Emergency Account. The government is also studying several solutions to help business owners and entrepreneurs who operate their business using their personal bank account instead of a business account, or who have not filed a tax return, such as new businesses.
This measure is part of Canada’s Economic Action Plan to respond to the COVID-19. Canadians and the protection of middle-class jobs are at the heart of this plan.
