Recently both the federal and Ontario governments have made announcements regarding new and existing COVID relief programs for businesses.
The Ontario government announced two new grants, the Ontario Small Business Relief Grant and the Ontario Business Costs Rebate Program.
The federal government provided a one-year extension for Canada Emergency Business Account (CEBA) loan repayments such that interest relief and repayment deferral will now last until December 31, 2023.
With respect to federal wage and rent subsidies, the new Tourism and Hospitality Recovery Program (THRP) and the Hardest-Hit Business Recovery Program (HHBRP) apply to those businesses with revenue declines of 40% and 50% respectively.
Also, the THRP has been temporarily expanded for any business experiencing a 25% decline in revenue that is subject to a capacity limitation of 50% due to a public health order for the period between December 19, 2021, to February 12, 2022.
Read further to see our discussion about these various measures.
ONTARIO BUSINESS GRANTS
Ontario Small Business Relief Grant
Eligible businesses which were required to close due to public health orders that took effect on January 5, 2022 will receive a grant of $10,000.
Businesses must have fewer than 100 employees (as of December 31, 2021) and be an active business as of January 14, 2022.
Eligible small businesses include:
- restaurants and bars
- facilities for indoor sports and recreational fitness activities (including fitness centres and gyms)
- performing arts and cinemas
- performing arts venues and cinemas, museums, galleries, aquariums, zoos, science centres, landmarks, historic sites, botanical gardens and similar attractions
- meeting or event spaces
- tour and guide services
- conference centres and convention centres
- driving instruction for individuals
- before- and after- school programs
Applications are not yet open, but the portal should be active in January 2022 as payments are expected to be made in February 2022. Businesses that received this grant in 2021 will only need to confirm eligibility.
See the Ontario Business Support website HERE to apply once the program is open.
Ontario Business Costs Rebate Program
Certain businesses required to close or reduce capacity will receive a rebate for a portion of their property tax and energy costs.
Eligible businesses required to reduce capacity to 50% will receive a rebate of 50% of their costs, while businesses required to close indoor activities will receive a rebate of 100% of their costs. Payments will be retroactive to December 19, 2021.
Eligible businesses include:
- restaurants and bars
- personal care services (hair or body)
- retailers (non-grocery, less than 50,000 sq ft)
- small grocery stores (less than 5,000 sq ft)
- gyms and other indoor sports and recreational facilities
- places of worship
- indoor meeting and event spaces
- indoor concert venues, theatres and cinemas
- casinos, bingo halls and other gaming establishments
- indoor portion of horse and car racing tracks
- indoor museums, galleries, aquariums, zoos, science centres, landmarks, historic sites, botanical gardens and similar attractions
- indoor clubhouses at outdoor recreational amenities
- indoor businesses associated with tour and guide services
- steam rooms and saunas
- oxygen bars
- bathhouses and sex clubs
- indoor teaching and instruction centres
- indoor driving instruction centres
- day camps and overnight camps for children
- before- and after-school programs
- pet and veterinary services
Businesses are required to submit proof of the expenditures by way of a 2021 property tax statement and monthly energy bills. If a business remains eligible after the initial application, they are required to return to the application portal to submit new energy bills for each additional month they are eligible.
CEBA LOAN EXTENSIONS
The Canada Emergency Business Account (CEBA) program has provided interest-free, partially forgivable loans of up to $60,000 to small businesses and not-for-profit organizations as part of their COVID relief measures. Of that amount up to $20,000 would be forgiven if the amount was repaid by December 31, 2022.
The federal government has extended the repayment deadline for CEBA loans to qualify for partial loan forgiveness from December 31, 2022, to December 31, 2023, for borrowers in good standing. This also means that the loans will be interest free until that date.
Loans outstanding on that date would be repayable over two years with interest only payments of 5% commencing on January 1, 2024, with the loans fully due by December 31, 2025.
The government is also announcing that the repayment deadline to qualify for partial forgiveness for CEBA-equivalent lending through the Regional Relief and Recovery Fund is extended to December 31, 2023.
BUSINESS SUPPORT PROGRAMS
Wage and Rent Subsidies
The Canada Emergency Wage Subsidy (CEWS) ran from March 15, 2020 until October 23, 2021 and the Canada Emergency Rent Subsidy (CERS) ran from September 27, 2020 until October 23, 2021. Applications must be filed within 180 days of the end of the last period. The last period available to all businesses ended October 23, 2021 such that the last application will be due no later than April 21, 2022.
The CEWS and CERS programs are essentially extended through the new Tourism and Hospitality Recovery Program (THRP) and the Hardest-Hit Business Recovery Program (HHBRP) from November 20, 2021 until May 7, 2022, with a possibility they will continue until July 2, 2022. Those programs require a 40% or a 50% decline in revenues respectively.
The Canada Recovery Hiring Program (CRHP) provides a 50% subsidy for an increase in most wages for those employers suffering a decline in revenue of 10% or more. The program will now be in effect for remuneration paid to eligible employees until May 7, 2022, but may be extended until July 2, 2022.
Local Lockdown Program
A business can also qualify for wage and rent subsidies if it was subject to a government-imposed public health restriction and saw a 25% decline in revenue for the period. Although this program is implemented through the THRP program, businesses do not need to be in the tourism or hospitality industry to qualify and do not need to meet the 12-month revenue decline test that the program normally requires.
This measure applies for the period from December 19, 2021, to February 12, 2022 (claim periods 24 and 25).
A public health restriction must:
- be based on an order or decision issued by a federal, provincial, or municipal government, or a local health authority in response to the COVID-19 pandemic
- be limited in scope based on one or more factors such as:
- geographical boundaries
- type of business or other activity
- risks associated with a particular location
- result in sanctions or be an offence if you do not comply
- require you or your non-arm’s-length tenant at the qualifying property to stop some or all regular activities at the qualifying property for at least 7 days;
- the activities that were stopped account for at least approximately 25% of the eligible revenues earned during the prior reference period from or in connection with the affected qualifying property
You do not qualify for support if you are already restricted or closed because you failed to comply with a previous public health order, or decision.
More information on those programs can be found HERE.
If you have any questions concerning the above, do not hesitate to contact your trusted advisor at Wilkinson & Company LLP.
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