Prime Minister Justin Trudeau says the federal government will cover 75 per cent of salaries for workers of qualifying small and medium sized businesses affected by COVID-19.
That is an increase from the 10 per cent the government said it would cover earlier this month. It is part of a broader effort from the government to support businesses hit hard by the pandemic, allowing staff to continue to be paid, or re-hired, while helping businesses recover.
The subsidy is retroactive to mid-March.
“You’ve had to slow down your operations, in some cases you’ve even had to close up shop for the foreseeable future, and because money isn’t coming in, you can’t afford to keep your employees on the payroll,” he said. “These are really tough decisions.”
Ottawa has also launched the Canada Emergency Business Account, working with banks to provide loans of up to $40,000 for small businesses which will be interest free for the first year. If certain conditions are met, the first $10,000 will be forgiven.
“With these new measures our hope is that employers who have been pushed to laying off people because of COVID-19 will think again,” added Trudeau. “And for those of you that have already had to lay off workers, we hope you will reconsider rehiring them given this payroll support.”
The government needs to hammer out the details on how these supports for small businesses will be implemented, with an update expected by Monday. These measures announced on Friday, follow the Bank of Canada’s decision to cut its benchmark interest rate, a move that Trudeau says he supports.
There are also plans to defer GST and HST payments and duties and taxes on imports until June, which Trudeau says is the equivalent of giving $30-billion in interest free loans to businesses.
Asked about paying for these measures, the prime minister is confident the economy will bounce back after COVID passes. A $107 billion financial assistance and stimulus package has also passed through Parliament.
And there are announcements expected in the coming days to focus on helping the youth, marginalized people, and people who live in poverty.
