Government Announces Expansion To Eligibility Criteria For Canada Emergency Business Account

0
Prime Minister Justin Trudeau. Photo by Maddie Binning

Prime Minister Justin Trudeau announced changes to the eligibility criteria for the Canada Emergency Business Account (CEBA) on May 19, expanding the program to include various owner-operated small businesses. 

When CEBA launched on April 9, it offered interest-free loans to businesses with a 2019 payroll between $50,000 and $1 million. The government expanded the eligibility for the program in mid-April by increasing the payroll eligibility range to between $20,000 and $1.5 million. Support from the program will now be available to more businesses that are sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends instead of payroll. The launch date for applications under the expanded criteria as well as other details will be released soon, according to the announcement.

“Canadians are counting on us to protect their jobs and help them pay their bills during this difficult time,” Trudeau said in the announcement. “By expanding the CEBA, we will be giving more businesses access to the support they need, so they can help protect workers and the jobs they rely on. Today we are helping to keep more businesses open and more Canadians working, so we are better prepared for the recovery to come.”

To qualify under the new eligibility criteria, applicants with payrolls under $20,000 need a business operating account at a participating financial institution, a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return. They also need eligible non-deferrable expenses between $40,000 and $1.5 million, which could include costs such as rent, property taxes, utilities and insurance.

Expenses will be subject to verification and audit by the Canadian Government and funding will be delivered in partnership with financial institutions. Over 600,000 loans have been approved since the program launched, according to the government, providing loans of up to $40,000 to small businesses affected by COVID-19. In addition, 25 per cent of the loan is forgivable if businesses repay by Dec. 31, 2022.

The announcement also stated that the government will work on possible solutions to help business owners and entrepreneurs that operate through their personal bank account instead of a business account, or have yet to file a tax return, such as newly created businesses.

“Small businesses are at the heart of our communities, and they drive our national economy,” said Mary Ng, minister of small business, export promotion and international trade, in the announcement. “By making our lending supports more generous and inclusive, we’re working hard to save Canadian jobs and businesses. We will continue to be there for Canadian businesses and workers every step of the way through this crisis.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here