Outline of the current federal funding options for restaurants in Canada.
1. Federal Government Assistance for Restaurants
Canada Emergency Business Account (CEBA)
Canada Emergency Business Account program will provide small businesses with interest-free loans of up to $40,000, with a forgivable portion of 25 per cent up to $10,000, if it is paid back by December 31, 2022. The loans are designed to help businesses cover their operating costs during a period where their revenues have been temporarily reduced due to COVID-19. Contact your primary financial institution to apply for these loans.
Canada Emergency Wage Subsidy
The Canada Emergency Wage Subsidy is a 75% wage subsidy for qualifying businesses for up to three months (backdated to March 15, 2020). Eligible employers are those that have a drop of at least 15% (previously 30%) of their revenue during eligible periods. Companies will have to reapply each month and demonstrate that their revenue in that month is less than it was in the same month the year prior.
To apply, employers must go through the My Business Account portal on the CRA’s website. Funds should then start to flow to businesses within the next three to six weeks. However, it’s important to note that these funds are for employee wages only and not for other operating costs such as rent and utility payments.
It’s important to note that the government has announced that anyone who receives the subsidy, but is proven to be ineligible will have to repay the funds in full.
Canada Emergency Response Benefit (CERB)
The federal government has also proposed legislation to establish the Canada Emergency Response Benefit (CERB). CERB is a taxable government payment of $2,000 a month for up to four months for workers grappling with job loss or other circumstances that have resulted in a sudden loss of income due to COVID-19.
CERB applies to wage-earners, as well as contract workers, and self-employed individuals who would otherwise not be eligible for Employment Insurance (EI). The federal government has also noted that anyone still working up to 10 hours a week or less will be eligible for CERB – a measure that helps to extend the program’s benefits to restaurant staff working reduced hours.