May 11, 2020: Federal Tax Response to COVID-19

May 11, 2020

May 11, 2020: Federal Tax Response to COVID-19

Synopsis
5 Minute Read

Today Prime Minister Justin Trudeau announced the following new measures providing support to businesses experiencing financial hardship as a result of the COVID-19 pandemic:

Insight
Insight

TAX UPDATE

Response to COVID-19

May 11, 2020

Today Prime Minister Justin Trudeau announced the following new measures providing support to businesses experiencing financial hardship as a result of the COVID-19 pandemic:

Large Employer Emergency Financing Facility (LEEFF)

The LEEFF offers bridge financing to employers whose needs during the pandemic are not being met through conventional financing arrangements and require additional funding to maintain operations. The Government reiterated their objective of protecting Canadian jobs, helping Canadian businesses weather the current economic downturn, and avoiding bankruptcies of otherwise viable businesses where possible.

The program will be open to large for-profit businesses, with the exception of those in the financial sector, as well as certain not-for-profit businesses, such as airports, with annual revenues generally in the order of $300 million or higher. To qualify for LEEFF support, eligible businesses must be seeking financing of approximately $60 million or more, have significant operations or workforce in Canada, and not be involved in active insolvency proceedings. Support through LEEFF will be delivered by the Canada Development Investment Corporation (CDIC), in cooperation with Innovation, Science and Economic Development Canada (ISED) and the Department of Finance.

More details on the LEEFF program, and its application process, are expected to be released in the coming days.

Financial Support for Businesses

The Government announced that the Business Credit Availability Program (BCAP) has been expanded to support mid-market businesses with loans of up to $60 million per company and guarantees of up to $80 million. Through the BCAP, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will work with private sector lenders to support access to capital for Canadian businesses in all sectors and regions.

The Government also announced that it will continue to provide financing to businesses through Farm Credit Canada, the BDC, and EDC, including through the Canada Account.

Other Announcements:

Canada Emergency Wage Subsidy (CEWS)

The Federal Government has announced that the 12-week CEWS program will be extended past its original end date of June 6, 2020. Further details are expected to be released in the coming days.

What Does This Mean?

The Government continues to respond to the economic hardship of Canadians that has resulted from the COVID-19 pandemic. Should you have questions on these programs and how they may affect you, contact your MNP Advisor.

This situation is dynamic and government programs can change. To stay up to date and receive insights from our team, visit our COVID-19 Business Advice Centre at MNP.ca/COVID-19. We’re dedicated to supporting Canada’s business leaders by providing timely information and practical solutions for navigating through the uncertainty of COVID-19.

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