The federal government has increased the size of its interest-free loan program for small businesses by $20,000, in an effort to help them weather the COVID-19 pandemic.
The Canadian Emergency Business Account (CEBA) was initially launched with a maximum credit limit of $40,000, but this has now been increased to $60,000. The government hopes that this will provide more support for businesses and help them stay afloat during these challenging times.
Additional Funding for Innovative Businesses
In addition to the increase in CEBA funding, the government has also announced an additional $250 million over five years for the Strategic Innovation Fund (SIF). This fund supports large-scale transformative projects that have the potential to drive growth and create jobs in Canada’s economy.
The SIF will help innovative firms weather the pandemic and grow into world leaders. The added funds will support intellectual property-rich firms, helping them navigate the challenges presented by COVID-19.
Regional Development Agencies Receive Boost
A top-up of up to $500 million has been earmarked for Regional Development Agencies (RDAs) and the Community Futures Network of Canada. This brings total funding for this fund to over $2 billion.
The government is also proposing up to $3 million for the Canadian Northern Economic Development Agency, which will go towards foundational economic development projects in Canada’s territories.
Industry Leaders Welcome Support
Alla Drigola, director of parliamentary affairs and small business policy at the Canadian Chamber of Commerce, welcomed the extension and expansion of CEBA alongside other regional supports. She noted that the program has been a success for small businesses and will go a long way towards helping them weather the storm.
Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), also welcomed the top-ups and extensions for key COVID-19 support programs for small business. However, he expressed disappointment that the federal government did not include fixes for new businesses and self-employed Canadians who remain ineligible for nearly all of the key support programs.
Working from Home: Simplifying Home Office Deductions
The government’s economic update also recognized that many Canadians are working from home during the pandemic. To simplify the process for both taxpayers and businesses, the Canada Revenue Agency (CRA) will allow employees working from home due to the pandemic to claim up to $400 based on the amount of time spent working from home.
This change aims to make it easier for workers to claim home office deductions without having to track detailed expenses. The government has also stated that they generally will not request signed forms from employers, making the process even simpler.
Conclusion
The federal government’s boost to CEBA and additional funding for innovative businesses demonstrate their commitment to supporting small businesses through the pandemic. These measures are expected to provide a much-needed injection of support for businesses, helping them navigate these challenging times.
While industry leaders have welcomed the support, there is still more work to be done to ensure that all businesses, including new ones and self-employed individuals, receive the help they need.
Sources:
- Government of Canada: Economic Update
- Canadian Chamber of Commerce: CEBA Extension and Expansion
- Canadian Federation of Independent Business (CFIB): CEBA Top-ups and Extensions
