COVID-19 Update for March 27, 2020 – 12:00pmMarch 27, 2020
New support for small and medium size businesses
Prime Minister Justin Trudeau announced new fiscal policy measures to support small and mid-size Canadian businesses this morning, asking them to keep employees on their payroll and consider rehiring employees who may have been laid off.
- Payroll subsidies announced last week, are increasing from 10 per cent of remuneration paid to 75 per cent, backdated to March 15.
- The government is launching the Canada Emergency Business Account, which will allow banks to provide loans of up to $40,000, secured by government, to qualified businesses. The loans will be interest-free for the first year and up to $10,000 will be forgivable for those that qualify.
- GST and HST payments and duties and taxes on imports are deferred until June, amounting to $30 billion in interest-free loans to support businesses.
- An additional $12.5 billion in support will go to Export Development Canada and the Business Development Bank of Canada to help small and medium with operational cash flow requirements.
The Prime Minister said additional details will be available Monday.
Bank of Canada lowers interest rate
The Bank of Canada has made a second unscheduled cut to its benchmark interest rate, lowering it to 0.25 per cent to lower short-term borrowing costs.
Prior to today, Canada had the highest central bank rate in the developed world at 0.75 per cent.
When asked about the sudden decision to lower the rate and bring in new support programs, Bank Governor Stephen Poloz said “some may suggest this is using a lot of firepower but I think a firefighter has never been criticized for using too much water.”
A federal budget?
When asked if the federal government would release a federal budget as planned next week the Prime Minister avoided answering the question directly. He responded that the focus right now is on support programs such as the ones announced today.
If you have any questions about this update, please let us know.
The Enterprise Team