Protecting Canadian business: a look at the government’s COVID-19 crisis support programs


As businesses recalibrate for recovery, challenges are likely to persist.

Although not all businesses will need government assistance, every business should be aware of the programs on offer and the expected status of those programs going forward. In this article, we outline some of the key programs announced thus far, comment on businesses' experience with them so far and their ongoing role, and include links to relevant in-depth analysis from Torys lawyers.


The Canada Emergency Wage Subsidy (CEWS) is the cornerstone of the federal government’s COVID-19 response for businesses. The subsidy amounts to 75% of every eligible employee’s remuneration up to a maximum of $847 per employee per week and has no aggregate limit. This is intended to materially facilitate an eligible business’ ability to bridge these difficult months without laying off substantial numbers of employees, especially for those employers in industries that have been forced to shut down and are only starting to slowly re-open eligibility requirements and the operation of this program (you can read more on eligibility requirements here).

  • Widespread use. We anticipate that over 1 million businesses will apply for, and benefit from, the CEWS; in fact, in the first few hours of the opening of the application portal on April 27, 2020, over 10,000 employers applied. The application, which can be accessed here, is relatively straightforward.
  • Leveraging the program’s flexibility. The program provides important built-in flexibility for businesses that are larger employer groups by allowing a group of eligible employers that normally prepares consolidated financial statements to determine qualifying revenue separately or to allow each employer to benefit from the qualifying revenue of the group as a whole. The election to use one or another accounting method is binding on future applications. Therefore, businesses should envisage various financial scenarios as the economy slowly re-opens and their respective impact on the ability of the employer group to maximize the CEWS when making the initial election.
  • Looking ahead. As businesses plan for the months ahead, we note that the CEWS program will end on June 6, 2020. However, the federal government can extend the program with additional qualifying periods by regulation to as late as September 30, 2020. Any further extensions beyond that date would likely require Parliamentary approval.
  • Publicly available list of recipients. Businesses should be aware that the federal government has indicated that a list of CEWS recipients will be made publicly available. Recipient businesses should be mindful of potential public scrutiny. This is especially relevant for public issuers whose decisions on executive compensation are publicly disclosed.
  • Temporary Wage Subsidy. Employers not eligible for the CEWS can consider its predecessor program, the Temporary Wage Subsidy (TWS). The TWS is a three-month measure allowing eligible employers to reduce their remittances to the CRA of income tax withheld on their employees’ remuneration up to 10% of eligible payroll. For employers that are eligible for both the CEWS and the TWS for a period, any benefit from the TWS for remuneration paid in a specific period will generally reduce the amount available to be claimed under the CEWS for the same period.


The federal government has redeployed the Business Credit Availability Program (BCAP) that was initially established in 2009 following the global financial crisis to help Canadian business obtain financing during this period of disruption. The current iteration of the BCAP is implemented through Export Development Canada and the Business Development Bank of Canada (BDC). Together, these institutions will provide more than $65-billion of funding through direct lending, loan guarantees and other types of financial support. For more information on emergency liquidity programs, consult this bulletin.

The sums involved can be substantial—medium-sized companies with revenues in excess of $50 million could obtain up to $12.5 million through the two streams. Unlike wage subsidies, these loans can be used for various business expenses.

Although the loans are generally provided on favourable terms and with relatively low interest rates, they remain interest-bearing loans that are generally not forgivable. Businesses should consult their financial advisors to ensure that additional debt levels are appropriate in light of all circumstances.For small businesses with payroll under $1 million, the Canada Emergency Business Account provides an interest-free $40,000 loan, $10,000 of which is forgivable if $30,000 is repaid by December 31, 2022. On these terms, we encourage small businesses to take advantage of this loan, though we note that the sums involved may be too small to make a material impact on a small business’ medium- to long-term planning. Small businesses facing financial hardship would do well to combine the CEWS with this and other loans available, and to discuss with their landlords applying for government-funded rent relief (more on that below).

Rent relief

The federal and provincial governments have come together to provide the Canada Emergency Commercial Rent Assistance (CECRA). The CECRA will provide forgivable loans to commercial property owners with mortgages to cover 50% of three monthly rent payments payable by eligible small business tenants (those who pay less than $50,000 per month in rent and whose revenues have dropped by at least 70% compared with pre-COVID-19 revenues) if the property owners agree to a rent reduction agreement with the small business tenant, reducing rent by at least 75%.

Certain features of CECRA may limit the overall effectiveness of the program to provide rent relief for qualifying small businesses. These include:

  • the CECRA is not available for tenants whose landlords do not have mortgages with financial institutions in Canada, though the Minister of Finance has indicated that an additional program for these landlords will be forthcoming;
  • many small business tenants have indicated that qualifying landlords with eligible small business tenants are choosing not to opt in to the program, thereby preventing tenants from benefitting from rent relief; and
  • the program has not been clarified to address certain scenarios such as franchise or chain tenants, and sub-letting arrangements, among other scenarios.

As the CECRA is a recently announced program, we expect further developments and clarifications over the coming weeks.

Other relief

The federal government has introduced other measures to alleviate the financial pressure on all businesses during these times. These are not opt-in programs and can be taken advantage of without eligibility or application criteria. The CRA will allow all taxpayers to defer until September 1, 2020 the payment of any income tax balances or instalments under Part I of the Tax Act that become payable on or after March 18, 2020 and before September 2020. During this period no interest or penalties will be imposed on these amounts owing. GST/HST and customs duties otherwise due in March, April or May can be deferred until June 30, 2020 (read more information on tax-related changes and announcements here).

The Ontario Financial Services Regulatory Authority (FSRA) will permit amendments of defined contribution pension plans registered in Ontario that temporarily reduce employer contributions to zero, provided that the effect of such an amendment does not extend beyond the end of 2020. Federally regulated defined benefit pension plans can leverage a moratorium on solvency payments until the end of 2020, and the Office of the Superintendent of Financial Institutions indicated that appropriate assistance for 2021 is currently under discussion.

Startups and life sciences companies

For startups and life sciences companies, the federal government has announced a number of targeted programs to help with research financing, recoveries, tax relief and bridge financing (you can get more information on the suite of programs here). We also discuss the details of on BDC’s Bridge Financing Program that may assist hesitant investors in closing funds or investments that have stalled as a result of the pandemic.

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