Rent Relief Is Coming To Small Businesses

UPDATE: Rent relief is coming to small businesses affected by the COVID-19 shutdowns. On April 24, the federal government announced a new program (the Canada Emergency Commercial Rent Assistance) that will lower rent up to 75% for small companies who have lost most (if not all business). The program will run through April, May, and June. Commercial property owners (these businesses' landlords) would cover 25% of the reduction and the government (federal and provincial) the rest. The loan is forgivable if these landlords decrease rent by three-quarters or forgo having tenants pay it entirely. Details on how to apply are imminent.

While many of us are caught up in an endless loop of Netflix Canada-binging, snacking, and counting the steps from the couch to the kitchen as exercise, we’re also trying to come to terms with the harsh economic realities around the COVID-19 pandemic. Between social-distancing, border closings, international travel bans, and businesses all over the country shuttering to prevent the spread of the virus, at least two-thirds of Canadians are facing the scary reality of wondering where their next paycheque might come from. The federal government has stepped up by announcing a $107-billion economic relief package to help with emergency support benefits, including money for small businesses, extensions on taxes, student-loan deferments, and the new Canada Emergency Response Benefit (CERB).

But how exactly is this money going to be distributed? Who’s eligible to get the money? How do we apply for EI or CERB? And how long will it take for them to kick in? Here, we answer your most-pressing questions about how to get the financial support you need for yourself, your family, or your business during this uncertain time. 

As economists predict an upcoming recession, and as non-essential businesses are being forced to shut down and people left without a regular income, that number is only going to get larger.

The good news? The one-week waiting period for EI has been waived for people who work salaried jobs or shift work. Just make sure you have your Record of Employment from your employer ready to prove how long you worked at your job, and what you got paid. Once you apply, you should have money in their bank account two, yes two!, business days after your file is processed. By filing for EI, you’ll receive 55% of your income per week up to $573 for up to 45 weeks.

Salaried and shift workers (as well as freelancers and contract workers, who normally wouldn’t be covered by EI) are also being looked after under the new Canada Emergency Response Benefit (CERB). This plan will pay $2,000 per month for up to four months to any person who lost their job, or had reduced hours and income due to COVID-19. This includes anyone who couldn’t work because they got sick, or had to be quarantined, or if they had to take care of someone who got sick with COVID-19.

Canadians who work part-time and contract jobs and earn less than $1,000 a month, can now qualify for the Canada Emergency Response Benefit. Seasonal workers and people whose employment insurance (EI) has recently run out will also be eligible, Prime Minister Justin Trudeau said in his daily briefing on April 15.

Funds are available retroactively as of March 15 until October 3. You can apply for the CERB through an online web portal. To ensure the site doesn't crash, the government has asked set up guidelines for who can apply when based on the month you are born: Those born January to March are asked to apply on April 6; those whose birth months are April to June on April 7; July to September can apply on April 8; and finally October to December birth months are asked to apply on April 9.

You will receive your first payment a maximum 10 business days (3 if you signed up for direct deposit) after you’ve applied and are approved. Just remember: If you’re eligible for and have already applied for EI, you will not qualify for CERB.

You’re not alone. A new poll by Angus-Reid found that three in 10 Canadians are concerned that they will be unable to pay for housing expenses because of coronavirus’ impact on jobs. Despite an online petition to defer rent payments, so far there hasn’t been any official chatter around the subject. However, there have been freezes and moratoriums around evictions in Ontario and B.C., two provinces that have been hardest hit by COVID-19.

Homeowners who need it can expect a six-month mortgage deferral, according to the Canadian Bankers Association, a policy and advocacy organization representing nearly 60 domestic and international banks in Canada. If you have a mortgage from any of the Big Six banks, reach out to your lenders to be assessed on a case-by-case basis. None of the banks has released official eligibility criteria for these mortgage deferrals. 

If you’re carrying around a balance on that credit card, a student loan, or other loans, I have some good and bad news. The good news is, last week, the Bank of Canada slashed its key interest rate by 1% down to 0.75%. That means if you have a variable line of credit, car loan, or mortgage, your interest charges will be reduced on your next bill. Yay! The bad news is this doesn’t apply to your credit card, which usually has the highest interest rate — anywhere from 18% to 25%, plus annual fees. Your best bet would be to call your credit-card company and either negotiate the terms of your payment with them personally, or consolidate your balance into a lower-interest account, like a line of credit.

If you still have student loans as of March 30, 2020, all student loan borrowers across the country automatically have their repayments suspended until September 30, 2020! That means you don’t have to pay anything, not even interest for six whole months, and there's no application process involved. Sweet, sweet relief. 

This isn’t a hall pass to use that money to load up on more athleisure and loungewear, no matter how tempting it is given our current WFH situ. Instead, consider building up whatever is not going to that student loan into a little rainy-day fund. Or, put that money towards higher-interest debt, like that credit card. Or even save it to pay your taxes — which brings me to my next point.

Another silver lining in all of this financial uncertainty are the tax-deadline extensions — to June 1 instead of the typical April 30. (Although, if you’re getting a refund, it makes sense to file as soon as possible — more money in your pocket and all.) The bigger savings will be for those who have to pay on their tax return. You now have until August 31, so you can keep that money in your bank account (hopefully a high-interest one) longer.

This extension is especially helpful for freelancers or contractors who typically pay their taxes quarterly. Instead, take the money you were going to pay next quarter, and save it as an emergency fund. You’ll still have to pay that eventually, but it’s a good idea to hold onto it for essential expenses as we weather this storm.

Half of the country’s small businesses have seen a drop in sales since coronavirus, with more to come now that non-essential businesses are closed. Worse, according to the Canadian Federation of Independent Business (CFIB), one in four companies won’t be able to survive longer than a month with their income cut in half, let alone none coming in at all. Which, as we know, means the terrible task of laying off employees and friends.

Here are some solutions: Through the Canada Emergency Wage Subsidy, the federal government is offering temporary employee wage subsidies up to 75% (up to $58,700) for three months to keep staff on payroll. (Details on how to apply are imminent.) Alternatively, small-business owners can take advantage of the extension of Canada’s Work-Sharing program from 38 weeks to 76 weeks. This is where businesses across Canada that are affected by the downturn in business due to COVID-19 can have their staff agree to working fewer hours while being subsidized by EI. This is a great way to reduce the financial pressure of making a full payroll, and avoiding having to lay people off. Unfortunately, the application process is quite extensive.

On March 27, the federal government announced another program, the Canada Emergency Business Account, which will offer interest-free (for a year) loans of up to $40,000 to small-businesses. HST/GST payments will also be pushed back until June, the PM revealed.