Round-up of Canada’s financial assistance programs for farms
By Greenhouse Canada
By Greenhouse Canada
The Government of Canada rolled out a number of new financial initiatives in the past few weeks to help growers weather through the pandemic period. Note that some programs are administered at the provincial level. Here’s an overview.
Advance Payments Program: Those with outstanding loans from the Advance Payments Program (APP) due on or before April 30, 2020 will receive an extension of six months to repay the loan. The new deadline for outstanding APP loans is October 2020 for 2019 cash advances on flowers and potted plants. This measure represents $173 million in deferred loans. Eligible growers with outstanding interest-free loans can apply for an additional $100,000 interest-free portion for 2020-2021, as long as their total APP advances remain under the $1 million cap.
Business Credit Availability Program (BCAP): Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will provide $65 billion in direct lending and other types of financial support at market rates to businesses with viable business models whose access to financing would otherwise be restricted. Contact your financial institution for details.
Canada Emergency Business Account: As part of the BCAP, this is an interest-free loan of $40,000 for qualifying businesses. Up to $10,000 of that amount will be eligible for complete forgiveness if $30,000 is fully repaid on or before December 31, 2022. Businesses and not-for-profits are eligible to apply for this loan if they have an annual payroll of between $50,000 and $1 million.
FCC’s increased lending capacity and payment deferral: The federal government increased the lending capacity of Farm Credit Canada (FCC) by an additional $5 billion. FCC also put in place a deferral of principal and interest payments up to six months for existing loans or a deferral of principal payments up to 12 months, as well as access to additional credit up to $500,000. Non-FCC customers are also eligible to apply.
Canada Emergency Wage Subsidy (CEWS): This is a temporary wage subsidy for employers. It will cover up to 75% of an employee’s salary on the first $58,700 earned – amounting to up to $847 a week. Funds will be retroactive to March 15. If able, employers can pay employees the remaining 25%. Employers whose revenues decrease by at least 30% in March, April or May of 2020 when compared to the same month in 2019 are eligible. The program would be in place for a 12-week period, from March 15 to June 6, 2020.
Temporary Wage Subsidy for Employers: Employers who do not qualify for the Canada Emergency Wage Subsidy may qualify for this program. It allows eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA). The subsidy is equal to 10% of the remuneration paid from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee and to a maximum of $25,000 total per employer.
Work-Sharing program: This is an adjustment program to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. The measure provides income support to employees eligible for Employment Insurance benefits who work a temporarily reduced work week while their employer recovers. Effective March 15, 2020 to March 14, 2021.
Tax payment deferred: The Canada Revenue Agency will allow all businesses to defer income tax payments until August 31, 2020, on payment owing on or after March18 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period
Deferral of HST Remittance and Customs Duty Payment: Businesses, including self-employed individuals, can defer until June 30, 2020 their remittances of the Harmonized Sales Tax (HST), as well as customs duties owing on their imports. The deferral will apply to GST/HST remittances for the February, March and April 2020 reporting periods for monthly filers; the January 1, 2020 through March 31, 2020 reporting period for quarterly filers; and for annual filers, the amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year. For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May.
Canada Emergency Response Benefit (CERB): This benefit would provide up to $500 a week for up to 16 weeks for workers who stop working as a result of the COVID-19 pandemic. Eligible applicants must have had an income of at least $5,000 in 2019 and are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period.
Agristability: An existing program under the Canadian Agricultural Partnership, AgriStability provides support when you experience a large margin decline. You will receive an AgriStability payment when your current year program margin falls below 70% of your reference margin. Program margin is defined as your allowable income minus your allowable expenses in a given year. Reference margin is your average program margin for three of the past five years
AgriInvest: AgriInvest is a self-managed producer-government savings account designed to help you manage small income declines and make investments to manage risk and improve market income. Each year, you can deposit up to 100% of your Allowable Net Sales to your AgriInvest account and receive a matching government contribution on 1% of your Allowable Net Sales. Your AgriInvest account grows as you make deposits, receive matching government contributions and earn interest. You can withdraw funds from your AgriInvest account any time.
AgriInsurance: AgriInsurance is a federal-provincial-producer cost-shared program that stabilizes a producer’s income by minimizing the economic effects of primarily production losses caused by severe but uncontrollable natural hazards. Producers get a payment when they experience a production loss during the year. This is a provincially delivered program.
AgriInnovate: This program provides repayable contributions for projects that aim to accelerate the commercialization, adoption and/or demonstration of innovative products, technologies, processes or services that increase agri-sector competitiveness and sustainability. Applicants may apply for program funding up to 50 percent of total eligible costs, to a maximum of $10 million. Applications will be taken on a continuous basis and Projects must be completed by March 31, 2023.
Sources: Government of Canada, Ontario Federation of Agriculture, Farm Credit Canada. As programs and details change over time, be sure to confirm with your local administrator.