The Canadian economy remains strong and the Prime Minister has announced economic measures to help stabilise the economy, with billions of dollars being provided in direct support to Canadian workers and businesses. This includes a plan to mobilise industry in the fight against COVID-19, employee wage subsidies, interest free loans for businesses, and deferral of GST/HST payments as well as duty and taxes owed on imports (until June 2020). These measures are outlined below:
Canadian Economic Relief Measures (as of 24 April 2020)
Passed on 25 March and called Bill C-13
Bill C-13 is a CAN$107 billion emergency stimulus package - $52 billion in direct support for individuals and companies and $55 billion in temporary tax deferrals for households and businesses.
Includes a number of measures to give businesses access to capital and other liquidity support measures called the Business Credit Availability Program – equivalent to the U. S. SBA and offered by Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Measures involve:
Wage Subsidy - Canadian Emergency Wage Subsidy (CEWS) – employers who suffer a drop in revenues of at least 30% may qualify for a 75% wage subsidy for their employees. It they don't qualify for this then may still qualify for a 10% subsidy. This may be relevant for New Zealand businesses in-market who have hired Canadian employees.
Loan guarantees and co-lending programs – in partnership with Canada's major banks for SMEs. Includes access to credit for payroll, operational costs, and working capital loans.
Industry-specific measures - relating to agribusiness, fisheries, aquaculture, the airline sector, the oil and gas sector, the cultural sector, entrepreneurial and industrial research, and rural employers.
Rent assistance - for SMEs through the Canada Emergency Commercial Rent Assistance (CECRA) program. The program provides loans, including forgivable loans, to commercial property owners which get passed on. This may be relevant for our New Zealand businesses in-market who are leasing space.
Deferral of taxes and import duty - until June 30. Relevant for any in-market New Zealand company importing goods from New Zealand or the US (for instance) .
Bank of Canada has dropped prime interest rate - making credit more affordable and available. The Bank is also coordinating its actions with international banks. However, there is some concern in Canada that rate drops have not been passed on by Canada's major banks who are instead keeping a healthy margin in case of future loan defaults.
New smaller measures being added daily - in the $1-2 billion range, for students, indigenous groups and other who are unable to take advantage of the larger measures.
Despite the above measures some small businesses in Canada are could run the risk of bankruptcy, and according to NZTE's Canadian Beachhead Advisor could be prime targets for acquisition by NZ companies who wish to gain a foothold in Canada.