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Bill Morneau

Feds expand access to small business loans; in talks on commercial rent relief, U.S. border controls

Thursday, April 16, 2020 @ 3:12 PM | By Cristin Schmitz

Ottawa has expanded eligibility for its new interest-free $40,000 loans for businesses hit by COVID-19 and is in talks with the provinces to create a new loan program for commercial landlords that would enable them to forgo or lower rents for struggling businesses from April through June 2020.

At their daily COVID-19 briefing on April 16, top federal officials also acknowledged that Ottawa has been, for the past couple of days, engaging, according to Deputy Prime Minister Chrystia Freeland, in “very constructive and productive conversations” with American officials about the two neighbours’ ongoing mutual COVID-19 restrictions, which bar non-essential travel across the Canada-U.S. border.

Prime Minister Justin Trudeau

“Canada believes the right thing to do would be to extend those border restrictions,” Freeland said when asked to comment on U.S. President Donald Trump’s statement April 15 that Canada “will be one of the early borders to be released.”

Asked by a reporter whether she can guarantee that Canada won’t open its border to non-essential travel by Americans “until it is absolutely safe to do so,” Freeland replied “what I guarantee is decisions about Canada’s border are taken by Canadians, full stop. And when it comes to easing border restrictions of all kinds, our government will only do that when it is appropriate, and when it is not a risk to the health and safety of Canadians.”

She said Canada’s relationship with the U.S. during the pandemic, and specifically with respect to the border, has been “extremely friendly, extremely neighbourly and extremely effective.”

Earlier in the day, Prime Minister Justin Trudeau announced in his daily briefing the expansion of the Canada Emergency Business Account (CEBA) to businesses that had a payroll in 2019 between $20,000 and $1.5 million. That new range will replace the previous eligibility requirement of a payroll between $50,000 and $1 million.

Trudeau noted that financial institutions have already approved more than 195,000 government-guaranteed, partially forgivable loans of up to $40,000 each since the CEBA launched April 9, 2020 — totaling so far more than $7.5 billion in credit to small businesses. 

Finance Minister Bill Morneau

Trudeau also announced that the federal government intends to create a Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses — however its launch awaits the outcome of ongoing discussions with the provinces. Trudeau told reporters he will have more details to share “very soon.”

A press release from the Prime Minister’s Office (PMO) elaborated that the program “will seek to provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), May, and June.” 

The PMO stipulated that “implementation of the program will require a partnership between the federal government and provincial and territorial governments, which are responsible for property owner-tenant relationships. We are working with the provinces and territories to increase rent support for businesses that are most impacted by the pandemic and we will have more details to share soon.”

Federal Finance Minister Bill Morneau said in a statement, “we will continue to do whatever it takes to ensure that Canadians are supported through the outbreak, and that our economy remains resilient during these challenging times.”

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