The federal government announced a $600-million extension to its Regional Relief and Recovery Fund to support small and medium-sized businesses on Friday as entrepreneurs wait for updates to Ottawa’s larger pandemic rent-relief and wage-subsidy initiatives.
The program was designed to give small and medium-sized businesses financial support through partly forgivable loans if they were ineligible for the larger programs, such as Canada Emergency Business Account (CEBA) loans or Canada Emergency Commercial Rent Assistance (CECRA) funding. Businesses can apply for the program through local offices of federal regional development agencies, such as the Atlantic Canada Opportunities Agency and Western Economic Diversification Canada.
A spokesperson for Economic Development Minister Mélanie Joly said on Friday that the initial $962-million for the program had been spent in most regions and had assisted 12,000 small and medium-sized businesses.
“Every time you extend the social safety net, you really need to make it tighter to make sure no one falls through the cracks,” Ms. Joly said at a press conference in Ottawa on Friday.
The Regional Relief and Recovery Fund primarily offers interest-free loans of up to $40,000 that can become one-quarter forgivable if a business meets repayment terms, similar to CEBA. Larger loans are also available for some businesses, but not necessarily forgivable. Grants are available to not-for-profits.
Small businesses often have thin profit margins and were immediately put in precarious positions as revenue collapsed when pandemic shutdowns began in March. But for many entrepreneurs, the summer’s gradual economic reopening did not mean a return to regular revenue, let alone compensate for revenue lost during the pandemic’s early months.
The threat of further shutdowns looms with the coming winter. In Quebec, bars and restaurants are already shut down for much of October, although they’ve been offered additional financial support from the provincial government as it tries to battle rising COVID-19 infection numbers. Small businesses have been clamouring for additional federal support, with many worried whole swaths of the economy could be lost; the Canadian Chamber of Commerce has warned that 60 per cent of the country’s restaurants could shut down permanently by November.
In its Throne Speech last week, the federal government signalled it would extend its wage subsidy through next summer and expand the CEBA loan program to better assist entrepreneurs with fixed costs – including rent, as it winds down its CECRA program.
The rent program was widely criticized because it required the landlords to apply, leaving many tenants powerless over whether they received rent support. As of Sept. 28, Ottawa said only $1.68-billion had been spent of the $2.97-billion earmarked for the joint federal-provincial initiative. That program expired on Wednesday, leaving thousands of entrepreneurs with no rent support just as COVID-19 cases began spiking in regions across the country.
Ms. Joly’s office said that nearly 95,000 jobs across Canada had been supported by the Regional Relief and Recovery Fund’s initial financing.
Of the new $600-million, $184-million will flow through the Federal Economic Development Agency for Southern Ontario, and $22.3-million will be disbursed by the Federal Economic Development Initiative for Northern Ontario. Canada Economic Development for Quebec Regions will receive a top-up of $69.8-million.
Western Canada will receive an additional $263.7-million from the fund’s extension, while the Atlantic region will receive $60.2-million.
The Canadian Northern Economic Development Agency did not receive additional funding as it had funds remaining from the program launch.
Among the five regions receiving new support from the program, $144-million will be disbursed by the Community Futures Development Corporations to rural businesses.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.