Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.
Canada’s Third Wave of COVID-19 Fueled By New Variants
The country is battling a surge of COVID-19 infections due to new variants that are affecting more younger adults than before.
Last Saturday, Canada surpassed the 1-million mark in COVID-19 cases. This third wave mainly struck Ontario, British Columbia, and Quebec.
$925M Funding for Vaccine Facility in Toronto
A total of $925 million in vaccine funding have been announced to expand Canada’s vaccine manufacturing capacity in Toronto. The federal government will spend $415 million, Ontario’s government will contribute $55 million, and Sanofi will spend more than $455 million for the project.
This funding will build an end-to-end vaccine manufacturing facility and is expected to create some 300 high-quality jobs in Toronto.
Canadian Economic Growth Beats Expectations
The country’s economy grew 0.7% in January in the face of strict COVID-19 restrictions, beating expectations. It also appears to have grown almost as much in February.
This marks the ninth consecutive monthly increase since the decline last year when the pandemic started. However, total economic activity was still about 3% below the February 2020 level.
Government Extends Access to COVID-19 Benefits
Minister Carla Qualtrough announced the government’s intent to introduce amendments to increase the number of weeks of benefits available for the Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB), the Canada Recovery Caregiving Benefit (CRCB) and Employment Insurance (EI) regular benefits.
The proposed changes include:
- increase the number of weeks available under the Canada Recovery Benefit (CRB) and the Canada Recovery Caregiving Benefit (CRCB) by 12 weeks extending the maximum duration of the benefits through regulation from 26 weeks to up to 38 weeks;
- increase the number of weeks available under the Canada Recovery Sickness Benefit (CRSB) through regulation from the current 2 weeks to 4 weeks; and
- increase the number of weeks of EI regular benefits available by up to 24 weeks to a maximum of 50 weeks through legislation, for claims that are made between September 27, 2020 and September 25, 2021.
More information can be found here.
HASCAP Loan Applications Now Open
Loan applications for the Highly Affected Sectors Credit Availability Program (HASCAP) have opened.
Loans start at between $25,000 and $1 million for a single business depending on the size of the operation, and run up to $6.25 million for companies with multiple locations like a chain of hotels or restaurants. Interest rates are set at 4% across the board, terms will be up to 10 years, with up to a 12-month postponement of principal payments at the start of the loan.
To be eligible, companies will have to show a year-over-year revenue drop of at least 50% over three months, not necessarily consecutive, in the eight months before the application.
Further details can be found here.
Canada Emergency Business Account Deadline Extended
Eligible businesses facing financial difficulties due to COVID-19 can access a second CEBA loan of up to $60,000 with up to $20,000 of that being forgivable.
CEBA has two streams of eligibility: the Payroll stream and the Non-Deferrable Expense stream. If you previously received a loan of up to $40,000, you can apply for the CEBA expansion to increase your loan by an additional $20,000 ($10,000 of which is forgivable if repaid before Dec 31, 2022).
Applications for CEBA have been extended to June 30, 2021. More information can be found here. Alternatively, if you have any questions or require assistance, simply send us a message.
Government Support for Businesses
The federal government continues to enact measures to mitigate the financial impact of the pandemic. Here is an overview of the assistance you may be able to take advantage of:
- The Canada Emergency Wage Subsidy (CEWS) is intended to help businesses cover a portion of wages and keep employees on payroll. It continues until June 2021.
- The work-sharing program allows employees whose hours got reduced by an average of 10% to 60% to claim employment insurance for lost wages. This has been extended to 76 weeks from 38.
- The Canada Emergency Rent Subsidy provides rent and mortgage assistance until June 2021. Businesses can make claims retroactively for the period of Sept. 27 to Oct. 24, 2020.
- The Canada Emergency Business Account (CEBA) offers government-guaranteed bank loans of up to $40,000 for small businesses. The deadline for the application has been extended to March 31, 2021.
- For mid-sized companies, the Business Development Bank of Canada’s mid-market financing program provides commercial loans between $12.5 million and $60 million.
Upcoming Key Dates
Below are the upcoming key payment and filing dates to take note of:
- Your tax return for 2020 has to be filed on or before 30 April 2021.
- For self-employed individuals, if you or your spouse or common-law partner carried on a business in 2020, your return for 2020 has to be filed by 15 June 2021. However, if you have a balance owing for 2020, you have to pay it on or before 30 April 2021.
Five Startup Killers To Avoid
If you want your new business to succeed, you need to make smart decisions and be strategic. In this Forbes article, a business coach shared five business killers that you should avoid if you want your startup to be successful.
- Too much overhead– Start with the bare necessities and focus on surviving your first year in business. By keeping your business lean in the early stages, you may have a positive cash flow.
- Limited cash flow– The main reason new businesses have to close is because they don’t have enough money. Avoid making significant cash purchases and use other financing options so you can have sufficient cash in your bank.
- Too much planning– Don’t overwhelm yourself with all the little details because there will always be little details.
- Too little planning– While it’s better to start with version one than never start at all, this doesn’t mean you shouldn’t plan at all. You need to have a business plan, including processes and systems in place in order to succeed.
- Not getting involved in the community– If you’re not networking within your community, you’ll be missing out on vital business connections. Your website and social media are great, but you may also need people in your community to establish your credibility when you’re just starting out.
Need more focused business advice for your startup? Get in touch with us today and let’s work out a plan together!
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