Introduction of the Canada Emergency Business Account (CEBA)

The Canada Emergency Business Account provides interest-free loans of up to $40,000 to small businesses and not-for-profits, to help them cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus. To qualify for this program, these organizations will need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25%. The program will be implemented by banks and credit unions in collaboration with Export Development Canada. Sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll are also eligible for the CEBA after the expansion of the eligibility criteria in May 19, 2020. To qualify under the expanded eligibility criteria, applicants must have payroll lower than $20,000 and will need to demonstrate that they have:

• a business operating account at a participating financial institution
• a Canada Revenue Agency business number and have filed a 2018 or 2019 tax return.
• eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. PBO estimates this program to cost $9.335 billion in 2020-2021. The time horizon for this costing is aligned to PBO’s current Economic and Fiscal Scenario.