Federal government announcements help hardest hit businesses

On November 30, 2020, we were pleased to hear the Honourable Minister Chystia Freeland, Deputy Prime Minister and Minister of Finance address some of the Coalition's recommendations in the Fall Economic Statement. This is the right step forward to help tourism businesses still in crisis due to COVID-19.

You can read the federal government's full statement on its website. An overview of requests from the Tourism Industry Association of Canada (TIAC) and the Coalition for the Hardest Hit businesses is summarized below.

Canada Emergency Wage Subsidy (CEWS)
TIAC and the Hardest Hit Coalition advocated for an increase to 85%.

Government has proposed:

• Raising the maximum wage subsidy rate to a maximum of 75% for the next three periods to mid-March 2021

Canada Emergency Rent Subsidy
This program provides direct and easy to access rent and mortgage support, allowing tenants to apply directly without going through landlords.

Government has proposed:

• Extension of the current subsidy rates for an additional three months, with a base subsidy rate of up to 65% available on eligible expenses until March 13, 2021

• Under the new lockdown support program, businesses who have had to shut their doors or restrict activities under a public health order are eligible for an additional 25% top-up for an additional three periods, until March 2021

• Meaning, hardest hit businesses can receive up to 90% support for rent

Liquidity
The fiscal update acknowledged that highly affected sectors like tourism and hospitality have struggled to access sufficient financing. The government has committed to working with financial institutions to offer loans on more generous terms.

Government has proposed:

• The introduction of the ‘Highly Affected Sectors Credit Availability Program’ (HASCAP)

Program for the hardest-hit businesses offering 100% government-guaranteed financing with low-interest loans of up to $1 million over extended terms, up to 10 years.

Rates will be lower than those offered in BCAP and beneath typical market rates for hard-hit sectors.

Applications will be through financial institutions - but will be a much more streamlined system than BCAP making it easier for businesses to apply and institutions to participate in the program

More details on the timing of the program and rollout to come soon.

Regional Relief and Recovery Fund
This has been a key support for the sector, supporting those unable to access other federal pandemic support programs.

Government has proposed:

• A top of $500 million to the Regional Relief and Recovery Fund, bringing the total funding to over $2 billion.

• Introduce a new approach to the West by creating a separate regional development agency, the 7^th, for British Columbia.

• Earmarking a minimum of 25% of total program funding for the tourism sector specifically, to support tourism businesses, providing more than $500 million in program support through to June 2021.

Canadian Emergency Business Account (CEBA)
The program deadline has been extended until March 31, 2021.

• Many tourism businesses struggled to access this program originally and went to the Regional Relief and Recovery Fund. CEBA has since introduced a $20,000 top-up. As part of the additional $500 million that will be earmarked for tourism, similar to the CEBA funding the government will ensure that all applicants have access to the additional $20,000.

Support for the Air Sector

Government has proposed:

• Commitment to ensuring Canadians are refunded for cancelled flights

• To provide up to $206 million over two years, starting in 2020-21, to the Regional Development Agencies for a new Regional Air Transportation Initiative.

• Additional funding to help with critical investments in health and safety infrastructure - $186 million over two years for the Airports Capital Assistance Program (ACAP).

• $500 million over six years to establish a new transfer payment program to support large airports in making critical investments in safety, security, and transit infrastructure. Transit projects will be eligible for funding.

• Additional $65 million to support airport authorities in 2021-22.

• Extending $229 million in additional rent relief to the 21 airport authorities that pay rent to the federal government. Made up of repayable and non-repayable rent relief, with non-repayable support costing $29 million over 4 years, starting 2020-21.

A Fair Tax System

Government has proposed:

• Fair taxation of short-term accommodation through digital platforms

• To improve GST/HST compliance, the government proposed to apply the GST/HST to all platform based short term rental accommodation supplied in Canada.

Festivals and Events

Government has proposed:

• Providing $181.5 million in 2021-22 to the Department of Canadian Heritage and the Canada Council for the Arts to expand funding programs.