COVID-19: Aid measures announced to support SMEs

April 8th, 2020

As important as it is for small and medium enterprises to plan for the eventual resumption of their activities, it is even more crucial that they remain afloat during the COVID-19 crisis. In recent days, the provincial and federal governments, as well as financial institutions and other organisations, have announced a number of support measures to help alleviate the economic impact of the crisis on businesses. What are they?

I. Provincial measures

1. Investissement Québec: Concerted Temporary Action Program for Businesses (PACTE)

Eligibility: Businesses, including cooperatives, non-profit organisations and other social economy enterprises engaged in business activities

Investissement Québec is offering financial support to offset cash flow shortages related to COVID-19 and stemming from either a product supply problem or the inability, or substantially decreased ability, to deliver products or services. This financial assistance is for a minimum amount of $50,000 and will be provided in the form of a loan or loan guarantee.

2. Emergency Support Plan for Small and Medium Enterprises

Eligibility: Businesses, including cooperatives, non-profit organisations and other social economy enterprises engaged in business activities. These businesses must have been in operation for at least one year and be temporarily closed or at risk of closure. They must not be currently in legal proceedings under the Companies' Creditors Arrangement Act or the Bankruptcy and Insolvency Act.

This program complements the PACTE and is aimed at eligible businesses that are impacted by the crisis and require less than $50,000 to supplement their working capital. Montréal and Québec City will receive $40 million and $10 million respectively. The other Regional County Municipalities (RCMs) and equivalent territories will share $100 million. The money provided by the government will be in the form of a loan or a loan guarantee.

In addition to the $10 million granted under this program, Québec City will inject an additional $7 million: $5 million in loans from the Fonds local d’investissement (FLI) to help businesses with online sales and shipments and $2 million in grants from the Fonds régions et ruralité (FRR) to support non-profit organisations and cooperatives.

On April 15, 2020, Québec City announced the creation of an additional $3 million grant fund to be put toward commercial street business associations and groups spontaneously formed to encourage people to buy local.

3. Flexibility for outstanding loans and loan guarantees

Eligibility: Businesses

A six-month moratorium has been put in place for the repayment (principal and interest) of loans already granted through the FLI. Interest accrued during this period will be added to the loan balance. This measure is in addition to the moratorium already in place under most RCM investment policies in effect; the latter can be as long as twelve months.

4. Extension of the tax filing deadline

Eligibility: Businesses

The payment of instalments and taxes that would be due as of today is suspended until July 31, 2020. Companies will be given a reasonable period of time to pay the amounts due.

5. Concerted Action Employment Maintenance Program (PACME-COVID-19)

Eligibility: Businesses, self-employed workers (incorporated or unincorporated) with employees, group promoters, cooperatives, social economy enterprises, non-profit organisations and community organizations with an active community presence, employer groups, worker groups and professional associations

The government is offering eligible companies a grant of up to $100,000 to cover 100% of the cost of training programs. 50% of eligible expenses between $100,000 and $500,000 may also be reimbursed. All paid hours for workers in training will be reimbursed, up to a maximum wage of $25 per hour per employee.

Projects will be accepted until September 30, 2020, or until the $100 million budget is exhausted.

II. Federal measures

1. Tax filing and payment deferrals

Eligibility: Businesses

Businesses will be able to defer income tax payments until August 31, 2020.

2. Wage subsidy for employees

Eligibility: Businesses, non-profit organizations and charitable organisations

A wage subsidy equal to 75% of employee remuneration will be available to businesses, non-profit organisations and charities that have experienced a 15% decrease in revenue due to COVID-19, retroactive to March 15, 2020. The subsidy will be available for the next 90 days. January and February 2020 can be used as a reference. This financial assistance will cover up to 75% of the first $58,700 of an employee's earned salary, up to a maximum of $847 per week.

Businesses that experience a revenue decline of less than 15% and are therefore not eligible for the 75% emergency wage subsidy may receive a temporary wage subsidy of 10% of remuneration paid from March 18, 2020 to June 19, 2020, up to a maximum of $1,375 per eligible employee and $25,000 per employer. 

For employers eligible for the 75% Canada Emergency Wage Subsidy and the 10% wage subsidy, any wage subsidy equal to 10% of wages will reduce the amount that can be claimed against the Canada Emergency Wage Subsidy during that same period.

3. Suspension of tax audits

Eligibility: SMEs

The Canada Revenue Agency has announced that it will not contact any small or medium enterprises to initiate any post assessment GST/HST or income tax audits for the next four weeks.

4. Business credit/loan programs

Eligibility: Businesses

The following programs existed prior to the COVID-19 crisis:

  • BDC Small Business Loan: providing loans of up to $100,000 to small businesses;
  • EDC Business Credit Availability Program: guarantees new operating credit and cash-flow term loans that financial institutions extend to SMEs.

The Business Credit Availability Program (BCAP) has been set up to give Canadian businesses access to over $65 billion in additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). This program includes:

  • The Canada Emergency Business Account;
  • Loan guarantees for SMEs;
  • The Co-Lending Program for SMEs.

Businesses can obtain loans of up to $40,000 to cover salaries, rent, insurance, utility and other operating costs. These programs will be put in place over the three-week period following March 27, 2020. Interested companies should contact their primary financial institution.

5. Assistance to tourism sector operators, small businesses and organisations

Eligibility: Operators, small businesses and organisations in the tourism sector

Regional Development Agencies (RDAs) can assist tourism operators, small businesses and organisations affected by COVID-19 to access to additional funding and more flexible financial arrangements.

6. Work-Sharing Program

Eligibility: Private or public companies or non-profit organisations that have been operating in Canada for at least one year and have at least two employees participating in work-sharing

The Government of Canada has put in place temporary special measures under the Work-Sharing Program to support employers and employees whose activities have slowed down. These measures allow employers to come to an agreement with employees to reduce their normal working hours. The employees will collect EI benefits to compensate for the lost earnings.

7. Business Credit Availability Program - Farm Credit Canada

Eligibility: Producers, agri-food businesses and food processors

Farm Credit Canada announced an additional $5 billion in lending capacity to assist producers, agri-food businesses and food processors.

8. Bank of Canada

On March 27, 2020, the Bank of Canada lowered its key interest rate to 0.25% to “support the Canadian financial system during the COVID-19 crisis”. The next scheduled update by the Bank of Canada will be April 15, 2020.

9. Canada Emergency Commercial Rent Assistance (CECRA)

Eligibility: SMEs, charities and non-profit organizations paying less than $50,000 per month in rent. These businesses must have temporarily suspended their activities or have experienced at least a 70% drop in revenues. 

Canadian small businesses affected by the pandemic will benefit from a 75% reduction in rent for the months of April, May and June. The federal government will cover 50% of this reduction, while landlords will cover 25%. The tenant will cover 25% of the rent. 

The aid measure is expected to be operational by mid-May and will be granted in the form of forgivable loans to owners of qualifying mortgaged commercial properties. The loan will be written off if the owners comply with the terms set out, i.e. if they agree to reduce the rent of the commercial tenants by at least 75% for the three months specified and do not evict the tenant during the period covered by the agreement.

CECRA loans will be forgiven if the property owner complies with all applicable program terms and conditions including to not seek to recover rent abatement amounts after the program is over.

More details will be available in the coming days.

III. Measures taken by various financial institutions

Some financial institutions have adopted specific measures to support their affected clients during this crisis period. These measures include: mortgage payment deferrals, relaxed credit terms and deferral of payments on other credit products.

We recommend that you contact your financial institution to see if such relief measures are available.

IV. Measures taken by various organisations

1. Hydro-Québec

Eligibility: Businesses and individuals

Hydro-Québec will not interrupt service in the coming weeks. The winter moratorium on service interruptions, which runs from December 1 to March 31, is being extended until further notice.

2. Alliance des cabinets en relations publiques du Québec (ACRPQ)

Eligibility: SMEs and non-profit organisations

ACRPQ member firms are offering assistance to non-profit organisations and SMEs that do not have a dedicated communications resource and have no prior relationship with an advisor or a public relations or communications firm. A 30-minute pro bono phone consultation will be offered. A guidance document, including a draft internal memo, is available at

3. Quebec Employers’ Council

Eligibility: Businesses

The QEC is making its human resources management service available to companies, free of charge, for specific interventions.

4. Montréal inc. and Bonjour Startup

Eligibility: Businesses (startups) in Montréal

Montréal inc. and Bonjour Startup Montréal have launched a solidarity initiative and organized a team of coaches to offer both moral support and remote crisis management support, free of charge, to Montréal startups.

5. Fondaction

Eligibility: Businesses

Fondaction has announced that all the businesses that it finances directly will be allowed to defer their loan payments, including principal and interest, for a period of three months.

6. Fonds de solidarité FTQ

Eligibility: Businesses

The Fund is offering all the companies in its portfolio a six-month deferral of loan payments, including principal and interest.

7. Deferral of property tax payments in several Quebec municipalities

Several municipalities have announced measures such as the deferral of property tax payments. Montréal postponed the next payment to July 2, 2020, while Québec City postponed it to August 4, 2020. For more information on paying your property taxes, we recommend that you check your municipality's website.

Written in collaboration with Raphaëlle Renzo-Gaudet, articling student