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Quebec Response Team:COVID-19/Business Continuity

Government initiatives updateVersion 9: Tuesday June 16th, 2020 – 10:00AM

CAUTIONThe information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

New Government Initiatives 3

Timeline – Development of Important Government Measures 4

Overview – Government Initiatives 5

Government of Quebec 7

Government of Canada 26

Available Assistance Programs 65

Sources and Useful Links 67

Response Team Leaders 68

Table of Contents

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Version 9: June 16th 2020

This page is current as of

© 2020 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

New Government Initiatives

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurateand timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act onsuch information without appropriate professional advice after a thorough examination of the particular situation.

The Government of Quebec, the Government of Canada, municipalities and several departments and agencies have taken important steps to assist families,employees and businesses whose cash flow is affected by the impact of COVID-19.

New measures, new programs and additional details since the last update:

Government of Quebec- Cultural Recovery Plan- Support for Montreal businesses- Emergency Commercial Rent Assistance- Flexibility regarding filing and payment deadlines

Government of Canada- New flexible measures for the CEWS- Wage supports to universities and health research institutes- Flexibility regarding filing and payment deadlines- Emergency Processing Fund (EPF) *** TIME SENSITIVE ***

Bill C-17 among other things, enacts the Time Limits and Other Periods Act (COVID-19), amends the Tax Act to revise the eligibility criteria for the CEWSand amends the CERB Act. This bill was presented and received first reading on June 10th, 2020 and is expected to be debated this week. As a result we areexpecting clarifications of the following:

- Extension of the Canada Emergency Wage Subsidy (CEWS) and related specifications- Extension of the Canada Emergency Response Benefit (CERB) and related specifications

Note that new/changes to measures since our last edition are highlighted in GREENyour review. throughout this document to facilitate

June 16th 2020

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Timeline - Development of Important Governmental Measures

March 12thKPMG employees work from home

January 25th

March 24thNon-essential services closures

March 18thCanada’s COVID-19 Economic Response Plan ($27B) & fiscal carryovers ($55B)

March 19thBDC programs

March 27thWage Subsidy announced ($73B) and EDC’s BCAP

April 11thWage Subsidy ENACTED through bill C-14

March 19thQuebec government’s PACTE ($2.5B) & fiscal carryovers ($8.3B)

Today

April 3rdQuebec FLI ($150M)

March 25thCERB announced and bill C-13 ENACTED

January 25thFirst COVID-19 case in Canada

June 8th,2020

May 15th12-week extension of the CEWS

April 16thCanada Emergency Commercial Rent Assistance (CECRA) for small businesses announced

April 6thPACME is announced (100M$)

May 11thCanada Enterprise Emergency Funding Corporation (CEEFC), and the EDC BDC loan guarantee middle market program announced

May 15thEnhancement of PACME (+ $50M)

June 8thCECRA enhancement

May 25thLaunch of the CECRA portal

May 27thClosure of the “voletEntreprise” of PACME

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Overview – Government InitiativesThe governmental programs listed below are available to businesses whose cash flow is affected by the impact of COVID-19

Who to contact?

Type of business

PACTE

Clients: InvestissementQuébec (IQ)

Non-clients: Financialinstitution

All1

PACME

Emploi Québec (MTESS)

All

Type of financial assistance

Interest bearing loan or loan guarantee Grant

Authorized amount Over $50K- 100% of expenses of

$100K or less- 50% of expenses in

excess of $100K

Deadline/periodCase by case, established by the financial institution and IQ

Projects will be accepted until September 30, 2020 or until the $150 million budget is allocated

Notes $150 million budget

PACTE – SMB

Quebec Portal or RCM

SMB and NPO

Interest bearing loan

Less than $50K

Case by case, established by the financial institution and IQ

$150 million budget

1 Refer to the respective section of the document for sectors of activities that are not eligible to the program.2 Refer to the CED website to see all businesses eligible to this profile.3 In the case of NPOs (non-profit projects), the contribution is non-repayable

ConditionsCase by case, established by the financial institution and IQ

Max $300K per enterprise

Case by case, established by the financial institution and IQ

Click on the program for more details

May 26th 2020

RRRFProfile 2

For Quebec enterprises: Canada Economic Development for Quebec Regions (CED)Elsewhere in Canada: refer to your respective Regional Development Agency (RDA)

Businesses with revenues less than $250K operating in the manufacturing and value-added services industries2

Financing of less than $40K

If 75% of the contribution is repaid by December 31, 2022 (based on a pre-determined repayment schedule), the remaining 25% becomes non-repayable

RRRFProfile 1

Businesses with revenues of $250K and more operating in the manufacturing and value-added services industries2

Repayable loan

Financing of more than $40K

Repayable over a five-year period (based on a pre-determined repayment schedule), starting January 1, 2023

$211 million budget for Quebec regions$962 million total budget

Case by case

FADQ – Loan guarantee

Fédération agricole du Québec (FADQ)

Agricultural and agri-food businesses

Loan guarantee

Up to $50K

Ten-year repayment term and 12-month capital payment relief

Case by case, established by the FADQ

Repayable or non-repayable loan, depending on the type of business3

Case by case

GOUVERNMENT OF QUEBEC GOVERNMENT OF CANADA

https://dec.canada.ca/eng/programs/regi/coronavirus-rrrf/index.html

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Overview – Government Initiatives (continued)The governmental programs listed below are available to businesses whose cash flow is affected by the impact of COVID-19

Who to contact?

Type of business

BDC – Lending program (SME)

EDC – Loan guarantee (SME)

Financial institution

Type of financial

assistance


Authorized amount

Deadline/period

Up to $6.25M (80% BDC and 20% financial institution)1


Loan guarantee

80% on a maximum amount of $6.25M

Case by case, established by the financial institution


All All

EDC –Emergency

account (CEBA)


Interest free loan

Up to $40K

25% Loan forgiveness (up to $10K) if repaid by December 31, 2022

SME and NPO

Notes $20 billion budget $20 billion budget

- Total payroll paid in 2019 is between $20K and $1.5M

- $25 billion budget

BDC – Working Capital Loan

BDC


Up to $2M

36 months including the 12 month capital extension

All

Temporary wage subsidy

BDC Capital

Convertible notes

Equivalent to those committed by existing vendors or new qualified investors

36 months

Canadian start-ups

Criteria:- Raised

>500K$ in external capital

- Backed by qualified VC firm

Canada Emergency

Wage Subsidy (CEWS)

BDC Capital –Bridge Program

No application is required

SME

Grant

10% of the remuneration paid; maximum of $1,375/eligible employee & max. $25K/employer

Available from March to June 19, 2020

- Reduce withholding tax remittance

- No specific eligibility criteria

Canada Revenue Agency (CRA) via My Business Account portal

Grant

75% of the remuneration paid; maximum of $847 a week/per employee

From March 15, 2020 until August 29, 2020

All except public bodies

- Qualifying revenue decrease3

- Retroactive application possible

1 Refer to BDC section of the document for the three components of the program to support business of different sizes.2 Loans would only accrue interest for the first 12 months, with a 10-year repayment period. 3 Refer to the respective section of the document for more information on qualifying revenue decrease.4 ISBT = impacted small business tenants.5 Except for those in the financial sector.

ConditionsCase by case, established by the financial institution2


Interest free Base rate (BDC) Base rate (BDC) + 4%Considered as taxable income

Click on the program for more details

Considered as taxable income

BDC – Lending program (Middle

market)



Between $12.5M$ and $60M


All

For business with more than $100M in annual revenues

Case by case, established by the financial institution2

EDC – Loan guarantee

(Middle market)


Loan guarantee

75% on a amount between $16.75M and $80M


All

In general, for businesses with annual revenues between $50M and $300M


CECRA for small

businesses

Large Employer Emergency Financing

Facility (LEEFF)

Canada Mortgage and Housing Corporation (CECRA)

ISBT4

Forgivable loan

Up to 50% of the monthly gross rent (of no more than $50K)

For the months of April, May and June 2020

- Revenue decline of at least 70% (tenant)3

- Gross annual revenues (tenant) < 20M$

Reduction of the gross rent by at least 75%

Canada Development Investment Corporation (CDEV)

Large Canadian enterprises5


$60M and more

- Unsecured facility: 5 years

- Secured facility: case by case

For enterprises that can generally demonstrate approximately $300M or more in annual revenues

Unsecured loan facility (80%) and secured loan facility (20%)

May 26th 2020

GOVERNEMENT OF CANADA

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Government of Quebec

Government initiatives regarding COVID-19

Categories Announced measures Additional details

Concerted temporary action program for businesses (PACTE)

(included in the ESSOR program)

● This funding program is targeted at companies whose cash flow is affected by the impact of COVID-19 and needing a minimum funding of $50,000.

● This financial assistance is available to businesses operating in Québec, including cooperatives and other social economy enterprises with commercial activities. Eligible businesses are those that find themselves in a precarious situation and temporary difficulty as a result of COVID-19. They must show that their financial structure offers realistic prospects for profitability.

Eligible Projects:Businesses must show that their cash flow issues are temporary and that the liquidity shortage stems from: ● A problem involving the supply of raw materials or products

(goods or services)● An inability, or a substantially decreased ability, to deliver

goods, products or services.

Applications will be reviewed on a case-by-case basis, according to the business’ circumstances and Investissement Québec’s management practices.

Funding details: ● A loan guarantee is the preferred form of financing. Financing

can also take the form of a loan from Investissement Québec.

● Businesses in all industries are eligible to this program, certain exceptions apply (see next column).

All industries are eligible, except for the following:

● Weapons manufacturing or distribution● Games of chance and gambling, combat sports, racing and other

similar activities● Production and sale of tobacco and drugs along with services

related to their use, except for projects involving pharmaceutical-grade products approved by Health Canada and having a DIN, or their ingredients, as well as R&D projects licensed by Health Canada

● Any activity whose main purpose is protected by the Canadian Charter of Rights and Freedoms (religion, politics, human rights advocacy, etc.)

● Any other activity that may offend public morals.

Investissement Québec aims to work in close cooperation with financial institutions and federal authorities (BDC/EDC) in order to share risks ● The minimum funding amount is $50,000; ● Refinancing is prohibited;● This measure is designed to shore up the business’s working

capital.

How it works:Existing IQ clients: contact the account manager by email or telephone.

Non-client businesses: to obtain a loan guarantee, contact the financial institution, which will then be able to contact one of the IQ account managers.

Support for Businesses

April 17th,2020

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Government of Quebec (continued)



Emergency assistance forsmall and medium-sized businesses

The Emergency Assistance Program for Small and Medium-Sized Businesses aims to support, for a limited period, eligible businesses who are experiencing financial difficulties due to COVID-19 and who need up to $ 50,000.

● This is in addition to the Concerted temporary action program for businesses (PACTE).

● To help businesses, the he Government of Quebec is making available an initial amount of $150 million to the RCMs and territories. The cities of Montreal and Quebec will each receive $40 million and $10 million respectively, of the allocated $150 million. The other RCMs and equivalent territories will share the remaining $100 million.

● An additional $100 million has been added to the program’s budget on June 9, 2020 (including $20 million intended for Montreal small businesses – see related section).

● Assistance will be provided as a loan or loan guarantee of up to $50,000 to address the liquidity shortfall due to COVID-19.

To qualify, the business must:

● have been in operation in Quebec for at least one year;

● be temporarily closed, be likely to close or showing signs of closing;

● be in a context of maintaining, consolidating or reviving its activities;

● have demonstrated a causal link between its financial or operational problems and the COVID-19 pandemic.

Excluded are applicants who are subject to the protection of the Companies’ Creditors Arrangement Act (RSC, 1985, Chapter 36) or the Bankruptcy and Insolvency Act (CRL, 1985, Chapter B-3).

To apply:

● For information about the Emergency Assistance Program for Small and Medium-Sized Businesses, contact your RCM, your municipality’s office or the organization responsible for managing the Fonds local d'investissement (FLI) in your RCM.

● Details of the measures are set out on the government website.


May 20th,2020

https://www.quebec.ca/entreprises-et-travailleurs-autonomes/aide-urgence-pme-covid-19/

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Temporary exemption for companies modifying their production in an effort to combat COVID-19

● Program aiming to streamline procedures for companies wishing to convert their operations in an effort to combatCOVID-19.

● In order to meet an increasing and urgent demand, particularly in the health and social services sector, the Government of Quebec will exempt businesses that temporarily modify an operation (for example, increasing production) or add an operation (for example, designing new products) in connection with the fight against COVID-19. As a result, these companies will not need to obtain prior authorization from the Ministère de l’Environnement et de la Lutte contre les changements climatiques, which will alleviate the procedures for temporarily converting their operations.

● In order to benefit from this exemption, the business will have to notify the Ministère de l’Environnement et de la Lutte contre les changements climatiques, as indicated on its website. The exemption will be valid upon receipt of the Ministère’s response, which will be sent within 48 hours of receiving the required information.

● For more information on the measure, consult the following government website: http://www.environnement.gouv.qc.ca/autorisations/exemption/


April 17th,2020

http://www.environnement.gouv.qc.ca/autorisations/exemption/

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Outstanding loans and guarantees

● Loan flexibility measures already provided by Investissement Québec can be implemented.

● This is not an automatic measure. A request must therefore be made specifically to benefit from the flexibility measures.

● Local investment funds (Fonds locaux d’investissement, or “FLI”): a three (3) month moratorium was introduced for the repayment (principal and interest) of loans already granted.

● Two-year extension of the FLI, i.e. until December 31, 2022.

● Interest earned during this period will be added to the loan balance. This is in addition to the moratorium already in place under most of the investment policies in force in the RCMs, which can reach twelve months.

Municipal World: local measures

● Several municipalities have announced measures such as: deferral of payment of property taxes, deferral of payment of property transfer fees, grants, loans, etc.

● For more information, visit the respective municipal websites.

CNESST is implementing exceptional flexibility measures for businesses. More specifically:● Employers have until August 31, 2020 to pay their Statement of Account

related to the CNESST contribution. In addition, no penalty or interest will be charged during this period.

● The deadline for submitting the 2019 statement of wages is extended. Employers have until June 1, 2020 to submit it.

● There will be tolerance in the application of time limits for the filing of complaints, for example for the transmission of documents necessary for an investigation.

● Frequently visit the CNESST website or subscribe to the organization’s press releases via the following website:

● Québec.ca > Information feed

● Québec.ca > Information feed > Mesuresd'assouplissement de la CNESST pour les employeurs et les travailleurs dans le contexte de la COVID-19


April 17th,2020

http://www.fil-information.gouv.qc.ca/Pages/Articles.aspx?lang=enhttp://www.fil-information.gouv.qc.ca/Pages/Article.aspx?Page=2&idArticle=2803209330

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Financièreagricole du Québec (FADQ)

FINANCING MEASUREThe FADQ is implementing measures for businesses in the agriculture and agri-food sector, including: ● A 6-month moratorium on loan repayment is available to all FADQ

clients who apply for it. This period of payment holiday will reduce corporate obligations and provide liquidity for the coming months.

● A loan guarantee of up to $50,000, free of personal property or real estate property guarantee, may be granted by the FADQ in order to support cash flow needs. This measure is available to any FADQ financing client with temporary cash flow issues due to the COVID-19 pandemic.

● Frequently visit the FADQ’s website or subscribe to their press releases here:

● Québec.ca > Information feed

● Québec.ca > Information feed > La Financière agricole du Québec met en place de nouvelles mesures pour accompagner les producteurs agricoles

● https://www.fadq.qc.ca/en/news-room/news/details/2020-growing-season-la-financiere-agricole-ensures-fruit-and-vegetable-producers-that-it-will-adjus-1/


May 20th,2020

http://www.fil-information.gouv.qc.ca/Pages/Articles.aspx?lang=enhttp://www.fil-information.gouv.qc.ca/Pages/Article.aspx?idArticle=2803211394

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Financièreagricole du Québec (FADQ)

Insurance and Income Protection Measures

Crop Insurance Program (ASREC)● The enrolment date is extended from April 30 to May 21, 2020.● Notices of assessment are deferred from June 1 to July 1, 2020.● For market garden crops, seeding cut-off dates are deferred.

AgriStability● The deadline to apply and make a contribution payments is postponed

to July 3, 2020. This program covers margin drops due to a major loss of income or increase in production expenses. Given the current circumstances, the period to enroll is postponed from April 30 to July 3, 2020. The payment of contributions to the program is also postponed to July 3, 2020.

● Interim payments increase from 50% to 75% of program benefits. With interim payments, farmers can receive a portion of their program benefits faster. To apply, producers must contact the Financial Information Collection and Processing Team.

Farm Income Stabilization Insurance Program (ASRA)● No notice of assessment will be sent before July 1.● Final payments for the 2019 insurance year will be made in April for

the cattle and hog sectors and in May for the sheep sector, as scheduled.

● The second advance for cereal and canola compensations will be paid in April.

● Frequently visit the FADQ’s website or subscribe to their press releases here.


May 20th,2020

https://www.fadq.qc.ca/en/news-room/news/details/covid-19-measures-announced-for-producers/http://www.fil-information.gouv.qc.ca/Pages/Articles.aspx?lang=en

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Support for BusinessesCategories Announced measures Additional details How to benefit

Concerted Action Program for Maintaining Employment(PACME-COVID-19)

The program offers direct financial support to promote training and for the implementation of good practices in human resource management, as well as the optimization of the operation of businesses and the labor market.

Eligible businesses have to had their usual activities suspended, reduced, increased or diversified as a result of the COVID-19 pandemic.

● The program provides a 100% reimbursement for eligible expenses incurred, for example, professional trainer fees, equipment purchase, and human resources management activities.

● The PACME reimburses 100% of eligible expenditures of $100,000 and less and 50% of expenses between $100,000 and $500,000.

Eligible expenses include:● reimbursement of wages (excluding payroll taxes, maximum allowable

salary of $25 per hour), up to: o 25% of the payroll of workers during eligible training, if the company

receives Canada’s emergency wage subsidy of 75%;o 90% of the payroll of workers during eligible training, if the company

receives Canada’s temporary wage subsidy of 10%;o 100% of workers’ wages during eligible training, if the company does

not receive any federal wage subsidy.

● reimbursement of up to 100% of eligible training expenses, related costs and costs related to human resources management activities, according to the applicable scales (e.g. professional fees).

Eligible training activities include:o Basic employee trainingo Francizationo Digital skills trainingo Continuing education related to the business’ activities (whether or not

directly related to the trained employee’s position)o Training recommended by a professional associationo Training necessary to resume business activitieso Training related to a strategic adjustment or modification of the

business’ activities to maintain or diversify the activities in light of the economic uncertainty due to COVID-19 (e.g. health, telecommuting)

o Training for the requalification of workers.

● The program is effective starting April 6, 2020 and will expire on September 30, 2020, or until the $150 million budget is exhausted.

● Businesses and self-employed persons must apply by contacting their local employment center.

● For more information on this new program, please visit the Government’s website.

May 15th,2020

The “volet Entreprises” of PACME has reached its maximum financial capacity. It is therefore no longer possible to apply for this component of the program.

https://www.mtess.gouv.qc.ca/services-en-ligne/centres-locaux-emploi/localisateur/index_en.asphttps://www.quebec.ca/entreprises-et-travailleurs-autonomes/programme-actions-concertees-pour-le-maintien-en-emploi-pacme-covid-19/#c50703

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Support for BusinessesCategories Announced measures Additional details How to benefit

Credit forcontributionsto the Health Services Fund (HSF)

The amount of the credit for contributions to the HSF will be equal to the amount of contribution to the HSF paid by an employer with respect to the wages paid to an employee on paid leave during a week included in the period beginning on March 15, 2020 and ending on June 6, 2020.

This measure is in effect retroactive to March 15, 2020.

An employer who may benefit from the CEWS and maintains an establishment in Quebec may benefit from the credit for contributions to the HSF.

Reduction of periodic payments of the contribution to the HSFAn employer may reduce the periodic payments of the contribution to the HSF that it is required to remit to Revenue Quebec after April 30, 2020, by the amount of the credit for contributions to the HSF attributable to the salary or wages paid to an employee on paid leave before the periodic payment deadline and that has not reduced another periodic payment.

Reduction of the contribution to the HSF for the creation of specialized jobsWhere an employer could benefit, for the year 2020, from the credit on employers contribution to the HSF and the reduction in the contribution to the HSF for the creation of specialized jobs, the qualified wage for the purpose of the reduction to the contribution to the HSF for the creation of specialized jobs must be reduced by an amount equal to the specified wage paid to such an employee.

● The application for the credit on employers contribution to the HSF must be submitted to Revenue Quebec when the employer submits the Summary of Source Deductions and Employer Contributions for 2020 (RLZ-1.S-V and RLZ-1.ST-V)

● The application must be accompanied by documents and information that will enable Revenue Quebec to establish the amount of the credit on employers contribution to the HSF to which the employer is entitled.

● For more information on this new program, please visit the Government’s siteand the Information bulletin 2020-07 .

May1st,2020

https://www.revenuquebec.ca/en/press-room/tax-news/details/167361/2020-04-30/http://www.finances.gouv.qc.ca/documents/Bulletins/en/BULEN_2020-7-a-b.pdf

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Organizations Announced measures

● There will be no power cut off to anyone for non-payment.● There will be no planned service interruptions for system maintenance, with the exception of those that are absolutely

necessary.● Since Monday, March 23, Hydro Québec stopped applying administration charges for unpaid bills until further notice for all

customers. Customers unable to pay their electricity bills over the coming months will thus not be penalized. They can enter into a payment arrangement with Hydro Québec to defer payment.

Deferral of payment of amounts due to retain the right of movement for commercial vehicles and taxis.

● The Government of Quebec and the Société de l'assurance automobile du Québec announced that the payment of amounts due to maintain the right of movement for commercial vehicles and taxis is deferred to September 1st, 2020. The 5-month deferral will allow businesses to retain nearly $165 million in cash.

● Companies wishing to benefit from this deferral should: ● Contact their financial institution to request a stop to the pre-authorized debits or to request the cancelation of their

payment cheque issued in the name of the Company; ● If the above action is not possible or for any other reason, go to https://saaq.gouv.qc.ca/services-en-

ligne/entreprises/formulaire-de-report-de-limmatriculation-commerciale/ and complete the commercial registration deferral form;

● Send the form to [email protected] to facilitate and speed up the processing of each request, in order to answer questions and ensure that the approach is personalized for this particular transaction.

Support for businesses, workers, and families

April 17th,2020

https://saaq.gouv.qc.ca/services-en-ligne/entreprises/formulaire-de-report-de-limmatriculation-commerciale/mailto:[email protected]

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Organizations Announced measures

Workers in the fieldsThe government provided an investment of $ 45 million to attract Quebec workers to the fields. Farmers will thus be able to benefit from an essential helping hand for the planting and harvesting period. This investment will notably finance four measures which aim to ensure a regular supply of foodstuffs to the population in the context of the current pandemic:

● A bonus of $ 100 to seasonal agricultural workers for a minimum work of 25 hours per week;● The creation of a new program for the displacement of the workforce which takes into account the rules of social distancing in

force; ● The establishment of squads on the ground which will intervene at the time of the integration of new workers (minimum of five

employees to integrate) to support agricultural producers in the training of new workers;● Financial support granted to the 12 agricultural employment centers, to meet the needs of twinning agricultural businesses with

new workers.

Inspectors and other services● Despite the COVID-19 crisis, the Department's inspectors continue to accompany operators to ensure food safety and animal

health and well-being. They also educate operators on public health measures to be followed in relation to COVID-19 for food preparation and processing.

● However, some services offered by the Department may be affected, such as licensing. In these circumstances, no negative consequences will be attributed to the Department's clients in this regard.

Fishing businessesQuebec announced a measure of $450,000 to help fishing businesses and ensure the well-being of fish farms. (For more details seethe government website).

● As of March 18, 2020, no annual fee payment notification has been issued to licensees. As a result, no penalties will be imposed on concerned licensees, and no licenses will be canceled. Similarly, any expiring license, license or authorization willbe renewed automatically or will remain in effect.

Support for businesses, workers, and families

May 20th,2020

https://www2.gouv.qc.ca/entreprises/portail/quebec/actualites?lang=fr&x=actualites&e=209579186

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Categories Announced measures

Cultural Recovery Plan

NEW MEASUREThe Québec government has just increased its initial investment of $110 million in emergency assistance measures by $289 million to boost the cultural sectors, totaling nearly $400 million for culture.

With this plan, the government is allocating a significant amount of money to support the various players in the cultural sector, including theatre, film, television, books, circus, dance, music, performing arts, festivals and events, and fine crafts, among others. The plan's objectives include:• Support film and television production ($91.5 million);• Support businesses and cultural organizations in resuming their activities ($71.9 million);• Support innovation and creation in the performing arts (theatre, dance, circus, music, etc.) ($50.9 million);• Enhance the funding for the music sector to carry out innovative projects ($33.5 million);• Provide the cultural community with the means to achieve its digital ambitions ($14 million);• Promote Quebec culture and large-scale projects ($13 M);• Supporting artists and writers in their creation ($6.5 million);• Enhance existing financial assistance to revive artistic and cultural festivals and events ($5.9 M); and• Documenting the effects of the pandemic on the cultural community and supporting smaller real estate and equipment acquisition

projects ($2.2 million).

Support for Montreal Businesses

NEW MEASUREInjection of $50 million in new funding to support small businesses in Montréal. The funds will be administered by PME Montréal (PME MTL), the City of Montréal's business support network.

The Government of Canada, through CED, plans to provide up to $30 million to the PME MTL network through the Regional Relief andRecovery Fund (RRRF). This assistance is intended for Montreal businesses that are not eligible for other federal measures already in place related to COVID-19. In addition, the Québec government is increasing by $20 million the funding set aside for the City of Montréal under the Emergency Assistance for Small and Medium-Sized Businesses program. A sum of $40 million has already been granted to the City of Montréal through this program.

Support for businesses

June 8th,2020

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Categories Announced measures Additional details How to benefit

Incentive Program to Retain Essential Workers (IPREW)

● The Program will provide a benefit of $100 per week for low-income employees working full-time or part-time in essential service sectors.

● The benefit will be paid retroactively to March 15 for a maximum of 16 weeks.

● Eligible workers will receive a monthly taxable lump sum of $400 up to $1,600 for a 16 week period.

● To be eligible, the applicant must: o Work in a sector declared essential

during the covered periodo earn a gross salary of $550 a week

or less;o have an annual employment income

of at least $5,000 and a total annual income of $28,600 or less, calculated before the benefit.

● Applications will be made through a Revenue Québec online form that will be available as of May 19, and the incentive will be paid by direct deposit starting May 27.

Support for workers and families

April 17th,2020

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Support for businesses, workers and familiesFlexibility for income tax filings and payments Administrative application

● No action is required. The application of new production and payment deadlines and new administrative practices is automatic.

● Where the individual, trust or business expects to receive a tax or an input tax refund, KPMG recommends that the relevant tax return be filed as soon as possible.

● In addition, tax verification and collection activities will be temporarily suspended. Revenu Québec also indicated that itwould be flexible with respect to payment agreements.

IndividualsThe deadline for filing the 2019 income tax return (TP1) and payment of tax is harmonized with the federal government (i.e. the filing is deferred to June 1st, 2020 (June 15th if in business) and the payment is deferred to September 1st, 2020).

Payment of QPP, QPIP, HSF and RAMQ contributions are also deferred to September 1st, 2020.

Revenu Quebec has clarified that no late-filing penalty will be charged to individuals if their TP1 return is filed by September 1, 2020.

May 25th,2020

— 20 —

Version 9 to: June 9th 2020





Support for businesses, workers and familiesFlexibility for income tax filings and payments for corporations

This relief would apply to Part 1 tax balances and provincial instalments payable.

No interest or penalty will apply to payment of corporate tax balances and provincial instalments that become due on or after March 17, 2020 and before September 2020 if payments are made by the extended deadline.

Clarification is expected for the deadlines and terms of payments of the deferred amounts.

May 25th,2020

Obligation Filing deadline Payment deadline

Corporation income tax return

Extended to:

June 1, 2020, for returns that would normally be filed in the period from March 17 to May 31, 2020

September 1, 2020, for returns that would normally be filed in the period from June 1 to August 31, 2020

Extended to September 1, 2020, for balance payments that would normally be made in the period from March 17 to August 31, 2020

Corporation instalment payments N/A

Extended to September 1, 2020, for payments that would normally be made in the period from March 17 to August 31, 2020

Obligation

Filing deadline

Payment deadline

Corporation income tax return

Extended to:



Extended to September 1, 2020, for balance payments that would normally be made in the period from March 17 to August 31, 2020

Corporation instalment payments

N/A

Extended to September 1, 2020, for payments that would normally be made in the period from March 17 to August 31, 2020

— 21 —






Support for businesses, workers and familiesFlexibility for trusts and partnerships

May 25th,2020

Filing deadline Payment deadline

Trust income tax or information return

Extended to May 1, 2020, for returns that would normally be filed for the 2019 taxation year by March 30, 2020

Extended to September 1, 2020, for payments related to the income tax return filed for the 2019 taxation year

Extended to June 1, 2020, for returns that would normally be filed between March 31 and May 31, 2020

Extended to September 1, 2020, for payments that would normally be made in the period from March 17 to August 31, 2020 and that are related to the income tax return filed for the 2019 taxation year

Extended to September 1, 2020, for returns that would normally be filed between June 1 and August 31, 2020

Extended to September 1, 2020, for tax balance payable for taxation year ended during the 2020 calendar year, which would otherwise be payable before September 1, 2020.

Trust instalment payments N/A

Extended to September 1, 2020 for the June 15, 2020, instalment

Partnership information return

Extended to:

May 1, 2020, for returns that would normally be filed in the period from March 17 to April 30, 2020

September 1, 2020, for returns that would normally be filed in the period from May 31 to August 31, 2020

N/A

Filing deadline

Payment deadline

Trust income tax or information return

Extended to May 1, 2020, for returns that would normally be filed for the 2019 taxation year by March 30, 2020

Extended to September 1, 2020, for payments related to the income tax return filed for the 2019 taxation year

Extended to June 1, 2020, for returns that would normally be filed between March 31 and May 31, 2020

Extended to September 1, 2020, for payments that would normally be made in the period from March 17 to August 31, 2020 and that are related to the income tax return filed for the 2019 taxation year

Extended to September 1, 2020, for returns that would normally be filed between June 1 and August 31, 2020

Extended to September 1, 2020, for tax balance payable for taxation year ended during the 2020 calendar year, which would otherwise be payable before September 1, 2020.

Trust instalment payments

N/A

Extended to September 1, 2020 for the June 15, 2020, instalment

Partnership information return

Extended to:

May 1, 2020, for returns that would normally be filed in the period from March 17 to April 30, 2020

September 1, 2020, for returns that would normally be filed in the period from May 31 to August 31, 2020

N/A

— 22 —






Support for businesses, workers and familiesFlexibility for income tax filings and payments for GST/HST, QST and other taxes

May 25th,2020

Obligation Filing deadline Payment deadline

GST/HST and QST return

The usual deadlines apply.

However, you will not be charged a late-filing penalty for a return that should have been filed in the period from March 27 to June 1, 2020, provided the return is filed no later than June 30, 2020.

Extended to June 30, 2020, for net tax payments that would normally be made in the period from March 27 to June 1, 2020

GST/HST and QST instalments N/A Extended to June 30, 2020, for instalments that would normally be made in the period from March 27 to June 1, 2020

Return respecting the tax on lodging

Extended to July 31, 2020, for the first calendar quarter of 2020


Other taxes:

• Tax on alcoholic beverages • Tax on insurance premiums • Specific duty on new tires • Municipal tax for 9-1-1 service • Fuel tax • Tobacco tax

The usual deadlines apply. The usual deadlines apply.

Obligation

Filing deadline

Payment deadline

GST/HST and QST return


However, you will not be charged a late-filing penalty for a return that should have been filed in the period from March 27 to June 1, 2020, provided the return is filed no later than June 30, 2020.

Extended to June 30, 2020, for net tax payments that would normally be made in the period from March 27 to June 1, 2020

GST/HST and QST instalments

N/A

Extended to June 30, 2020, for instalments that would normally be made in the period from March 27 to June 1, 2020

Return respecting the tax on lodging



Other taxes:

· Tax on alcoholic beverages

· Tax on insurance premiums

· Specific duty on new tires

· Municipal tax for 911 service

· Fuel tax

· Tobacco tax



— 23 —






Support for businesses, workers and familiesFlexibility for other tax information returns and source deductions

May 25th,2020

Filing deadline Payment deadline

Information and income tax return for non-profit corporations

Extended to:



N/A

Information return for registered charities and other donees

Extended to December 31, 2020, for returns that would normally be filed in the period from March 17 to December 30, 2020 N/A

Source deductions and employer contributions Obligation Filing deadline Payment deadline

Payment of source deductions and employer contributions The usual deadlines apply. The usual deadlines apply.

Filing deadline

Payment deadline

Information and income tax return for non-profit corporations

Extended to:



N/A

Information return for registered charities and other donees

Extended to December 31, 2020, for returns that would normally be filed in the period from March 17 to December 30, 2020

N/A

Source deductions and employer contributions

Obligation

Filing deadline

Payment deadline

Payment of source deductions and employer contributions



— 24 —







Support for innovation projects

● Program to support businesses and business combinations at the various stages of an innovation project to help build their capacity for innovation.

● Eligible projects are innovation projects of product or process, from the planning stage to the pre-marketing stage (technological showcase).

● For each of the projects, the financial assistance granted to applicants takes the form of a non-refundable contribution.

● To take advantage of this measure, the business must demonstrate that the innovation project meets the criteria established by the ministry.

● For ongoing financial assistance requests, the financial assistance rates and accrual rates are determined by the program.

● The details of the complete measure are found at :https://www.economie.gouv.qc.ca/bibliotheques/programmes/aide-financiere/programme-innovation/soutien-aux-projets-dinnovation/

Revival

April 17th,2020

https://www.economie.gouv.qc.ca/bibliotheques/programmes/aide-financiere/programme-innovation/soutien-aux-projets-dinnovation/

— 25 —






Sector Link

Tourism

The Quebec government has put in place measures to help the tourism industry. These measures can be viewed via the hypertext links below:

● Support Program for tourism development stategies: https://www.quebec.ca/tourisme-et-loisirs/aide-financiere/projets-infrastructures-touristiques/

● Assistance for festivals and tourism activities: https://www.quebec.ca/tourisme-et-loisirs/aide-financiere/tenue-festivals-evenements/

● Flexible mesures regarding annual fees for holders of classification certifications: https://citq.qc.ca/fr/index.php

● Extension of the deadline for reporting and remitting the tax on loging: http://www.finances.gouv.qc.ca/documents/Bulletins/en/BULEN_2020-6-a-b.pdf

Air services

The Program aims to support carriers so that they can provide essential air services in remote and isolated regions of Quebec during the COVID-19 health emergency.

● Programme d’aide pour le maintien des services aériens régionaux essentiels en période d’urgence sanitaire (COVID-19): https://www.quebec.ca/transports/aide-maintien-services-aeriens-covid19/

Sectoral Support

May 20th,2020

https://www.quebec.ca/tourisme-et-loisirs/aide-financiere/projets-infrastructures-touristiques/https://www.quebec.ca/tourisme-et-loisirs/aide-financiere/tenue-festivals-evenements/https://citq.qc.ca/fr/index.phphttp://www.finances.gouv.qc.ca/documents/Bulletins/en/BULEN_2020-6-a-b.pdfhttps://www.quebec.ca/transports/aide-maintien-services-aeriens-covid19/

— 26 —




Government of Canada



Loan programs for businesses -SME

Small and Medium-sized Enterprise Loan and Guarantee program

● The Development Bank of Canada (BDC), Canada’s bank for entrepreneurs, and Export Development Canada (EDC), Canada’s export credit agency, have launched the new Small and Medium-sized Enterprise Loan and Guarantee program, which will make available up to $40 billion in additional lending.

● The new Small and Medium-sized Enterprise Loan and Guarantee program will operate as follows:

o $20G: Small and medium-sized businesses can get support through a new co-lending program that will bring together the BDC and financial institutions to co-lend term loans to these businesses for their operational cash flow requirements. Eligible businesses may obtain additional credit:80% of which would be provided by BDC, with the remaining 20% by their financial institution. The program is designed in three segments to target support to different business sizes: Loans of (1) up to $312,500 to businesses with revenues of less than $1 million; (2) up to $3.125 million for businesses with revenues between $1 million and $50 million, and (3) up to $6.25 million for businesses with revenues in excess of $50 million. Loans would be interest bearing for the first 12 months only, with a 10-year repayment period.

o $20G: EDC will also provide funding to financial institutions so that they can issue new operating credit and cash flow term loans of up to $6.25 million to small and medium-sized businesses, as a result of a new national mandate enhancing EDC’s role in supporting Canadian businesses through the COVID-19 crisis. These loans will be 80% guaranteed by EDC, to be repaid within one year.

● The program will help Canadian financial institutions provide credit and liquidity options that various businesses need immediately, funded by BDC and EDC.

● To access these loans, entrepreneurs must contact their main financial institution, which will assess their situation and provide funding accordingly.

• Eligible companies could obtain up to $12.5 million through these two loan options.

Source :

www.canada.ca/en/department-finance/news/2020/03/additional-support-for-canadian-businesses-from-the-economic-impact-of-covid-19.html

https://www.canada.ca/en/department-finance/programs/financial-sector-policy/business-credit-availability-program.html


April 17th,2020

http://www.canada.ca/en/department-finance/news/2020/03/additional-support-for-canadian-businesses-from-the-economic-impact-of-covid-19.htmlhttps://www.canada.ca/en/department-finance/programs/financial-sector-policy/business-credit-availability-program.html

— 27 —







Loan programs for businesses –Middle Market

1) BDC Mid-Market Financing Program

● The Mid-Market Guarantee and Financing Program will provide commercial loans ranging from $12.5 million to $60 million to medium-sized businesses that are particularly affected by the COVID-19 pandemic and whose credit needs exceed what is already available under the Business Credit Availability Program and other measures.

● Loans will be granted by the Business Development Bank of Canada (BDC), in close collaboration with its major lenders, to cover operational liquidity needs and support business continuity.

● The BDC expects that the program will apply to businesses with annual revenues of more than $100 million.

● More details will be provided shortly.

2) EDC Mid-Market Guarantee and Financing Program

● The expanded program brings liquidity to companies who tend to have revenues of between $50 million to $300 million, to sustain operations during this emergency moment.

● EDC will continue to work with Canadian financial institutions to guarantee 75%of new operating credit and cash-flow loans – ranging in size from $16.75 million to a maximum of $80 million.

● Protection is available to exporters, international investors and businesses operating only in the Canadian market.




May 20th,2020

— 28 —







Large Employer Emergency FinancingFacility (LEEFF)

The LEEFF is a program created by the Government of Canada to provide short-term liquidity to major Canadian employers affected by the COVID-19 outbreak in the form of interest-free term loans. The purpose of the LEEFF is to provide interim funding to major Canadian employers to help them retain their staff and maintain their operations and investments until they have access to more traditional financing in the marketplace.

Who is eligible?

● The LEEFF is available to large Canadian employers, including public companies, who (a) have a significant impact on the Canadian economy, as evidenced by (i) their significant operations in Canada, or (ii) their significant workforce Canada; (b) have annual revenues generally in the order of $300 million or higher; (c) are seeking financing of about $60 or more.

● Large for-profit companies in all sectors, except the financial sector, may apply for funding under the LEEFF. Some not-for-profit businesses, such as airports, may also be eligible.

● Canada offers loans of $60 million and more, based on the applicant's cash requirements for the next 12 months.

How to apply

● As of May 20, 2020, applicants are invited to express their interest at [email protected].

● Certain restrictions apply, in particular with regard to the payment of dividends for the relevant applicants.

● For details of the credit terms and conditions, see the Canada Development Investment Corporation (CDEV) page.


May 20th,2020

mailto:[email protected]://www.cdev.gc.ca/leeff-factsheet/

— 29 —




Government of Canada (continued)



Supporting Canadian Businesses through the Canada Emergency Business Account (CEBA)

● $25G: The Government of Canada is announcing the launch of the new Canada Emergency Business Account, which will be implemented by eligible financial institutions in cooperation with Export Development Canada (EDC).

● This $25 billion program will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where revenues have decreased temporarily due to the economic impacts of theCOVID-19.

● To qualify, these organizations will need to demonstrate that they paid between $20,000 to $1.5 million in total payroll in 2019.

Details on eligibility criteria

To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:

● A business operating account in a participating financial institution;

● A Canada Revenue Agency business number, and to have filed a 2018 or 2019 income tax return;

● Eligible on-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.

● Repaying the loan balance on or before December 31, 2022 will result in a 25% loan forgiveness (up to $10,000).

● If the loan is not repaid by December 31, 2022, the remaining balance will be converted to a three-year term loan at 5 per cent interest.

● For further information regarding the CEBA, visit the CEBA’s website here.


May 20th,2020

https://ceba-cuec.ca/

— 30 —







Ensuring Businesses Have Access to Credit

Other financing options offered by BDC

● Working capital loans of up to $2 million with flexible terms and payment postponements for up to 6 months for qualifying businesses;

o Pricing: Floating Only (Based on Base Rate minus 1.75%);o Initial capital extension of 12 months;o 24-month amortization excluding initial extension:

• 40% payable over the term of the loan following initial extension;

• 60% payable at the end with balloon payment;o Standard fees (loan processing, legal fees, waiting fees)

apply.

● For current clients with a loan commitment of $1 million or less, BDC offers flexible repayment terms, such as capital payment carryovers for up to six (6) months.

● Reduced rates on new eligible loans.

How it works

● Existing BDC customers: contact the account manager by email or telephone.

● Non-client businesses: apply online or via a toll-free number: 1-877-232-2269.

● BDC.ca > Support for entrepreneurs impacted by the coronavirus COVID-19

● Starting May 1st, interest rate will be adjusted to Base Rate

Ensuring Businesses Have Access to Credit

BDC oil and gas sector financing

● For Canadian-based oil and gas producers, oil field service companies and midstream providers.

● Funds to be used for operational cash flow and business continuity purposes.

● Loan size between $15M and $60M.● Offered at commercial rates, repayable within 4 years.

How it works

● The deployment for this measure will be finalized shortly.

● In order to be eligible, the business must have been financially viable prior to the impact of COVID-19.


April 24th,2020

https://www.bdc.ca/en/pages/special-support.aspx?special-initiative=covid19

— 31 —







BDC Venture Capital

● BDC Capital, has launched the BDC Capital Bridge Financing Program under which it will make investments, in the form of convertible notes, equivalent to those committed by existing vendors or new qualified investors in the context of ongoing financing round in favor of an eligible business.

● To be eligible, companies must be Canadian, backed by a qualified venture capital firm, have raised at least $500,000 in external capital before applying for the program, and be specifically impacted by COVID-19.

● Any investment by BDC Capital will be subject to, in particular, due diligence to the satisfaction of BDC, agreement on terms of the investment and approval by a BDC Investment Committee.

● This is not limited to BDC’s portfolio. All companies that meet the criteria are eligible to apply. Interested companies should speak to their lead investor for details.

● Source: https://www.bdc.ca/en/bdc-capital/venture-capital/pages/venture-capital.aspx


April 17th,2020

https://www.bdc.ca/en/bdc-capital/venture-capital/pages/venture-capital.aspx

— 32 —







Changes to bank loan guarantees (Export Guarantee Program and International Expansion Loan Program – for listed financial institutions)• Offered in conjunction with our partner financial institutions, EDC’s Export Guarantee Program offers a payment guarantee to your

financial institution, making it more inclined to provide you with additional cash. In the short term, we can: o Increase working capital support by $1 billion through our Export Guarantee Program and our International Expansion Loan

Program.o Provide a six-month payment period to our new and existing clients for guarantee fees.o Simplify our enrollment procedures to provide cash flow support quickly.o Increase our credit capacity in the market by easing our general appetite for credit.


April 17th,2020

— 33 —







● Changes to our trade finance guarantees (Account Performance Security Guarantee and Foreign Exchange Facility Guarantee) in our bonding products:EDC’s trade financing solutions eliminate the need for collateral, helping businesses to free up their working capital. In the short term, we can:o Enhance support by 25% (limit for high-activity period) offered under the Account Performance Security Guarantee for up to US$5

million in capacity;o Simplify our enrollment procedures so that we can meet the needs of businesses during this difficult time and take advantage of

our increased appetite for risk;o Reduce the rate for our Foreign Exchange Facility Guarantee by 30% and defer payment for six months.

● Changes to our credit insurance solutions:In the short term, we are making changes to our insurance solutions (Portfolio Credit Insurance and Select Credit Insurance) to help businesses with temporary cash flow issues. Eligible companies could proceed as follows:o When assessing claims for new buyers, EDC is willing to take more risks than in the past.o EDC is more flexible when the buyer’s solvency has deteriorated.o EDC is working on a plan to make premium payments more flexible, either by deferring or adjusting fixed payments.o For the next three months, EDC is eliminating the time limit for claims under the export policy, which will allow companies to

submit a claim and receive a payment earlier than under normal policy conditions.o IMPORTANT: claims submitted will be assessed based on standard compensation guidelines.

● Only for Select Credit Insurance and eligible companies:o EDC is increasing our maximum coverage so that it will insure buyer limits of up to C$1 million (an increase of C$500,000). We

are currently updating our systems to integrate this change. o For the next 90 days, EDC will cover losses for goods shipped even if the purchaser has not accepted the goods in question

(subject to policy conditions, including a dispute with the purchaser).


April 17th,2020

— 34 —







Canada Emergency Commercial Rent Assistance for Small Businesses(CECRA)

This measure tailored for small businesses offers forgivable loans to eligible commercial property owners so that they can reduce the rent owed by their impacted small business tenants (“ISBT”) by at least 75% for the months of April, May and June, 2020. The features of the CECRA are the following: ● The loans will cover 50% of the gross rent owed by ISBTs affected by COVID-19 during the 3-month period of April, May and June 2020.● The property owner will be responsible for no less than half of the remaining 50% of the gross rent payments (paying no less than 25% of the

total). ● The ISBT will be responsible for no more than half of the remaining 50% of the gross rent payments (paying no more than 25% of the total).

In order for a property owner to qualify, they must: ● Be the owner of the commercial real property that houses at least one affected small business tenant;● Enter into (or have already entered into) a legally binding rent forgiveness agreement for the period of April, May and June 2020, reducing the

rent of the affected small business tenant by at least 75%;● Ensure that the rent forgiveness agreement with each affected tenant includes: a moratorium on evictions for the period during which the

owner agrees to apply the proceeds of the loan; ● File the declaration of rental income included in the certificate; ● Under the CECRA program for small businesses, properties are eligible whether or not they are on a mortgage.

Eligible tenants include: eligible small business tenants, eligible small business subtenants, residential components and multi-unit residential properties with commercial tenants (i.e. mixed usage).

ISBTs are businesses, including non-profit and charitable organizations who:● pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement);● generate no more than $20M in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level), and● have experienced at least a 70% decline in pre-COVID-19 revenues.o To measure revenue loss, small businesses can compare revenues in April, May and June of 2020 to that of the same month of 2019. They can also use an average of their revenues earned in January and February of 2020.


May 20th,2020

— 35 —






Categories Additional details

Canada Emergency Commercial Rent Assistance for Small Businesses(CECRA)

How to apply● The deadline to apply is August 31, 2020.

● The program’s details, including how funds will be disbursed and how to apply, are being finalized and will be available soon.

Additional details● The program can be applied retroactively.

● Property owners may still apply for assistance once the 3-month period has ended if they can prove eligibility during those months.

● Property owners must refund amounts paid by the ISBTs for the period. However, if rent has already been collected at the time of CECRA approval, a credit to the tenant for a future month’s rent (i.e. July for April) is acceptable if agreed upon by both the property owner and the tenant. This can be a flexible 3-month period.

● The additional details are published on CMHC’s website.

NEW MEASURE - PROVINCE OF QUEBEC● In order to maximize the participation of commercial building owners in CECRA program, the Government of Québec intends to compensate

50% of the owners' loss. Landlords, who had to commit to absorbing a 25% loss by registering into this program, will thus receive an amount equivalent to 12.5% of the total cost of rent in order to reduce their loss by half.

● This represents an additional investment of approximately $140 million by the Government of Québec. The cost of this program, shared between the federal and provincial governments, now totals nearly $280 million for Quebec, doubling its investment.


May 20th,2020

https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business

— 36 —






Categories Measures included into Bill C-14 (April 11th, 2020)

75% subsidy -Canada Emergency Wage Subsidy(CEWS)

The CEWS is a temporary government subsidy that will generally provide an amount to “eligible entities” of all sizes and sectors that have had their revenues decline due to COVID-19. The CEWS was initially available for three qualifying periods, from March 15, 2020 to June 6, 2020. The CEWS is extended by an additional 12 weeks to August 29, 2020.

There is no overall limit on the wage subsidy amount that an eligible employer may claim under the CEWS, but the federal government has introduced anti-avoidance measures to ensure that the subsidy is not inappropriately obtained. CEWS is available for up to 24 weeks, retroactively from March 15, 2020 to August 29, 2020.

An “eligible entity” includes:• An individual (including a trust, see below)• A taxable corporation• Certain persons exempt from tax under specific provisions of the Act (e.g. a non-profit organization), including

• Registered journalism organizations that are tax-exempt under paragraph 149(1)(h) of the Income Tax Act (the Act)• National level Registered Canadian Amateur Athletic Associations that are tax-exempt under paragraph 149(1)(g) of the Act• Indigenous government-owned corporations that are carrying on a business and are tax-exempt under paragraph 149(1)(d.5) of the

Act• Wholly owned subsidiaries of Indigenous government-owned corporations that are carrying on a business and are tax exempt under

paragraph 149(1)(d.6) of the Act• A registered charity• Private colleges and private schools• A partnership where all its members are eligible entities or an Indigenous government • A partnership, if throughout that qualifying period, the total fair market value of all interests in the partnership held – directly or indirectly,

through one or more partnerships – by non-eligible entities is less than or equal to 50% of the total fair market value of all interests in the partnership

• Exception: Public institutions (e.g., municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals)

Tax exempt trust The government proposes to change the eligibility for trusts with employees so that a trust that is a tax-exempt entity (other than a public institution), will qualify for the CEWS only if it is a registered charity or one of the other types of eligible tax-exempt entities. In addition, a trust that is a public institution would qualify only if it is a prescribed organization. This change is proposed to apply beginning with the third qualifying period (i.e., May 10 to June 6, 2020).


Bill C-14 was enacted on April 11th 2020 and details are presented here.

May 27th, 2020

— 37 —






Categories Newly introduced measures

75% subsidy -Canada Emergency Wage Subsidy(CEWS)

The wage subsidy amount on “eligible remuneration” paid to an “eligible employee” is the greater of:● 75% of the amount of eligible remuneration paid, up to a maximum of $847 per week (or, if the eligible employee does not deal at arm’s length

with the qualifying entity, then nil) ● The lesser of:

o The amount of eligible remuneration paid, up to a maximum of $847 per week, oro 75% of the weekly “baseline remuneration” paid

The wage subsidy amount is reduced if the qualifying entity or its eligible employee participate in other government programs, such as the 10% wage subsidy and the Employment Insurance Work-Sharing program.

“Eligible remuneration” includes: ● Salary and wages● Fees, commissions or other amounts for services ● Other remuneration such as amounts for which employers would generally be required to withhold or deduct amounts to remit (e.g. taxable

benefits) ● Exception: certain amounts are excluded, such as stock option benefits and retiring allowances.

The “baseline remuneration” in respect of an “eligible employee” means: The average weekly remuneration paid between January 1 and March 15, 2020 inclusively, excluding any seven-day (or more) period for which the employee did not receive remuneration.

The government proposed, on May 15, 2020, to allow employers to alternatively choose to calculate baseline remuneration for an employee as the average weekly remuneration paid to the employee from March 1 to May 31, 2019. Employers could choose which calculation method to use on an employee-by-employee basis, beginning with the first qualifying period starting March 15, 2020. This change is intended to help determine remuneration for employees on parental, disability, or unpaid leave, or for individuals employed on a seasonal basis.

Refund for Certain Payroll Contributions : To the extent that an eligible employee is on leave with pay, 100% of the amounts paid for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan will be refunded.An employer that is eligible for the CEWS and that has an establishment in Quebec may benefit from the credit for contributions to Health Services Fund (HSF) in respect of an employee who is on paid leave due to the COVID-19 pandemic for a period of twenty four weeks, retroactive to March 15, 2020. The amount of the credit for contributions to the HSF will be equal to the total amount of the contributions to the HSF paid by an employer on the salary and wages paid to an employee on paid leave du

quebec response team: covid-19/business continuity€¦ · covid-19/business continuity ....

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