Canada’s New COVID Relief Program for Hard-Hit Businesses

Canada’s New COVID Relief Program for Hard-Hit Businesses

The Highly Affected Sectors Credit Availability Program (HASCAP), launched on 26^th January, will provide financial support to the hardest-hit Canadian businesses impacted by the pandemic. The COVID-19 crisis continues to affect companies across Canada. This program is designed to provide affordable credit solutions to allow such businesses to sustain themselves and maintain employment.

Several businesses In Canada are currently operating at a limited capacity, switching to exclusively digital services, or completely suspending operations. Throughout the pandemic, the Canadian government has continued to support businesses through a range of useful and compassionate relief measures.

Under the HASCAP, hard-hit businesses will be offered government-guaranteed loans of up to $1 million (at low-interest rates) by the Business Development Bank of Canada, working in collaboration with Canadian financial institutions. Most severely affected businesses – such as chain restaurants or hotels that operate across several locations within one related business entity – can avail loans of up to $6.25 million.

This program will help businesses cover daily operational costs during the pandemic and allow them to invest in long-term survival and growth. Businesses across all hard-hit sectors in Canada can be eligible for this program. ‘Hard-hit’ sectors include tourism, hospitality, restaurants, and companies that provide in-person services.

For HASCAP eligibility, businesses must demonstrate a year-on-year decline in revenue of at least 50% in 3 months, within the eight months preceding application. They must also prove to the financial institution that they previously applied for the Canada Emergency Rent Subsidy or the Canada Emergency Wage Subsidy. Eligible businesses can apply at principal financial institutions starting 1^st February, and more widely 15^th February onwards.

During the COVID crisis, the government has offered the most extensive relief packages in Canadian history. Businesses and employees have benefitted from several programs, including:

• Canada Emergency Wage Subsidy covers up to 75% of the payroll – currently extended till June 2021.
• Canada Emergency Business Account, which offers an interest-free loan of up to $60,000 – 25% of the amount is forgivable if it is repaid by 31^st December 2022.
• Canada Emergency Rent Subsidy covers 65% of the rent for business owners – currently extended till June 2021. Support for new lockdowns will cover up to 90% of the rent.
• Regional Relief and Recovery Fund, which contains above $2 billion to support small businesses that cannot access existing measures for financial support.

 

The HASCAP is an additional relief measure that will benefit the long-term stability of businesses in Canada. To find out more about establishing and operating a business in Canada to gain permanent residence, contact our seasoned consultants at 8595338595 or [email protected]