Trudeau Widens Covid Aid Package to Include More Small Businesses
(Bloomberg) -- Canadian Prime Minister Justin Trudeau said Thursday his government will broaden its fiscal rescue plan to include commercial landlords and to lend more to small businesses.
The Canada Emergency Commercial Rent Assistance program will provide loans for landlords who lower or forgo rent payments from their business tenants between April and June, Trudeau said at a press conference in Ottawa. The prime minister also said a government-guaranteed credit program to provide businesses with C$40,000 ($28,200) in loans will be more inclusive.
“Expanding the Canada Emergency Business Account and making sure businesses can afford their rent is the smart thing to do,” Trudeau said.
Policy makers are pulling out all the stops to soften the blow from a near-total economic shutdown. The government has committed more than C$250 billion in programs, including support for those who have abruptly lost their jobs, and assistance for companies to keep workers on payrolls. That’s in addition to about C$200 billion in liquidity injected into the financial system by the central bank in the past several weeks.
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A portion of the rental loans will be forgivable, and will be retroactive to the beginning of April, according to a statement from Trudeau’s office. Since rental laws fall under provincial jurisdiction, Trudeau said he’s working with premiers to implement the plan.
Property stocks rose on the news. RioCan Real Estate Investment Trust, one of Canada’s largest retail landlords, jumped as much as 3% before paring gains, and was trading up 0.4% to C$16.10 at 12:30 p.m. in Toronto.
REITs have been among the hardest-hit shares amid the Covid-19 market rout and are down 26% this year. RioCan Chief Executive Officer Ed Sonshine said last month the company would lose as much as one-quarter of its revenue in the next two months as tenants shut their doors as part of efforts to fight the pandemic.
Health Canada is currently reporting 28,899 cases of coronavirus in Canada with 1,048 fatalities.
The government also expanded the Canada Emergency Business Account, a government-guaranteed credit program to provide small businesses with C$40,000 in loans. Companies with 2019 payroll costs between C$20,000 and C$1.5 million are now eligible. Previously the range was between C$50,000 and C$1 million.
“Relaxing the payroll eligibility criterion is a positive step, one that will help more small and medium businesses. However, we continue to advocate that the government consider removing payroll criteria from the program to ensure that any business that needs bridge financing can access this desperately needed assistance,” Perrin Beatty, President and CEO of the Canadian Chamber of Commerce, said in a statement.
Trudeau said more than 195,000 loans have already been approved since it launched on April 9, for a total of C$7.5 billion.
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