OTTAWA — The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released Supporting Canadians and Fighting COVID-19: Fall Economic Statement 2020 on November 30, which acknowledged that ongoing fiscal support will remain necessary deep into 2021 and outlined new support measures targeted at Canada’s hardest-hit industries — including tourism, hotels, arts and culture and the air-travel sector.
Among the proposed measures is the Highly Affected Sectors Credit Availability Program (HASCAP). This program would offer 100-per-cent government-guaranteed financing for heavily impacted businesses and provide low-interest loans of up to $1 million over extended terms, up to 10 years. Rates will be lower than those offered in Business Credit Availability Program (BCAP) and beneath typical market rates for hard-hit sectors.
An additional investment of $500 million has been proposed for the Regional Relief and Recovery Fund (RRRF), which would bring total funding to more than $2 billion. The government will earmark a minimum of 25 per cent of all the RRRF’s resources to support local tourism businesses, representing $500 million in program support through June 2021. To date, the RRRF has provided $202 million in support to 2,830 tourism-related businesses.
The government has also proposed an investment of $181.5 million in 2021-22 to the Department of Canadian Heritage and the Canada Council for the Arts to support the planning and presentation of COVID-19-safe events and the arts — both live and digital — and to provide work opportunities in these sectors.
Further, the federal government has proposed an increase to the maximum wage-subsidy rate to 75 per cent for the period beginning December 20 and to extend this rate until March 13, 2021. It is also proposing the extension of the Canada Emergency Rent Subsidy (CERS), at current subsidy rates, until March 13, 2021.
The Canada Emergency Business Account (CEBA) will also be expanded, allowing qualifying businesses to access an additional, interest-free $20,000 loan. Half of this additional amount, up to $10,000, would be forgivable if the loan is repaid by Dec. 31, 2022. The deadline to apply for a CEBA loan has been extended to March 31, 2021.
Beyond support programs, it was also announced that foreign-based companies selling digital products or services in Canada will be required to register for, collect and remit the GST/HST on their taxable sales. This includes short-term rental platforms, such as Airbnb, and is set to take effect on July 1, 2021.
In a newsletter to members, the Hotel Association of Canada called this announcement “the icing on the cake,” recognizing that the government had responded to the organizations key asks.
“We appreciate the work and commitment that the government has put forward in the [Fall Economic Statement],” says Vince Accardi, acting CEO, Tourism Industry Association of Canada. “It’s reassuring that our sector is being acknowledged and that its unique needs are being recognized as we continue to look for hope of recovery through the pandemic. We want to thank the government, specifically Minister Joly, for fighting for the sector.”
