The federal government is increasing a payroll subsidy to small business to thwart layoffs due to COVID-19.
Prime Minister Justin Trudeau says the government will now cover up to 75 per cent of salaries, a major increase over the original 10 per cent subsidy plan.
The subsidy will be retroactive to mid-March and is part of a suite of small business measures being rolled out today. Full details are expected to be announced on Monday.
Trudeau calls small and medium businesses the “backbone” of our country and his message is “we’re here for you.”
He says he hopes small businesses who have had to lay off workers will think about rehiring them because of these wage subsidies.
Trudeau says the government will also suspend GST payments owed by businesses until June so that companies will have more cash liquidity during the economic crisis created by the coronavirus.
Trudeau also says the government is working with banks to provide loans of up to $40,000 for small businesses, which will be interest-free for the first year and up to $10,000 could be waived for repayment.
The measures follow the Bank of Canada’s decision this morning to cut its benchmark interest rate, a move that Trudeau says he supports.
Asked about paying for the measures, the prime minister says the government’s economic foundations were strong before the pandemic and he expressed confidence the economy will bounce back after the crisis passes.
Watch the prime minister’s full statement below.