The following questions came from CCAB members, Aboriginal businesses, and participating viewers of the May 4th webinar. The answers came from the panelists, who acknowledged that if they did not have complete answers, they were working with CCAB to identify the gaps and would bring forward for further discussion to find solutions.
You are encouraged to continue sending questions to CCAB via firstname.lastname@example.org.
CCAB/Government of Canada Webinar
I missed the webinar, where can I view the recording online?
The recorded webinar with CEO Tabatha Bull and the Government of Canada can be viewed here.
Canada Emergency Business Account (CEBA)
What kind of loan is CEBA?
CEBA provides interest-free* loans up to $40,000 to small businesses and not-for-profits through traditional financial institutions to help cover operating costs. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25% (up to $10,000). For further details on CEBA please visit: https://ceba-cuec.ca/
*The loan will bear interest at 5% per year, starting January 1, 2023.
There are Aboriginal business owners who pay themselves and their partners via dividends, meaning that their payroll is less than $20,000. This makes them ineligible for the CEBA. What can they do? As well, in second part to this question, CEBA states that it is not to be used for dividend payments. Does this mean they cannot pay themselves until they have used all $40,000?
CEBA eligibility was expanded on May 19 to include a greater number of businesses that are sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll.
The CEBA loan can only be used for to cover non-deferrable operating expenses like payroll, rent, utilities, insurance, and property tax. At this time, CEBA may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.
If you are ineligible for CEBA, you may qualify for the loan through the Aboriginal Financial Institution (AFI) network or your Regional Development Agency. (See below).
$306.8 Million Stimulus Package
Will the interest on both the CEBA loan and the $306.8-million Indigenous relief fund be the same?
The rules of these two programs are similar, however, the Canada Emergency Business Account (CEBA) program delivered by traditional financial institutions provides a loan that will bear interest at 5% per year, starting January 1, 2023. The $306.8M Indigenous relief fund gives Indigenous businesses access to short-term interest-free loans and non-repayable grants, which is managed by the network of Aboriginal Financial Institutions (AFIs) and Métis Capital Corporations (MCC) in partnership with Indigenous Services Canada.
How can I meet the requirements to access the $306M Indigenous relief fund?
Details and requirement information are updated on the NACCA website, please visit https://nacca.ca/covid-19/.
Aboriginal Financial Institution (AFI)
If there is an Indigenous business that is not a client of an AFI or a traditional bank, what supports via grants or loans are available for them?
It is recommended that they contact their local AFI, as NACCA and many AFI’s have indicated an openness to work with new clients. Similar funding is available through the Regional Relief & Recovery Fund for businesses that have been unable to access other Government of Canada measures. The Regional Relief & Recovery Fund is being delivered through the 6 Regional Development Agencies across Canada. Traditional financial institutions can provide access to other government programs in cooperation with Export Development Canada (EDC) and Business Development Bank of Canada (BDC). Visit CCAB’s resources and support for Aboriginal business to determine what program meets your needs and criteria.
Canada Emergency Wage Subsidy (CEWS)
With respect to the Canadian Emergency Wage Subsidy (CEWS), a decision was made that “the Government extend eligibility for the CEWS to include corporations carrying on a business that are at least 90 per-cent-owned by one or more Indigenous governments, as well as partnerships carrying on a business the members of which are Indigenous governments, eligible Indigenous government-owned corporations and other eligible employers.”
When will there be guidelines around this program and when will we expect to have the regulations passed?
The Canada Emergency Wage Subsidy (CEWS) is a grant program, which subsidizes up to 75% of employee wages for up to 12 weeks. As of May 15th, the Government of Canada extended the CEWS by an additional 12 weeks to August 29, 2020. They also extended the eligibility criteria to Aboriginal business, including:
- Partnerships that are up to 50-per-cent owned by non-eligible members;
- Indigenous government-owned corporations that are carrying on a business, as well as partnerships where the partners are Indigenous governments and eligible employers
Details and eligibility on ccab.com and: https://www.canada.ca/en/department-finance/news/2020/05/extending-eligibility-for-the-canada-emergency-wage-subsidy.html
Canada Emergency Response Benefit (CERB)
What is CERB?
The Canada Emergency Response Benefit (CERB) provides temporary income support to workers who have stopped working related to COVID-19. This program provides individuals with temporary income support ($500 a week for up to 16 weeks). For further details on CERB please visit: https://www.canada.ca/en/services/benefits/ei/cerb-application.html
The government recently mandated a target of at least 5% procurement from Indigenous businesses. What is the current plan to meet this target?
Parliamentary Secretary, Pam Damoff stated that government knows Indigenous business can supply far more than 5% procurement target. She stipulated that the 5% is a floor, not a ceiling, and that due to the pandemic there will hopefully be an acceleration of procurement, especially with CCAB now sitting at the table of the new Supply Council.
Some Aboriginal businesses have tried to supply to the Federal government through the buy and sell program in the call for PPE over the last few weeks and have not been successful, what should they do?
CCAB continues to provide lists of Certified Aboriginal Businesses that can provide PPE or are able to pivot their manufacturing to produce PPE. These lists are being provided as part of a COVID-19 Indigenous Business COVID-19 Taskforce to Indigenous Services Canada and directly to Public Service and Procurement Canada. Tabatha Bull, CEO & President of CCAB has recently been asked to sit on the newly created COVID-19 Supply Council in support of Canada’s response and recovery. More progress to be made in the weeks coming.
What is the plan for economic recovery, and will there be further support available?
Ongoing conversations to highlight Indigenous business needs and supports are required and the same approach is going to be used in the recovery phase as well. The Honourable Mary Ng stated that she is excited to be able to continue to work with Indigenous businesses who have start-ups and scale-ups in Canada, and businesses going into the international markets.
Restarting the framework that the federal government, provinces and territories have put together is essential to ensure the different experiences across the country are being heard to coordinate the restart. The federal government is going to work with businesses to ensure a successful transition.
Visit resources and support for Aboriginal business on CCAB’s website to determine what provinces and territories have supplied recovery program information.
Some businesses are having difficultly working from home due to their Internet surfaces. Is the government still moving forward on investing in broadband and what are the timelines?
The government is working to address the lack of connectivity and disadvantages smaller communities experience. It currently has programs in progress to connect Canadians living in rural and remote areas, aiming to connect 95% of Canadians to high-speed Internet by 2026 and all Canadians by 2030. In light of COVID-19, the CRTC has extended its application process for Broadband funding for projects where there is a great need for improved broadband Internet and mobile wireless services.
Canada Emergency Commercial Rent Assistance (CECRA)
Does commercial rent support apply to home-based businesses that need to cover household rent?
More information and specific criteria for the CECRA program can be found at: https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business.
Many Indigenous business are unable or unwilling to take on additional debt to recapitalize their businesses, has the government considered providing support for equity investments in Indigenous businesses?
CCAB recognizes that businesses will need to raise new capital in order to survive. In upcoming discussions with government, we will ask if there will be support provided for equity investments. Collaboration and keeping liquidity in the market will undoubtable help.
The government recently announced close to $1 Billion dollars through Regional Development Agencies, $287 million of which is through the community futures program. Is there a set aside within these funds for Indigenous businesses and when will further information be available?
The funding is to support all rural businesses and communities for provision of much-needed access to capital through the Community Futures Network. You can get help through your Regional Development Agency.
What thought has been given to create programs to bring Indigenous businesses together with exporters, manufacturers and energy industry leaders to structure innovation partnerships using a more agile business model to capitalize on recovery opportunities?
CCAB has given a lot of thought to this question and will discuss it with the Federal Supply Council, and to the Ontario Indigenous Economic Response and Recovery Group for consideration. We are also planning a virtual event this fall that will address responsive business models and recovery opportunities. Please stay informed by visiting ccab.com frequently.