Has your company reviewed the most recent list of the Canadian Government’s COVID-19 recovery programs? CAAR has compiled a list of programs which may be of interest to ag retailers. Click to read more about which of these programs may be relevant to your business.

Agriculture and Agri-Food Canada (AAFC) is working with other federal government departments to determine the agriculture industry’s eligibility for various COVID-19 response programs. See the list below for Cash Flow and Liquidity Measures and Strategic Opportunities which may have suitability for ag retail businesses. 

Initiative: Increased Credit Availability to the Agriculture Sector

Lead: Farm Credit Canada
Description: $5 Billion in lending capacity to producers, agribusinesses, and food processors. FCC has put in place: a deferral of principal and interest payments for up to 6 months for existing loans, a deferral of principal for up to 12 months, access to additional credit line up to $500,000 and access to an additional term loan up to $2.5M.

Initiative: Canada Emergency Business Account

Lead: Export Development Canada (EDC) and Business Development Bank of Canada (BDC) through financial institutions.
Description: This program will provide up to $25 billion to eligible financial institutions so they can provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).

To qualify, organizations either need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019, or for applicants with payroll lower than $20,000, they would need to demonstrate that they had eligible non-deferrable expenses between $40,000 and $1.5 million.

Eligible non-deferrable expenses include:

• Wages and other employment expenses to independent (arm’s length) third parties;
• Rent or lease payments for real estate used for business purposes;
• Rent or lease payments for capital equipment used for business purposes;
• Payments incurred for insurance related costs;
• Payments incurred for property taxes;
• Payments incurred for business purposes for telephone and utilities in the form of gas, oil, electricity, water and internet;
• Payments for regularly scheduled debt service;

Agriculture and agri-food businesses that meet the payroll qualifications or the non-deferrable expense qualifications will be eligible for this loan. Access to this type of loan, along with specific agricultural loans, could help defray some immediate cashflow requirements for the spring planting period.

Initiative: Small and Medium-sized Enterprise Loan and Guarantee program

Lead: Export Development Canada (EDC) and Business Development Bank of Canada (BDC) through financial institutions.
Description: This program will enable up to $40 billion in lending and includes: Loan Guarantee for Small and Medium-Sized Enterprises: EDC is working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to SMEs. Co-Lending Program for Small and Medium-Sized Enterprises: BDC is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program. EDC aspect of this loan guarantee program could have uptake by the agriculture and agri-food sector specifically those who have existing loans with EDC.

Initiative: Regional Relief and Recovery Fund

Lead: ISED and Regional Development Agencies.
Description: The Fund will help to mitigate the financial pressure experienced by businesses and organizations to allow them to continue their operations, including paying their employees; support projects by businesses, organizations and communities to prepare now for a successful recovery.

This initiative is implemented by the six regional development agencies, which are familiar with their regions' economic realities and are often the first point of contact for people at the local level.

This initiative includes two components:

• $675 million to support regional economies, businesses, organizations and communities in regions all across Canada;
• $287 million to support the national network of Community Futures Development Corporations, which will specifically target small businesses and rural communities across the country.

This fund is specifically targeted to those that may require additional help to recover from the COVID-19 pandemic but have been unable to access existing support measures.
For the first component of RRRF funding, $675 million has been made available to Regional Development Agencies (RDAs). Prospective applicants are encouraged to contact their RDA to apply. Further details on are available online:

• Western Economic Diversification
• Canadian Northern Economic Development Agency
• Federal Economic Development Agency for Southern Ontario
• Federal Economic Development Initiative for Northern Ontario
• Canada Economic Development for Quebec Regions
• Atlantic Canada Opportunities Agency

For example, Western Economic Diversification (WD) will offer interest free loans up to $1,000,000 to any business that operates in Western Canada. WD is also collaborating with Community Futures Pan West to deliver $95.7 million, from the second component of RRRF funding, to rural businesses. Through this program, rural businesses will be able to apply for loans of up to $40,000.

As the financing terms of RRRF and Canada Emergency Business Account (CEBA) are the same, applicants can only apply to one of these federal programs.

Initiative: Income Tax deferral

Lead: Finance Canada
Description: Allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020 to allow for more short-term cash flow.

Initiative: Work-Sharing Program – Employment Insurance

Lead: ESDC
Description: Work-Sharing is a program that helps employers and employees avoid layoffs when there is a temporary decrease in business activity beyond the control of the employer. The program provides EI benefits to eligible employees who agree to reduce their normal working hours and share the available work while their employer recovers. Effective March 15, 2020 to March 14, 2021, and not limited to one specific sector or industry, the Government of Canada is introducing temporary special measures due to COVID-19.

• Extension of the maximum possible duration of an agreement from 38 weeks to 76 weeks 
• Mandatory cooling off period has been waived for employers who have already used the Work-Sharing program so that eligible employers may immediately enter into a new agreement
• Reduce the requirement and expand eligibility to employers affected by accepting business who have been in business for only 1 year rather than 2 and eliminate the burden.

Initiative: Agricultural Jobs Portal

Lead: AAFC
Description: An online jobs portal directing Canadians to job opportunities in the sector To further help address labour challenges facing the sector, and help Canadians who have had their jobs affected by COVID-19, the department has launched an agricultural jobs portal to inform Canadians about the diverse and rewarding job opportunities available in the sector.

Initiative: AgriInnovate

Lead: AAFC
Description: This program provides repayable contributions for projects that aim to accelerate the commercialization, adoption and/or demonstration of innovative products, technologies, processes or services that increase agri-sector competitiveness and sustainability. AgriInnovate could further ensure Canadian food security by funding projects that utilize innovations to improve productivity, helping to address strains on Canadian food supply brought on by COVID-19.

Source: Agriculture and Agri-Food Canada