Thank you so much, Mr. Chair. I really appreciate the opportunity to speak with this committee about some of our government's supports for Canada's small business owners and entrepreneurs.
Small businesses are at the very heart of our communities across the country, and they are truly the backbone of our national economy. They employ 8.3 million hard-working Canadians and account for nearly seven out of every 10 private sector jobs in our country.
Therefore, when this pandemic hit, we knew that we needed to do everything possible to help them here in Canada. We remain steadfast to ensure that these small businesses that are the pillars of our towns, our cities and our neighbourhoods get support during this difficult time.
Mr. Chair, over the past several months my team and I have spoken with thousands upon thousands of small business owners and entrepreneurs in every sector and region across Canada. We heard that our response to COVID-19 needs to be flexible and balanced.
It needs to be flexible because the situation we currently face is truly unprecedented, and there really is no template to work from. Circumstances and challenges are still evolving, and at a rapid pace. Our response also needs to be balanced, because we need to meet the needs of all small business owners during these challenging times. There is no one-size-fits-all approach to relief.
Small businesses, because of their size, are often more entrepreneurial, more nimble and very in touch with their customers and communities. This is often the key to their success, but it also makes them vulnerable during turbulent times like the one that we are facing right now in a global pandemic.
When Canadians are asked to stay at home and they’re not able to eat out at their favourite restaurant, go to an appointment at their physiotherapist's or their salon or travel and stay at a hotel or bed and breakfast, there is an impact on those businesses. If you’re an entrepreneur who has invested everything in a community theatre or a pub or a bakery or your technology, you're absolutely feeling the brunt of COVID-19. You have probably had to close your doors, and your sales have probably taken a huge hit. Indeed, for many they've disappeared entirely.
When people are asked to stay at home, they’re likely to also hold off on purchases, so if you’re a business that sells technology, furniture or jewellery, you’ve also taken a hit. Then there are service providers that we normally interact with every day: our dry cleaners, our yoga studios, fitness studios, day cares and hair salons. They’re feeling the effects of having to temporarily close their doors. If you are in a business that moves people or goods, like our taxi drivers or our delivery service workers, your revenue has been impacted too.
The harsh reality is that the majority of our entrepreneurs and small business owners have faced serious challenges, and this happened almost overnight for them.
For a small business to get over the challenges of this pandemic, they’re likely facing at least three major threats: keeping their teams together, keeping their costs low and covering their operating expenses. Our government has taken serious and decisive action to address each of these threats.
Mr. Chair, I grew up in a small business. I know that this is often a family affair. Seventy-five per cent of Canadian small businesses have fewer than 10 employees. You often know each other's birthdays, kids’ names and spouses. From my own experience and through conversations with small business owners, I know that employers often think of their teams as extended family. I also know that in order for a business to remain resilient through this difficulty and recover more quickly after this challenging time, the team must stay together.
That is why one of our most important initiatives is the Canada emergency wage subsidy. Through this subsidy, we are going to keep more Canadians employed by covering 75% of those wages. This will be a key support as we enter the restart phase, and we’re extending the wage subsidy for an extra three months, until the end of August.
We're also helping over 3.2 million businesses and self-employed Canadians to keep their costs low by allowing them to defer GST, HST and customs duty payments. In addition, they can keep more money in their pockets over the next number of weeks and months because we're extending the tax filing deadline and allowing businesses to defer any payments, if they owe any, until August 31, again helping them keep their costs low so that they can have that extra flexibility to manage that cash flow.
To entrepreneurs across the country, we also know that covering your operating costs, like rent and utilities, is an incredible challenge right now, so through the Canada emergency commercial rent assistance, we've partnered with provinces and territories to reduce rent by 75% for businesses experiencing incredible hardships for the months of April, May and June, and starting next Monday, May 25, applications for the Canada emergency commercial rent assistance will be opened.
We know that business owners and landlords can work through those details now through the Canada Mortgage and Housing Corporation. Those details are already available, and they can start looking at them and be ready for when the application opens next week.
Rent, of course, is not an area of federal responsibility, but the success of businesses, frankly, is the responsibility of all of us, so we're working hard to make sure that this rent assistance support gets out as quickly as possible. We've also introduced a variety of lending supports available through banks and credit unions to help businesses with their cash flow.
One of these is the Canada emergency business account, or CEBA. Many of you know about this. It's a $40,000 interest-free loan with up to $10,000 forgivable if they're able to pay it back by the end of 2022, and to date this support has helped over 621,000 businesses and entrepreneurs across the country who have accessed it. It's helping our favourite restaurant to keep its lights on while also switching some of its operations to delivery service. It's helping that furniture store that relies on foot traffic to stay afloat so that it can keep paying the cost of its warehouse space. It means that the local bed and breakfast is maintaining its property even if its doors are temporarily closed. On Tuesday, just a couple of days ago, we announced that this CEBA loan will now be expanded and available to businesses that don't have a minimum $20,000 payroll.
That means that if you're a sole proprietor or a business that relies on contracts or a family-owned firm that pays its employees in dividends, you're now eligible. You need to have a business bank account, a CRA number under which you're filing your tax returns for 2018-2019, and non-deferrable expenses of between $40,000 and $1.5 million. These are non-deferrable expenses like rent, utilities, insurance, salaries, and that sort of thing.
We've certainly heard from the hair salon owners and stylists who rent chairs, the local chiropractor who has a practice but no employees, the farmer who pays himself in dividends but has to pay machinery costs and animal feed. This loan expansion is going to help not only those businesses but thousands more businesses to access this support.
We know that there's still more to do. For those businesses that operate out of a personal bank account and that are too new and have yet to file a tax return, we're working hard to make sure that we have a solution to help them as well through this challenging time. For larger businesses looking to get support through this difficult time, there are other liquidity supports, other loans that are available of up to $12.5 million, also available through financial institutions like banks and credit unions.
We know that all across the country, across every region, businesses need to be supported. Some are not supported through the programs that I just talked about, and because of that we've devoted almost a billion dollars to rural tourism businesses through the regional relief recovery fund, and we've also created supports to help indigenous-owned businesses, young entrepreneurs, innovative and high-growth firms, women entrepreneurs and many, many more.
Mr. Chair, our government has acted quickly. We've introduced broad measures to help small businesses from coast to coast to coast. These measures will help businesses weather the storm, but we know that the introduction of the measures is really just a first step and that businesses are going to continue to need help and support in order to weather this period and make it into the restart.
That's also why we created the Innovation Canada portal and the Business Canada app. It's so that small businesses can navigate through the many supports that we've introduced. We've also partnered with the Canadian Chamber of Commerce to create the Canadian Business Resilience Network so that owners of small businesses can truly get the support they need. It's more than being able to put money out; it's making sure that they also have the support and tools to be able to access the support properly to help them through this time.
I'd like to close by thanking the many small businesses that are providing essential services to our communities through this challenging time. My colleagues and I have heard countless stories of entrepreneurs and communities all across the country going beyond the call of duty and just giving back. I'm so impressed by the resilience of our incredible business owners and what they've done to help each other out through this difficult period. To those hard-working business owners, I want to say thank you.
Mr. Chair, we're all in this together. I appreciate this committee's support for the efforts during this difficult time. As I keep saying everywhere across the country on Zoom calls, just like the one we're having today, we're all here to help our small businesses survive this pandemic and pave the way for our economy to recover. We'll continue doing the hard work together to help save the small businesses of our hard-working Canadians and those jobs across the country.
I want to thank you for giving me the opportunity to speak to all of you today. I look forward to taking your questions.
Thank you very much.
