AUS
NZ
UK
CA
USA
IND
In the wake of pandemic-induced lockdowns and stressed financials, private investment is under pressure for most companies. But Chrystia Freeland’s Federal Budget 2021 has enough elements to cheer businesses.
The federal budget hits the right spots in respect to public investment as well as short to medium term support to businesses.
Let’s take a look at some of key proposals.
©Kalkine Group 2021
CEWS, CERS & Lockdown Support
The flagship programs of Canada Emergency Wage Subsidy, Emergency Rent Subsidy and Lockdown Support provided a much-needed financial support to corporate Canada after COVID-19 disrupted national and global trade. Substantial government funds went into supporting businesses, small or large, via these schemes since March last year.
The fact that the country is yet to completely recover from the pandemic shock was considered in the budget, and led to an extension till September 25, 2021, for all the three programs.
Corporates reeling from subdued demand and revenue shortfall can use the federal support to not only pay wages but to also cover their rent and property expenses.
Financial Support To Small Businesses
Small businesses are often overshadowed by larger corporations when it comes to borrowing from financial institutions. While the bigger establishments can also raise additional capital from secondary markets, smaller firms are often elbowed out.
The federal government’s Small Business Financing Program aims to fill this gap for small enterprises. The budget presented on April 19 proposes to hike annual financing by C$ 560 million, a substantial sum considering the fiscal pressure on the Trudeau-led government. Intellectual Property and other intangible assets can be used as security to secure funding under this scheme.
The budget document says that nearly 3,000 additional businesses are set to gain from this proposal. This will likely lead to employment generation and demand creation.
©Kalkine Group 2021
Tech Adoption Funding
Pandemic-triggered lockdown restrictions that impacted trade and commerce have shone a light on the positive impact of technology in conducting day-to-day operations.
The Canada Technology Adoption Fund fills the void with respect to small businesses missing out on adopting new tech. Grants and interest-free financing will be available under this program to help move small firms into the digitally enabled world. In this process, the creation of new jobs in technical support space can also be expected.
The budget document says that the move will financially support up to 160,000 businesses.
Additional Measures
Federal Budget 2021 appears to have taken into account the needs of the sectors and groups that were affected the most by the pandemic. C$ 1 billion will go into revitalizing the severely hit tourism sector. Black Entrepreneurship Program and Women Entrepreneurship Strategy are targeted at black and women-led businesses with a total outlay of C$ 300 million.
