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Cabinet officials

Canada Launches Highly Affected Sectors Credit Availability Program for Businesses Impacted by COVID-19

Strategic Insights

— 2 min read

As the COVID-19 pandemic continues to affect businesses across Canada, the Government of Canada has announced the launch of the Highly Affected Sectors Credit Availability Program (HASCAP) to provide financial support to hard-hit businesses. The program, as outlined in the 2020 Fall Economic Statement, will offer government-guaranteed, low-interest loans of up to $1 million, and up to $6.25 million for businesses with multiple locations under one related entity. This support is aimed at helping businesses with their day-to-day operating costs and enabling them to invest in their longer-term prosperity.

Key Takeaways:

  • The Highly Affected Sectors Credit Availability Program (HASCAP) provides financial support to businesses that have been hardest hit by the pandemic, with government-guaranteed, low-interest loans of up to $1 million, and up to $6.25 million for businesses with multiple locations under one related entity.
  • Eligible businesses must show a year-over-year revenue decline of at least 50% in three months, within the eight months prior to their application, and have previously applied for either the Canada Emergency Wage Subsidy or the Canada Emergency Rent Subsidy.
  • HASCAP is available to businesses across Canada, in all sectors, including restaurants, tourism and hospitality, and those that rely on in-person service.
  • The program will enable businesses to receive support from participating Canadian financial institutions, and eligible businesses can start applying as early as February 1 at principal financial institutions and more widely by February 15.
  • The program is part of the Government of Canada's COVID-19 relief package, which includes major programs such as the Canada Emergency Wage Subsidy, the expanded Canada Emergency Business Account, and the Regional Relief and Recovery Fund.
  • The Deputy Prime Minister and Minister of Finance, Chrystia Freeland, emphasized the importance of supporting businesses, especially those in heavily affected sectors, to help them weather the storm and be ready for a robust recovery.

Statistics:

  • The Government of Canada has introduced the largest relief package in Canadian history to support Canadians during the COVID-19 pandemic.
  • The Canada Emergency Wage Subsidy (CEWS) has been extended until June 2021 and covers up to 75% of payroll.
  • The expanded Canada Emergency Business Account (CEBA) provides an interest-free loan of up to $60,000 with 25% forgivable if repaid by December 31, 2022.
  • The Canada Emergency Rent Subsidy (CERS) has been extended until June 2021 and covers up to 65% of rent, with an additional 25% for businesses subject to a public health order shutdown.
  • The Regional Relief and Recovery Fund (RRRF) has more than $2 billion to support small businesses across Canada that have been unable to access existing relief measures.

Sources:

  • News release from the Business Development Bank of Canada (January 28, 2021)
  • Quotes from The Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade, and The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance.

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