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May 19, 2020

Federal Government Expands Eligibility for the Canada Emergency Business Account (CEBA)

Authors Hendrik Nieuwland and Domenica Moran

Today, Prime Minister Justin Trudeau announced that eligibility for the Canada Emergency Business Account (CEBA) will be expanded to capture many owner-operated small businesses to help them weather the COVID-19 pandemic.

The CEBA provides eligible businesses with up to $40,000 in interest free loans for the first year to cover non-deferrable operating costs.  Businesses that can repay the balance of the loan on or before December 31, 2022 will receive loan forgiveness of 25% (up to $10,000).  We previously discussed the CEBA, including more detailed eligibility requirements, here

The CEBA program will now be available to 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.  For instance, hair salon owners with stylists who rent chairs, or gym owners that contract trainers, may now be eligible for the CEBA.

To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:

  • a business operating account at a participating financial institution;
  • a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return; and,
  • eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses may include costs such as rent, property taxes, utilities, and insurance.


Expenses will be subject to verification and audit by the Federal Government.  More details on how to apply under this new criteria are expected to be released soon.   

Our firm will continue to provide you with updates as the Federal Government’s response to the COVID-19 pandemic evolves.

The foregoing is for informational purposes only and should in no way be relied upon as legal advice. For legal advice tailored to your circumstances and business, please contact any of SOM LLP’s lawyers by email or telephone.

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