Lockdown without Shutdown: The New Ontario Small Business Support Grant

 In Business Law

To prevent the province’s already-inundated hospitals from becoming further overwhelmed by the forecasted spike in COVID-19 cases due to holiday gatherings, the Ontario government has announced yet another province-wide lockdown, effective December 26, 2020 at 12:01am. Nearly all non-essential businesses in southern Ontario will be required to close their doors until January 23, 2021, and regions in northern Ontario will remain in lockdown until January 9, 2021.

Although the province is hopeful that the new lockdown will slow the spread of COVID-19, as was the case during the previous government-mandated lockdowns, there are significant concerns for the continued viability of Ontario’s small businesses. To help mitigate the negative financial implications of another lockdown on small businesses, the Ontario government has introduced the new Ontario Small Business Support Grant (“OSBSG”). The OSBSG will see $10,000 to $20,000 put into the hands of “eligible” small businesses that are adversely affected by the incoming lockdown. If a business receives this grant, there will be no restrictions on how it spends the money as long as it is spent to ameliorate the negative financial effects of the lockdown. This will hopefully ensure that affected small businesses remain viable during another significant period of decreased profits and beyond.

To be eligible for the OSBSG, a small business must have been forced to close or “significantly” restrict its services due to the incoming lockdown. Additionally, the business must have less than 100 employees and must have experienced at least a 20% decline in revenue in April of 2020 as compared to April of 2019. Notably, “significant” restrictions in service have yet to be defined.

Businesses not in operation in April of 2019 or 2020 will be provided with further eligibility criteria in January of 2021. At the same time, information on how to apply for the OSBSG for all eligible businesses will also be released. Importantly, non-eligible businesses include those that were already forced to close prior to “modified stage 2 measures” and essential businesses permitted to remain open with capacity restrictions (i.e. box stores, grocery stores, liquor stores, etc.).

The true scale of support offered by the OSBSG is yet to be seen. However, it is clear that the Ontario government is continually attempting to balance the impact of COVID-19 on both the healthcare system and small business. If you or someone you know is a small business owner or has an interest in a small Ontario business, the OSBSG may be a crucial support mechanism to take advantage of during these unprecedented and challenging times. More information on the OSBSG and on other government support for small businesses can be found here.

Thank you to Articling Student Filip Szadurski for writing this blog.   Jade Renaud, is a member of the Business Law team and can be reached at 613-369-0373 or at jade.renaud@mannlawyers.com.

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