Government of Canada’s COVID-19 Economic Response Plan
We have reviewed the information that is available from the federal government, and our assessment of the proposed plan is that there is not enough in it to assist associations and not-for-profits. Further, we are very concerned about the time that will likely elapse before anyone in Canada receives cash from the proposed measures.
Proposed $100 Billion Stimulus Program
On March 19, 2020 the Globe and Mail published an article detailing a proposal from the Council of Canadian Innovators (CCI). CCI is urging the government and big banks to rapidly craft a $100-billion stimulus program for small and medium-sized businesses (SMBs).
The proposal involves financial institutions immediately providing forgivable zero or low-interest loans to their SMB clients to tide them over for the next six months. Banks would skip their normal loan-adjudication process to get cash out the door within days. The federal government would act as a backstop for the banks. At the end of six months, a loan would either be converted into a conventional bank lending facility with normal repayment terms or be purchased by the government at book value. For recipients still in financial difficulty, the government could forgive loans and treat them as grants.
A major benefit of the proposed program is that it could immediately get financial relief to organizations that need it now through established relationships with the banks. Obviously much remains to be worked out, but the proposal has significant merit and according to the Globe and Mail article has support from executives at three big banks if the federal government will back stop the loans.
Emergency Relief for Associations and NPO’s
We are of the opinion that the program proposed by the CCI would be of significant benefit to associations and not-for-profits requiring emergency relief. As such, in an effort to help, we are asking for your assistance to lobby the federal government to extend the program proposed by CCI to associations and not-for-profits.