Government Launches Ontario Small Business Grant
The provincial government has launched the Ontario Small Business Support Grant (“OSBSG”) to support businesses affected by the province’s COVID-19 restrictions. This grant is intended to provide financial aid to those small businesses that were required to close or significantly restrict services due to the provincewide shutdown commencing on December 26, 2020. Eligible businesses can receive between $10,000 and $20,000 in funding to finance their operations.
Eligible businesses are those meeting the following requirements:
- Have less than 100 employees including full-time, part-time and seasonal workers;
- Required to close or significantly restrict services under the province wide shutdown starting on December 26, 2020;
- Experienced a minimum of a 20% revenue decline when comparing April 2020 to April 2019 monthly revenues (other comparable months available); and
- Operating on or before December 24, 2020. Businesses can include corporations, unincorporated proprietorships, partnerships, charities, non-profit organizations, or any other type of entity operating a business in Ontario.
The OSBSG is shared among affiliated businesses, with affiliation defined as direct or indirect common control. In addition, both the employee count and revenue decline test are calculated on an affiliated group basis.
Businesses that were already required to close prior to the introduction of the modified Stage 2 public health measure on October 10, 2020, essential
businesses permitted to continue operating, and business owned by the federal, provincial, or a municipal government, or by a person holding federal or provincial office are not eligible.
In addition, if an enterprise has any affiliates on April 30, 2019, and it, together with its affiliates, had 100 or more employees on that date, then neither the enterprise nor any of its affiliates are eligible for the OSBSG.
Revenue Decline Test
For the 20% revenue decline test, revenues include amounts attributable to the Ontario operations for the applicant and its affiliates. All entities that are affiliated as of December 24, 2020 are included in the revenue decline test. An entity’s revenue for the purposes of the OSBSG is its revenue from its ordinary activities in Ontario earned from arm’s-length sources, determined using its normal accounting practices. Revenues from extraordinary items and amounts on account of capital are excluded.
All applicants must use monthly revenues when determining the revenue decline. Businesses that began operations after April 2020 may still be eligible as alternative revenue decline comparable months are available in the application process. Seasonal winter business will have their revenue decline calculated by comparing the month of higher revenue, selected from December 2019 or January 2020, compared to December 2020.
Applications are now open and can be made directly on the province of Ontario’s grant application website, https://www.app.grants.gov.on.ca/msrf/#/. Applicants will need details on their revenue decline, number of employees, and necessary banking information. Applicants will also require a CRA business number to apply. However, if the business does not have a CRA business number, they will be given an opportunity to apply for a CRA business number before submitting the application. Once the application is submitted and approved, the eligible business can expect to receive payment within approximately 10 business days. As all applications could be subject to audit or verification, applicants are reminded to retain appropriate records and supporting documents. The application deadline is March 31, 2021.