Northern Business Relief Fund: Guidelines

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Objective

The Northern Business Relief Fund (NBRF) will provide support to northern SMEs impacted by the economic disruptions associated with COVID-19 through short-term relief for operational costs. The NBRF has been designed to be complementary to other federal/territorial/municipal initiatives.

The objective of the NBRF is to provide short-term relief to those businesses that have been most impacted and are the most vulnerable to permanent closure as a result of the economic disruptions associated with COVID-19. As a result, only those SMEs with a demonstrated liquidity need will be considered for funding.

Eligible recipients

Eligible recipients include all registered northern-based SMEs including sole-proprietors, partnerships and incorporated companies, provided they:

*Priority will be given to SMEs with fewer than 20 employees, but CanNor may consider applications from businesses with up to 100 employees.

Ineligible recipients include:

Eligible costs

The NBRF will provide qualifying SMEs with support for eligible fixed costs in the form of a non-repayable grant. The grant will cover a maximum period of 4 months, retroactive to April 1, 2020.

The minimum amount that may be claimed through the NBRF is $2,500, while the maximum amount eligible has been set at $100,000.

The NBRF will only support eligible fixed operating costs where these costs are not already covered by other federal, territorial or municipal programs.

CanNor contribution rate for eligible fixed costs
Eligible fixed costs CanNor contribution rate
Rent/Mortgage Up to 100% of each eligible fixed cost, to a maximum of $100,000 in total costs over the 4 month period;
provided the amount being requested does not allow the recipient to generate a profit from its participation in this relief program.
Utilities (heat; electric; water & sewer; phone & internet)
Subscriptions (for example, financial or booking systems)
Insurance
Other fixed costs as deemed reasonable at the sole discretion of CanNor

Ineligible costs

The following costs are deemed ineligible for support under NBRF:

The NBRF has been designed to provide support to SMEs with a demonstrated liquidity need. Applicants will be required to attest to the fact that the amount of support being requested from this and any other federal, territorial, municipal or other COVID-19 relief program is not expected to allow the recipient to generate a profit from its participation in this program.

Any amount claimed through the NBRF that would allow a recipient to generate a profit from its participation in this program will be deemed ineligible, and will need to be reimbursed by the recipient at the post-agreement verification stage. This calculation will also factor in any amounts claimed / revenue received by the recipient through other federal, territorial or municipal COVID-19 relief programs.

How the calculation works

Example 1: Timmy and Tammie are owner-operators of a flower shop in downtown Whitehorse, and have completely ceased operations as a result of COVID-19. Their fixed costs for rent, insurance, utilities, etc., are $9,000/month. Because they have zero revenues coming in at the moment, they are currently generating a $9,000/month deficit. As such, Timmy and Tammie would be eligible for reimbursement of 100% of eligible fixed costs under NBRF, for a total of $36,000 over a 4 month period.

Example 2: Billie and Bob own and operate a restaurant in downtown Yellowknife. Because of COVID-19, they have closed their dining room and are now only offering take-out, and as a result have laid off all but 2 employees. They have ongoing fixed costs (rent, insurance, utilities, etc.) of approximately $16,000/month, and a reduced weekly payroll (2 full-time employees + themselves) of $20,000/month; for a total of $36,000/month in expenditures. Meanwhile, their forecasted revenues for the 4-month period that started April 1 are approx. $28,000/month, which means they are anticipating an average deficit of $8,000/month.

As such, Billie and Bob would be eligible for reimbursement of 50% of their eligible fixed costs under NBRF (i.e. $8,000/month), for a total of $32,000 over a 4 month period.

It should be noted however that the above scenarios do not take into account the potential eligibility of these businesses under the Canada Emergency Wage Subsidy program, the Canada Emergency Response Benefit or any other current or future relief program not yet announced. Any amounts collected by a business under any such program will need to be disclosed to CanNor so that it can be factored into the calculation of the monthly operating deficit, and that the NBRF allocation can be adjusted accordingly.

Funding allocation

A total of $15M has been allocated under the NBRF in order to help support northern businesses across the three Territories.

Applications received as part of the NBRF will be treated on a first come, first served basis until such time as all of the funding has been exhausted. Payments will generally be issued in three installments: a first payment for April-May upon determination of eligibility and application approval, and subsequent payments on June 1 and July 1, 2020, as warranted.

The recipient will be responsible for informing CanNor of any change in circumstances/financial situation that might affect their eligibility for NBRF funding over the course of the agreement period.

How to apply

Eligible SMEs will be required to complete, sign and submit an Application-Agreement Form, which will include all relevant agreement, payment and final reporting clauses. Once an application has been deemed eligible by CanNor, this document will constitute the agreement between CanNor and the client. A copy will be returned to the client indicating the final amount that has been deemed eligible for funding.

In addition to the completed and signed Application-Agreement Form, applicants will need to ensure that they provide all required supporting documentation as indicated in the table below. Applications cannot be processed until deemed complete and all required documentation has been provided. Failure to provide all required documentation may lead to delays in the processing of your application, which will not be placed in the processing queue until such time as it is deemed complete.

A) Documentation required at the application submission stage

  1. Completed Application-Agreement form, including:
    • business number
    • forecasted operating costs and revenues
    • attestation relative to accuracy of information provided
    • agreement section signed by authorized representative
  2. Direct Deposit Form
  3. Detailed March-June 2019 General Ledger OR other documentation that can substantiate fixed costs being claimed (e.g. Copies of March 2020 monthly invoices)
  4. 2019 Income Statement or 2019 General Ledger Summary
  5. Articles of incorporation
  6. Lease/Mortgage agreement for commercial space, where applicable
  7. Franchise agreement, where applicable

B) Documentation required as part of the final report at the end of the agreement

  1. General Ledger or Income Statement for entire agreement period (April-July 2020)
  2. Copy of all invoices for fixed costs claimed for entire agreement period
  3. Copy of agreement and payments received from any other federal, territorial, municipal or other COVID-19 relief program, including:
    • Canada Emergency Wage Subsidy
    • EI Work Sharing Program
    • Government of Nunavut Small Business Support Program
    • Government of Yukon SME Relief Program

* CanNor reserves the right to request further information from an applicant in order to confirm that its meets all recipient and cost eligibility requirements. Applicants that are unable to clearly demonstrate that they meet all recipient and cost eligibility requirements will be rejected, with no right to appeal the decision.

Monitoring and ensuring compliance

Recipients of NBRF funding will be required to inform CanNor should their financial situation materially change, and/or should they decide to either re-open or permanently close their business at any time prior to the end of their agreement. Recipients will also be required to produce a final report at the end of their agreement that will include copies of invoices for all eligible costs incurred over the agreement period for final reconciliation.

Businesses will be required to repay any amounts paid under the NBRF that are deemed by CanNor not to meet the eligibility requirements. CanNor reserves the right to conduct an audit of recipients, including in cases of suspected fraud. Legal remedies for fraudulent claims could include reimbursement, prosecution of criminal charges, and fines. These consequences could apply to any SMEs that engage in artificial transactions to reduce revenue or inflate fixed costs for the purpose of claiming the NBRF.

CanNor reserves the right to amend these guidelines at any point in time, including the list of eligible and ineligible recipients and costs. CanNor also reserves the right to make exceptions to these guidelines in order to account for special circumstances, or where a doubt remains as to a business’s eligibility or need for relief funding.

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