The choices contractors make in the coming weeks and months will be vital to minimizing the impact of the COVID-19 illness and the resulting pandemic crisis on your business. There is no shortage of articles, white papers, webinars and phone calls filled with advice, insights and solutions. How do you prioritize which areas to focus on and which solutions to deploy first to have the greatest mitigating impact on your operations? We understand your concerns and we want to help by providing a summary of what our experts believe are the best and most impactful solutions a contractor should review and implement.
1. Federal Government COVID-19 Support to Business– A consolidated access point of the following solutions:
- The Canada Emergency Wage Subsidy – A business that proves it has lost 30% of its previous period revenue will be able to access a 75% wage subsidy for up to $58,700 per employee (or $847 per week). This will be back-dated to March 15, 2020 and be available for 3 months. You can obtain further detail at the Canada Emergency Wage Subsidy website which in the near future will include the application process.
- The Business Credit Availability Program – Established March 13, 2020, this offering provides business with access to financing during these uncertain times. It is a combination of solutions from Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Access to funds will be absolutely necessary as revenue decrease due to slowdown/shutdown. This credit is extended through your existing financial institution so be prepared to evidence your creditworthiness – Aon can assist in preparing your application and validating your surety creditworthiness to ensure you obtain best terms.
- EDC Surety Bond Solutions – Ensuring you have access to necessary surety capacity will be vital to contractors over the next several months (and potentially years). Knowing how EDC can help you with surety capacity and letter of credit capacity (even for domestic projects) will ensure you have the ability to bid and execute the work. Aon has significant experience integrating EDC solution into your existing surety program.
- EDC Trade Credit Solutions- Getting paid will be crucial during the next several months as you seek as much liquidity to ensure you can cover the costs of your operations. EDC trade credit solutions could be helpful to your organization under the domestic deployment mandate. Trade credit solutions can also provide you with improved bank terms taking receivable margining from 75% to 90%.
2. Health and Safety Best Practices – There is an on-going debate over whether construction sites should be shut down or continue operating. Regardless of outcome, contractors should ensure jobsites are operating using the best operational practices to limit the risk of COVID19 infection and disruption. The Ontario Government published the following document no March 29, 2020. This document and other provincially issued documents will enable contractors to devise the ideal mix of jobsite best practices to ensure your company limits the risk of infection to employees and the public (and ensures your jobs remain open generating revenue).
3. Project Shutdown Best Practices and Checklist – This document was developed by Aon to help our clients ensure proper job shutdown either by choice or by government mandate. These best practices will minimize project and property risks during shutdown and after shutdown.
4. Project Extension Request Sheet – The COVID-19 pandemic will likely lead to several, if not all, of your projects being delayed. Maintaining proper insurance coverage for risk management purposes and to ensure compliance with project and finance contracts is critical. The form should be completed and sent to your broker to obtain the necessary shutdown extension.
5. Delays and Impacts – This document was published by a strategic partner of Aon in order to ensure our contractor clients are properly documenting the impact of the COVID19 crisis on their operations and their projects. Documentation will be key to prove any costs that might be recoverable from insurances, government programs, or recoveries from other project stakeholders.
We hope this short document is helpful to the Canadian contractor community and look forward to helping any companies within the Canadian construction community navigate through these difficult times.