A group of bank and credit unions in three Ontario cities plan to offer interest discounts to businesses that hire people from some disadvantaged groups.
The "rate drop rebate" is aimed at businesses in the London, Hamilton and Ottawa areas, and is meant to boost employment of students with limited work experience, the long-term unemployed, the older unemployed, people with disabilities, newcomers to Canada and unemployed indigenous people.
The rebate program was developed by Social Capital Partners, a social finance organization founded by businessman and philanthropist Bill Young.
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"Rate Drop Rebate is a financial product that rewards Ontario's business owners for the steps they take to grow their operations, helping them save time and money and improve cash flow with a cash back interest rebate," Young said in a statement.
How it works
For every new employee hired through the program and retained for a minimum of six months, business owners will receive a cash back rebate equivalent to a one per cent reduction in the interest rate on their term loan up to a maximum interest rate reduction of four per cent. Alternatively, they could get the actual interest paid over six months on the business's line of credit up to a maximum of two years interest-free.
Young said the program is expected to help generate up to 1,100 new employment opportunities.
The rebate is being offered by Ontario's Ministry of Economic Development, Employment and Infrastructure in conjunction with Alterna Savings, CIBC, First Ontario Credit Union, Libro Credit Union and Meridian Credit Union.
In an interview Dianne Buckner, host of The Exchange on CBC News Network, Young said program was originally pioneered with Social Capital Partners providing 80 loans to small businesses. This time around, he said, SCP thought to get financial institutions and the government involved.