COVID Relief Programs Update – June 2021
By Casey Murray, CPA, CA, LPA, Principal
Canada Recovery Hiring Program
In their April budget, the federal government announced the creation of a new Canada Recovery Hiring Program (CRHP). Bill C-30, the Budget Implementation Act is now before parliament. CRHP benefits will be available retroactively to June 6th and will run until November 20th, 2021.
The CRHP will provide employers with a subsidy of 50% of eligible salary or wages during its first three reporting periods (June 6 – July 3, July 4 – July 31, August 1 – August 28). The subsequent three reporting periods will provide a subsidy of 40%, 30% and 20%, respectively. With the declining subsidy rates, employers will be motivated to accelerate their hiring as the economy reopens.
The program will be available through the Canada Revenue Agency (CRA) and is open to Canadian-controlled private corporations, individuals, non-profit organizations, registered charities and certain partnerships. In general, employers who are eligible for the Canada Emergency Wage Subsidy (CEWS) will be eligible for CRHP as well. Eligible employers can apply for CRHP or CEWS each reporting period.
Eligible employers are required to have had a payroll account open with the CRA on March 15, 2020. For those who experienced qualifying revenue declines, the program can be used to hire more workers, increase the number of hours worked by existing staff or to increase wages. The program is not applicable to furloughed employees. Employee remuneration eligible for the program will be subject to a maximum of $1,129 per week.
A business’ revenue decline for CRHP will be calculated in the same way as for the CEWS. In general, under CEWS, revenue in a current calendar month is compared with revenue of the same calendar month, pre-pandemic.
More details on CRHP are available here.
Canada Emergency Wage Subsidy & Canada Emergency Rent Subsidy
The federal budget also proposed extending both the Canada Emergency Wage Subsidy (CEWS) & Canada Emergency Rent Subsidy (CERS) until September 25th, 2021. The approval of these extensions is included in Bill C-30, the Budget Implementation Act, which is now before parliament and awaiting Royal Assent.
The subsidy rate for CEWS for the additional four periods will gradually be reduced. The first additional reporting period (#17 which runs from June 6 – July 3) will have a maximum subsidy of 75% for businesses with a revenue decline of at least 70%. The maximum subsidy will decline to 60%, 40% and 20% for the remaining three reporting periods. The subsidy is made up of both a base portion and a top-up portion. After the first additional reporting period the base subsidy will require a minimum revenue decline of 10%.
For the four period extension of CERS, the maximum base rent subsidy of 65% of eligible expenses will remain in place for period #17 (June 6 – July 3). The subsidy will gradually decrease to 20% by period #20. The current 25% rate for the Lockdown Support will also remain in effect until September 25th, 2021. Similar to the CEWS, after the first additional reporting period eligibility for both the CERS and the Lockdown Support will require a minimum revenue decline of 10%.
Work-Sharing agreements have been extended until September 26, 2021. The agreements, which normally last up to 38 weeks, can now last up to 76 weeks. Work-Sharing is designed to help employers avoid layoffs when there is a temporary reduction in business activity. Eligible employees working reduced hours can receive EI benefits to supplement their lost income.
The Work-Sharing option is open to private and public companies, government enterprises and not-for-profits experiencing a reduction in business activity and/or revenue due to COVID-19. Businesses applying must operate year-round and have been operating for at least one year. Eligible employees can be permanent, full-time or part-time staff, and must be eligible for EI benefits.
More information on the Work-Sharing Program can be found here.