There have been various subsidies announced and distributed since the start of the pandemic in March 2020. Some have targeted businesses and employers, enabling them to keep staff working or paid while businesses were shut down, or operating at reduced capacity. Other subsidies have been paid to individuals who were unable to work due to illness, or because they had been laid off from work. Now that the population is largely vaccinated and infection rates across the country are relatively low, many businesses are returning to pre-pandemic operations. In response to this, the federal and provincial governments have opted to make significant changes to the various subsidy programs, and the rules around entitlement.
On October 21, the federal government released a statement reviewing changes to various supports for both individuals and businesses. Existing programs, including the Canada Recovery Benefit and the Canada Emergency Wage Subsidy, have ended as of October 23, and are being replaced with more strategic efforts. Below, we will provide an overview of the recent and upcoming changes so you and your business can prepare.
An Overview of the Changes
Overall, the changes involve narrowing the focus of various supports, to target support where it’s most needed to “create jobs and spur economic growth” and better manage government spending. These changes include:
Replacing the Canada Recovery Benefit with the Canada Worker Lockdown Benefit, available to workers whose jobs have been impacted by government-imposed public health lockdowns.
Extending the Canada Recovery Caregiving Benefit and the Canada Recovery Sickness Benefit until May 2022.
Extending the Canada Recovery Hiring Programs to May 2022.
Implementing new target supports for specific industries with the following supports:
The Tourism and Hospitality Recovery Program
The Hardest-Hit Business Recovery Program
Businesses subjected to temporary, local lockdowns will continue to be eligible for the Canada Emergency Wage Subsidy and the Canada Rent Subsidy Program
Subsidies for Individuals
Canada Response Benefit (CRB) Ending & Being Replaced with the Canada Worker Lockdown Benefit
The Canada Response Benefit, which provides eligible recipients with up to 54 weeks of income support, has ended. The final two-week installment was paid out for the period beginning on October 23, 2021. The last payment will be in mid-November. The program was aimed at individuals who were unable to qualify for Employment Insurance (EI) benefits, either because they had exhausted their entitlement, or because they were self-employed and therefore not entitled to EI benefits.
Replacing this program is the Canada Worker Lockdown Benefit. The benefit will be available to workers across the country who are unable to perform their jobs due to restrictions imposed by government-mandated lockdowns. The details of the benefit are as follows:
The benefit will provide impacted workers with $300 per week and is available for the period between October 24, 2021, and May 7, 2022.
The benefit will be provided for the entire duration of the lockdown, until May 7, 2022.
The benefit is available to workers who are entitled to Employment Insurance, as well as workers who are not, such as self-employed individuals.
Notably, the benefit will not be provided to workers who experience a loss of income as a result of refusing to adhere to a vaccine mandate at their workplace.
Caregiver and Illness Subsidies Extended
Both the Canada Recovery Caregiving Benefit and the Canada Recovery Sickness Benefit are extended to May 7, 2022. Further, the maximum entitlement has been extended by two weeks.
The Canada Recovery Caregiving Benefit provides $500 per week for up to 44 weeks, to individuals who cannot work for at least half of their weekly work schedule because they are caring for a family member at home. The care may be for a child who is unable to attend school or daycare because of closures due to COVID-19, or for a family member is sick or self-isolating or at high risk of serious complications due to COVID-19.
The Canada Recovery Sickness Benefit provides $500 per week for a maximum of 6 weeks to individuals who are unable to work for at least half of their weekly schedule for one of the following reasons:
They contracted COVID-19
They are self-isolating due to COVID-19
They have underlying conditions, are undergoing treatments, or have another illness that puts them at greater risk of serious complications from COVID-19.
Subsidies for Businesses
Canada Recovery Hiring Program
The Canadian government has opened up a new program called Canadian Recovery Hiring Program (CRHP). This program and the Canada Emergency Wage Subsidy (CEWS) support employers by helping them to pay employee wages through different phases of their economic recovery. For each claim period between June 6, 2021, and October 23, 2021, eligible employers can claim either CRHP or CEWS, whichever is higher. For the claim period between October 24, 2021, and November 20, 2021, only CRHP is available.
Eligibility criteria for CRHP is the same as CEWS, but there are some restrictions. For-profit corporations are eligible only if they are a Canadian-controlled private corporation, are eligible for the small business deduction, or are a partnership where at least 50% of interests are held by employers eligible for the CRHP.
There are further supports being made available to provide subsidies to industries that have been particularly impacted by business closures and lockdowns. Both programs below are available until May 7, 2022, with the benefit amount set to decrease by half on March 13, 2022.
Tourism and Hospitality Recovery Program
The benefit will be available to businesses in the tourism or hospitality industries, including:
- Travel agencies
- Tour operators
- Convention centres
To qualify for the bene3fit, an organization must demonstrate it meets the following criteria:
- It must have seen an average monthly reduction in revenue of at least 40 percent over the first 13 periods of the Canada Emergency Wage Subsidy; and
- It must have a loss of at least 40 percent of revenue in the current month.
The benefit would be paid out as follows:
Hardest-Hit Business Recovery Program
This benefit is meant to provide support to severely impacted businesses that do not qualify under the Tourism & Hospitality Benefit. In order to qualify, a business must be able to demonstrate they meet the following criteria:
- It must have seen an average monthly reduction in revenue of at least 50 percent over the first 13 periods of the Canada Emergency Wage Subsidy; and
- It must have a loss of at least 50 percent of revenue in the current month.
The benefit will be paid out as follows:
Contact Edelkoort Smethurst Schein CPAs LLP for Experienced Advice on Personal and Business Subsidies Related to COVID-19
Determining your eligibility for the above subsidies can be complex, particularly for businesses that experienced a drop in revenue due to the pandemic. The tax and business advisors at Edelkoort Smethurst Schein CPAs LLP can help you identify which subsidies you may qualify for, and for which periods. Contact us today by phone at 905-517-2297 or reach out online.