On April 19, the federal government released the 2021 budget. In the budget, the government proposed additional support for businesses.
This includes extending the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) beyond the June 2021 end date, as well as introducing a new hiring program.
These programs are to help support businesses that were negatively affected by COVID-19 across Canada.
Canada Emergency Wage Subsidy (CEWS)
The CEWS program is the largest program available to Canadian business. It’s estimated cost in fiscal year 2020 – 2021 was $84.6 billion.
The budget proposes to extend the program until September 25, 2021 with an additional $26 billion in spending. This will generate four additional qualifying periods.
- June 6 to July 3, 2021
- July 4 to July 31, 2021
- August 1 to August 28, 2021
- August 29 to September 25, 2021
As of July 4, recipients will see a gradual reduction in the program's rates. The rates will be 75% of the current maximum benefit in the qualifying period beginning July 4. By the final qualifying period, recipients will receive up to 20% of the current maximum benefit.
As of July 4, eligibility will also be limited to companies that saw a decline in revenue greater than 10%. And the subsidy rate will be adjusted based on the amount of revenue decline each individual recipient experienced.
The budget also proposed changes for certain publicly traded companies under the program.
They will be required to pay back the subsidy received after June 5, 2021 if the aggregate compensation for specified executives in 2021 exceeds the aggregate compensation in 2019.
Specified executives include named executive officers whose information is disclosed in the annual circular. The clawback is equal to the lesser of subsidy amounts received and the difference between 2019 and 2021 numbers.
Canada Emergency Rent Subsidy (CERS)
The CERS program provides support to tenants and property owners. So far, the estimated cost of the program has been $4.1 billion.
The government is also proposing to extend this program until September 25, 2021 (same qualifying periods as CEWS) and they’re adding an additional $4.3 billion in subsidies. The current maximum base rate for the subsidy is 65%. It will remain 65% until July 3 and then will gradually reduce down to 20% in the final qualifying period (August 29 to September 25).
As of July 4, eligibility will also be limited to companies that saw a decline in revenue greater than 10%.
Canada Recovery Hiring Program (CRHP)
The CRHP is a new program being introduced June 6 until November 20. The qualifying periods are as follows:
- June 6 to July 3, 2021
- July 4 to July 31, 2021
- August 1 to August 28, 2021
- August 29 to September 25, 2021
- September 26 to October 23, 2021
- October 24 to November 20, 2021
It will give eligible employers up to 50% of incremental remuneration paid to eligible employees. This rate will also decline gradually until the end of the program on November 20. This will help offset the costs employers incur as they reopen by increasing wages, hours worked or number of staff.
To be eligible, the employer must have had a decline in revenues equal to that needed to qualify for CEWS.
Program rates and end dates will be reviewed as the course of the pandemic changes.
For more information on these programs and help determining which programs you’re eligible for, please contact Koroll & Company today.
