When filing for your most recent wage subsidies you may have noticed that there are now two sources of funding – the previous Canadian Emergency Wage Subsidy (CEWS) and the new Canada Recovery Hiring Program (CRHP). So, which is best for your business?
CEWS was a subsidy program put in place during COVID to enable businesses to rehire employees, prevent job loss and ease business back to normal operations.
Similarly, CRHP is a program that is available to businesses who have a qualifying revenue decline (more than 10% for periods 17 to 22) so that they can hire more people as the economy recovers.
For claims covering the claim periods 17 to 21 (June 6 until October 23), you will apply for the program that gives you the greatest subsidy. You can apply for a different subsidy each period, but you can never apply for both in the same period. After October 23, you will only be able to apply for CRHP.
So what exactly is the difference between CEWS and CRHP?
The largest difference between these programs is how CEWS and CRHP are calculated.
CEWS uses a variable rate based on the percentage of revenue decline that you experienced. CRHP uses a fixed rate of up to 50% of working employee wages up to a maximum of $1129 per week.
In addition, CRHP uses the increases in amounts paid to active employees in the current period compared to what was paid between March 14 and April 10. CEWS only considers the amount paid to employees in the current period. Other changes include not subtracting amounts received through work sharing for CRHP, and you cannot include employer paid portions of CPP/EI in your calculation.
The good news is, most employees who were eligible for CEWS will also be eligible for CRHP, except those who were on paid leave. And the eligibility criteria for CEWS and CRHP are the same except for for-profit corporations and partnerships. For profit corporations are only eligible if they’re:
- A Canadian controlled private corporation (CCPC)
- Eligible for the small business deduction
Partnership will be eligible where at least 50% of interest in the partnership are held by CRHP eligible employers.
While claim period 20 (August 29 to September 25) is now open, you can still apply for CRHP (or CEWS) for past periods. In fact, Period 17, which is the first period you can start claiming CRHP, doesn’t expire until December 30, 2021.
After you apply, you can expect to see a direct deposit within three to eight days. If you are receiving your subsidy by cheque, it will take the same amount of time plus mailing to receive your subsidy.
If you have any questions about CEWS, CRHP, the filing process or other COVID programs for Canadian businesses, contact us today.
