This summer looks to be shaping up.
COVID-19 case numbers are going down. Vaccination rates are going up.
As your province slowly reopens, you can look forward to reviving your small business and bringing back your staff. Perhaps, even hiring more workers if you need to.
To help businesses affected by the pandemic, the federal government announced a new Canada Recovery Hiring Program in the 2021 Budget.
This Program will provide a subsidy of up to 50 per cent of salary to eligible employers who have experienced qualifying revenue declines. The purpose of the Program is to enable employers to hire more staff, increase work hours, or raise wages.
The Canada Recovery Hiring Program (CRHP) would be available from June 6, 2021, to November 20, 2021.
Has CRHP opened for applications?
The Canada Recovery Hiring Program is part of Bill C-30, the Budget Implementation Act, which is currently before Parliament.
Support through the Program will be available retroactively once Bill C-30 receives Royal Assent.
How will the Program work?
Under the Canada Recovery Hiring Program, eligible employers would receive a subsidy of up to 50 per cent of incremental remuneration paid to eligible active employees between June 6, 2021, and November 20, 2021.
The federal budget also extended the Canada Emergency Wage Subsidy program until September 25, 2021. But, starting July 4, the wage subsidy rate would gradually decline.
The Canada Recovery Hiring Program will work in tandem with CEWS.
Period 17 of the CEWS would be the first period of CRHP. As the CEWS rates decrease, eligible employers could still receive support from CRHP.
Like with CEWS, eligible employers will receive support after each four-week period of CRHP.
What is the eligibility criteria for employers?
If you’re eligible for CEWS, you should generally be eligible for the Hiring Program as well.
To be eligible, employers must be:
- Canadian-controlled private corporations (including a cooperative corporation that is eligible for the small business deduction).
- Individuals, non‑profit organizations, registered charities, and certain partnerships.
- They would also need to have had a payroll account open with the Canada Revenue Agency on March 15, 2020.
What is the eligibility criteria for employees?
To be eligible, an employee must be:
- Primarily employed in Canada
- Actively employed throughout a qualifying period
Employees on leave with pay but not doing any work for the employer would not be eligible. (Such leave with pay does not include vacation leave, sick leave, or sabbatical.)
What would eligible remuneration include?
The remittance eligible for CEWS would also apply to CRHP. It includes salary, wages, and other compensation for which employers are required to withhold or deduct amounts on account of the employee's income tax obligations.
Please not that severance pay, stock option benefits, or the personal use of a corporate vehicle are not eligible costs under the Program.
How would an employer’s decline in revenue be determined?
To be eligible, an employer must show a revenue drop sufficient to qualify for the CEWS during a qualifying period.
If an employer applies during a period when CEWS is no longer in effect, they must prove a revenue decrease of more than 10 per cent. As such, an eligible employer's decline in revenues would have to be:
- More than 0 per cent, for the qualifying period between June 6, 2021, and July 3, 2021.
- More than 10 per cent, for qualifying periods between July 4, 2021, and November 20, 2021.
Revenue decline would be determined by comparing an employer's revenues in a current calendar month with revenues in the same calendar month before the pandemic.
Alternatively, you could also choose to compare your monthly revenues relative to the average of your January 2020 and February 2020 revenues.
But if you opted for the general approach for prior periods of the CEWS, you’d have to continue the same approach for CRHP. Similarly, if you chose the alternative approach for CEWS, you must continue the same for CRHP.
You must apply to CRHP no later than 180 days after the end of each qualifying period.
Please note that you can claim either CRHP or CEWS for a particular qualifying period, but not both.
Do you need help understanding the new rules around the Canada Recovery Hiring Program?
Our experts can help you develop company policies as well as with any other HR, health and safety, or employment advice you may need. See how we have helped other small and medium businesses get their business compliant with provincial legislation.
