What’s to Come as Some COVID-Response Benefits End?

Beth Graddon

On October 21, just a whisper before  many of the pandemic support programs for individuals and business were set to expire two days later, including the Canada Recovery Benefit (CRB) and Canada Emergency Wage Subsidy (CEWS), the federal government announced some transitional provisions. Now, new targeted COVID-19 support benefits are being introduced. Read on for details:

Measures to Support Businesses

The existing Canada Recovery Hiring Program will be extended to May 7, 2022 for eligible employers with current revenue losses above 10%.  Good news:  the subsidy rate will increase to 50%.

In addition, targeted support will be available through two new programs:

• Tourism and Hospitality Recovery Program: which would provide support through the wage and rent subsidy programs to certain targeted industries such as  hotels, tour operators, travel agencies, and restaurants.  A subsidy rate of up to 75% is available with large revenue declines (75% or more); with reduced rates for businesses with lower declines.
• Hardest-Hit Business Recovery Program: which also would provide support through the wage and rent subsidy programs, but for other businesses that have faced deep losses.  Here  a subsidy rate of up to 50% is available.

Both programs will initially extend to November 20, 2021 under current government authority and then new legislation will be introduced to extend them until May 7, 2022, with a request for further authority to extend until July 2, 2022, if required.  From March 13, 2022 to May 7, 2022 the subsidy rates will decrease by half.

Further qualifiers:

• The subsidy will be based on average of all revenue decline percentages from March 2020 to February 2021 (claim periods 1-13), excluding Period 10 or 11.
• Periods not counted:  time when not carrying on business (ie seasonal business stops)

In the case of the Tourism and Hospitality Recovery Program there must be:

• An average monthly revenue reduction of at least 40% over first 13 qualifying periods for CEWS
• Current month revenue loss of at least 40%

In the case of the Hardest-Hit Business Recovery Program there must be:

• An average monthly revenue reduction of at least 50% over first 13 qualifying period for the CEWS
• Current month revenue loss of at least 50%

With both programs, businesses that face temporary new local lockdowns will be eligible for up to the maximum amount of the wage and rent subsidy programs, during the local lockdown, regardless of the level of losses over the course of the pandemic.

Measures to Support Individuals

• Canada Recovery Caregiving Benefit and Canada Recovery Sickness Benefit extended until May 7, 2022 and increase the maximum duration of benefits by 2 weeks. This would extend the caregiving benefit from 42 to 44 weeks and the sickness benefit from 4 to 6 weeks.
• Introduction of the new Canada Worker Lockdown Benefit which would provide $300/week in income support to eligible workers should they be unable to work due to local lockdown anytime between October 24, 2021 and May 7, 2022. This program will replace the Canada Recovery Benefit.

Additional educational resources: With the impact of these measures affecting small business owners and individuals alike this tax season, astute tax and financial advisors will be in demand. Get up to speed to help Canadians with these essential services at our next live, virtual event: the November 10, 2021 Virtual CE Summit. The theme will be Year-End Tax Planning with a focus on Investors and Owner-Managers.