October 23, 2021, marked the end of several COVID-19 government support programs including the Canada Emergency Wages Subsidy (CEWS), Canada Emergency Rent Subsidy (CERS) and the Canada Recovery Benefit (CRB). However, in response to pressure from businesses and industry groups, certain targeted subsidy programs have been introduced.
Tourism and Hospitality Recovery Program
The new Tourism and Hospitality Recovery Program (THRP) is intended to provide wage and rent subsidy support of up to 75% to certain organizations in the tourism and hospitality industry including hotels, tour operators, travel agencies, and restaurants. Additional details including a definition of businesses that qualify for this support will be provided in the near future.
To qualify for the program, eligible organizations must have:
- A current-month revenue loss of at least 40%, and
- An average monthly revenue reduction of at least 40% over the first 13 qualifying periods (12-months) for the CEWS.
Note that:
- The existing CEWS rules would continue to apply for the purposes of calculating the current-month revenue decline.
- The average monthly revenue decline would be calculated as the average of all revenue decline percentages for eligible organizations from March 2020 to February 2021 (i.e., CEWS claim periods 1-13).
- This calculation would not include periods that an entity was not carrying on its ordinary operations for reasons other than a public health restriction (such as because it is a seasonal business).
- Businesses would be eligible for wage and rent subsidies at a maximum rate of 75% from October 24, 2021, to March 12, 2022 (i.e., claim periods 22 to 26).
- The rent and subsidy rates would then be reduced by half from March 13 to May 7, 2022 (i.e., claim periods 27 and 28).
- The subsidy rates would start at 40% for eligible organizations with a 40% current-month revenue decline and then increase in proportion to current-month revenue decline up to a maximum rate of 75% for those with a current-month revenue decline of 75% or higher.
- Subsidy periods will follow the same 28-day cycle as the previous CEWS and CERS programs.
Hardest-Hit Business Recovery Program
The new Hardest-Hit Business Recovery Program is intended to provide up to 50% wage and rent subsidy support for eligible businesses that have faced deep losses.
Note that this program is only open to organizations that are not eligible for the Tourism and Hospitality Recovery Program. To qualify for this support, organizations must:
- Have a current-month revenue loss of at least 50%, and
- An average monthly revenue reduction of at least 50% over the first 13 qualifying periods (12 months) for the CEWS.
- The existing CEWS rules would continue to apply for the purposes of calculating the current-month revenue decline.
- The average monthly revenue decline would be calculated as the average of all revenue decline percentages for eligible organizations from March 2020 to February 2021 (i.e., CEWS claim periods 1-13).
Under this program, businesses would be eligible for wage and rent subsidies at a maximum rate of 50% from October 24, 2021, to March 12, 2022 (i.e., claim periods 22 to 26).
The rent and subsidy rates would then be reduced by half from March 13 to May 7, 2022 (i.e., claim periods 27 and 28). The subsidy rates would start at 10% for eligible organizations with a 50% current-month revenue decline and then increase on a straight-line basis to a maximum rate of 50% percent for those with a current-month revenue decline of 75% or higher.
Public health lockdown support
Also announced is new subsidy support for organizations subject to a qualifying public health restriction, regardless of sector. This support will be calculated at the same subsidy rates available under the Tourism and Hospitality Recovery Program.
To qualify must meet all of the following criteria:
- The public health restriction must cause the business to cease activities that accounted for at least approximately 25% of their total revenues during the prior reference period.
- The restriction must last for at least 7 days.
- The business must have one or more locations subject to the public health restriction
Applicants would not need to demonstrate a 12-month revenue decline to receive this support.
Increase to the monthly cap on eligible CERS expenses
A proposal to increase the aggregate monthly cap on eligible expenses that can be claimed under the CERS program to $1 million, including any amounts claimed by affiliated entities (an increase from $300,000), for the period starting on October 24, 2021. This new monthly cap would be available to all eligible businesses that meet the new eligibility requirements for the rent subsidy under the Tourism and Hospitality Recovery Program or the Hardest-Hit Business Recovery Program.
CHRP
The CRHP will be extended until May 7, 2022 (from November 20, 2021) for eligible employers with current revenue declines above 10% and increase the subsidy rate to 50% (from 20%), beginning October 24, 2021. In addition, the government proposed to introduce legislation to request authority to further extend the CRHP until July 2, 2022.
Under this extension, eligible businesses would still calculate incremental remuneration using the existing baseline period of March 14 to April 10, 2021. The existing eligibility rules would also continue to apply.
With the CRB (Canada Recovery Benefit) having ended on October 23, 2021, the federal government has announced the new Canada Worker Lockdown Benefit.
The government has proposed a new Canada Worker Lockdown Benefit (CWLB) that will provide $300 a week in income support to eligible workers whose employment is interrupted by government-imposed public health lockdowns.
Canada Worker Lockdown Benefit:
How much is the CWLB?
- Eligible applicants will receive $300 per week
- The benefit is accessible for the entire duration of a government-imposed public health lockdown
Who is eligible?
The CWLB is available to workers:
- That experience of work interruption is a direct result of a government-imposed public health lockdown.
- Regardless of whether they are eligible or ineligible for Employment Insurance (EI).
Who is not eligible?
Individuals whose loss of income or employment is due to their refusal to adhere to a vaccine mandate will not be able to access the benefit.
Can I also claim EI?
No. Workers who are eligible for EI can also be eligible for the CWLB, but they cannot claim both.
How long is the benefit available?
- The benefit comes into effect on October 24, 2021, and is available until May 7, 2022
- Retroactive applications are available to October 24, 2021, should the situation warrant it
How do I apply?
Full applications will be released by the Government of Canada in the upcoming weeks.
Recovery benefits extended
The government proposed extending the Canada Recovery Caregiving Benefit and the Canada Recovery Sickness Benefit until May 7, 2022 (from October 23, 2021). In addition, they proposed to increase the maximum duration of these benefits to 44 weeks (from 42 weeks) for the caregiving benefit and to six weeks (from four weeks) for the sickness benefit.