COVID-19 – Canadian Tax and Business News, release #37
Our COVID-19 Canadian Tax and Business News updates are our way of informing our clients, friends and business associates with recent information that may help businesses and individuals while coping with the outcomes from the COVID-19 pandemic.
Our goal is to monitor the news and release relevant information as it becomes available.
The summary below is based on our understanding and interpretation of the announcements made by the government. The information below is in summary form and subject to change until the proposals are passed as legislation. Contact one of our professionals to discuss these matters in the context of your situation before acting upon such information.
New Targeted COVID-19 Support Measures
With the expiry of the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) on October 23, 2021, Finance announced on October 21, 2021, the introduction of two new targeted support programs that will provide wage and rent subsidies for the tourism and hospitality sectors as well as hard hit businesses. Current legislation provides the government the authority to introduce these new support measures until November 20, 2021. They are looking to implement future legislation to extend these new programs until May 7, 2022, with the authority to extend them further through regulations until July 2, 2022. Finance is also proposing a lockdown benefit for employees unable to work due to a public health lockdown.
Canada Worker Lockdown Benefit (CWLB)
Finance is a CWLB which will provide eligible employees $300 per week if their work has been interrupted due to a government imposed public health lockdown. Individuals whose loss of income or employment is due to their refusal to adhere to a vaccine mandate would not be able to access the benefit. Further details on this proposed benefit will be released in the coming weeks.
Tourism and Hospitality Support Program (THRP)
The THRP will provide targeted wage and rent support to selected sectors of the tourism and hospitality industry that continue to struggle during the pandemic. A formal definition of “qualifying businesses” will be announced by Finance soon but some examples of eligible organizations in the tourism and hospitality industry include hotels, restaurants, bars, festivals, travel agencies, tour operators, convention centres, convention and trade show organizers, and others.
Eligible businesses would be required to meet both of the following conditions to qualify for this program:
- An average monthly revenue reduction of at least 40% over the first 13 qualifying periods for the CEWS (12-month revenue decline calculated as the average of all revenue decline percentages for from March 2020 to February 2021 excluding claim period 10 or 11); and
- A current-month revenue loss of at least 40% compared to a prior reference period
When calculating the average monthly revenue decline, any periods where the business was not carrying on its ordinary operations (for example, because it is a seasonal business) must be excluded from this calculation. However, periods do not have to be excluded if the business operations were shut down due to a public health restriction.
Wage and Rent Subsidy Rates – THRP
| Current Month Revenue Decline | Periods 22 -26 Oct 24, 2021 – Mar 12, 2022 | Periods 27-28 Mar 13, 2022 – May 7, 2022 |
| 75% and over | 75% | 37.5% |
| 40%-74% | Revenue decline (i.e. if 60% revenue decline, 60% subsidy rate) | Revenue decline divided by 2 (i.e. if 60% revenue decline, 30% subsidy rate) |
| 0%-39% | 0% | 0% |
Hardest-Hit Business Recovery Program (HHBRP)
The HHBRP will provide targeted wage and rent subsidies to hard-hit organizations that do not qualify for the THRP and meet both the following eligibility requirements:
- An average monthly revenue reduction of at least 50% over the first 13 qualifying periods for the CEWS (12-month revenue decline similar to the THRP); and
- A current-month revenue loss of at least 50%.
Wage and Rent Subsidy Rates – HHBRP
| Current Month Revenue Decline | Periods 22 -26 Oct 24, 2021 – Mar 12, 2022 | Periods 27-28 Mar 13, 2022 – May 7, 2022 |
| 75% and over | 50% | 25% |
| 50%-74% | 10% + the revenue decline in excess of 50% x 1.6 (i.e. for a 60% revenue decline, 10%+[(60%-50%)*1.6] = 26% | 5% + the revenue decline in excess of 50% x 0.8 (i.e. for a 60% revenue decline, 5%+[(60%-50%)*0.8] = 13% |
| 0%-39% | 0% | 0% |
Lockdown Support
A 25% lockdown support will also be available to businesses forced to close due to a qualifying public health restriction. Support is pro-rated based on the number of days the business location was affected by the lockdown and will be available to affected organizations, regardless of sector. Eligible businesses will only need to demonstrate a current month decline to qualify.
Rent Subsidy Expense Cap
The current CERS provides a cap of $75,000 per business location per month and $300,000 in aggregate for all locations. The government is proposing to increase the aggregate monthly cap under the THRP and HHBRP from $300,000 to $1 million starting October 24, 2021.
Program Extensions
On October 21, 2021, Finance announced it would extend the Canada Recovery Caregiving Benefit (CRCB) and the Canada Recovery Sickness Benefit (CRSB) until May 7, 2022.
Finance has also proposed to extend the Canada Recovery Hiring Program (CRHP) to May 7, 2022, with a subsidy rate of 50%. More details on the CRHP can be found in our previous publications Wage and Rent Subsidy Update Periods 17-22 and 2021 Federal Budget Commentary.
Resources
Targeting COVID-19 Support Measures
Canada Worker Lockdown Benefit
News Release – Government announces targeted COVID-19 support measures to create jobs and growth
As we all try to stay safe, we need to remind ourselves business will get back to normal but in the meantime let’s all do our part to get to normal as soon as we can. If you have any questions or require further information, don’t hesitate to reach out to us.
Get in touch by email: info@fazzaripartners.com or phone: 905.738.5758
