I know we were all expecting to enjoy the holidays. But, due to Omicron, small businesses received another blow in their path to recovery. We wanted to discuss some of the federal wage subsidy programs. Because the government has made some extensions and changes to these programs. This information might change. But it will give you a guide and where you should investigate more. Please do seek professional advice because we are not covering every detail of the programs. Besides, you can combine it with some tax planning as we approach tax season.

The Canada Emergency Wage Subsidy (CEWS) finished on 23 October, 2021, and was replaced by:

– Tourism and Hospitality Recovery Program (THRP); and

– Hardest-Hit Business Recovery Program (HHBFP).

Also, the Canada Recovery Hiring Program (CRHP) was extended into 2022. So, there are three wage subsidies programs, up to May 7, 2022: CRHP; THRP; and HHBRP.

CRHP (extended to 7 May, 2022)

The CRHP program is extended to 7 May, 2022. The subsidy supports businesses that are: increasing the wages paid to existing employees; and wages paid to new hires. The eligibility criteria are:

– having a payroll account on or before March 15, 2020;

– being an eligible employer;

– meeting the revenue drop during the claim period; and

– having eligible employees during the claim period.

All businesses can access this program if it meets the eligibility criteria. The other programs have different eligibility requirements and are geared toward certain industries.

THRP (24 Oct, 2021 – 7 May, 2022)

The program was developed to support the tourism and hospitality industries. But, other businesses can qualify under the Local Lockdown Program route.

If you are an eligible organization, there are two ways you can qualify for THRP:

• Meet all three of the following conditions:
  • More than 50% of your eligible revenue comes from tourism, hospitality, arts, entertainment, or recreation activities this program supports;
  • You have a 12-month average revenue drop from March 2020 to February 2021 of at least 40%; and
  • You have a claim period revenue drop of at least 40%; or

• Qualify under the local lockdown program, regardless of sector, by meeting the following two conditions:
  • You were affected by a qualifying public health restriction; and
  • You have a claim period revenue drop of at least 40%.

HHBRP (24 Oct, 2021 – 7 May, 2022)

This program captures businesses that don’t qualify for the THRP but are hard hit by the pandemic. To qualify for the program:

• You have a 12-month average revenue drop from March 2020 to February 2021 of at least 50%; and
• You have a claim period revenue drop of at least 50%.

Local Lockdown Program

Refer to the second way to qualify for the THRP.

Conclusion

There are a couple of wage subsidy programs to support the hardest-hit businesses. These programs were being phased out as the programs moved further into 2022. But, with Omicron, this discussion has decreased. There are calculations involved so please reach out to us at Vanguard Accounting, CPA, and we’d be happy to discuss or seek other professional advice to ensure these programs are available to you.

Sources

https://www.canada.ca/en/revenue-agency/services/wage-rent-subsidies.html

https://www.cfib-fcei.ca/en/canada-recovery-hiring-program-crhp#eligibility-requirements