Canada Recovery Hiring Program – Subsidy on Increases to Payroll Between June 6 to November 20, 2021

 

Canada Recovery Hiring Program

The Canada Recovery Hiring Program is available to support businesses between June 6, 2021 through May 7, 2022 with subsidies of up to 50% of payroll increases in a period, over a base amount. That means as businesses hire new employees or increase hours/wages of their workers, this increase in payroll could be partially subsidized.

Businesses apply for the subsidy after the conclusion of each 4-week period, similar to how the federal wage and rent subsidies work.   You can apply for either the Canada Recovery Hiring Grant or the Canada Emergency Wage Subsidy, but not both.   Full details and applications are available online.     Questions?  Contact us to discuss. 

 How it Works

  • Business determine what their baseline payroll was for the “baseline period” of March 14 to April 10, 2021 for arm’s length employees (most employees, not related to business owner)
    • This would include salary, wages, commissions and other remuneration paid during this period, up to a maximum of $1129 per employee, per week
    • Eligible employees are those who were actively employed by you, in Canada, during either the base or application periods  (see definition).  This does NOT include employees on leave with pay.
    • For non-arm’s-length employees (business owner and their spouses, siblings, children, etc , you also need to calculate their pre-COVID base pay
  • Then, for each “qualifying period” of the program, the business would determine if they payroll had increased compared to their baseline
  • If their payroll increased, and they meet the revenue decline thresholds noted below, then they can apply for a subsidy of up to 50% on the incremental increase to their payroll
    • The subsidy rate begins at 50% for the first two periods, and then declines to 20%.  The government increased the subsidy back to 50% for the periods of the program from October 24 onwards. See the details below.
  • Applications will be made online through the government’s site

Business Eligibility

  • Business Type:  Eligibility aligns largely with the Canada Emergency Wage Subsidy, so if you are eligible for that then this program will likely be open to you
    • Includes employers which are:
      • individuals, corporations, registered charities, partnerships (where the partners are eligible employers), non-profit organizations, agricultural organizations, labour organizations or societies, benevolent or fraternal benefit societies or orders, and registered charities
        • In addition, the following criteria also apply
          • Corporations must be Canadian-Controlled Private Corporations
          • Cooperative Corporations must be eligible for the small business deduction
          • Partnerships must have 50% of their interests held by parties eligible for the program
  • Revenue Declines:
    • Must have some level of gross revenue declines (more than 0%) for the period June 6, 2021 to July 3, 2021.
    • For the rest of the periods (July 4, 2021 and November 20, 2021) the organization must have gross revenue declines of more than 10%
    • The comparison for determine revenue declines is the same as the wage subsidy, and businesses can use either the general approach (current month against the same month in 2019) or the alternative approach (current month against the average of Jan/Feb 2020)
    • You must use the same approach you have used for the wage subsidy applications, if applicable.

Subsidy Period Dates, Rates, and Comparisons

Period: 17
Dates: June 6 – July 3, 2021
Required Revenue Declines:  > 0%
Rate of Subsidy on Increase to Payroll:  50%
Comparison for Determining Revenue Declines (general approach): June 2021 over June 2019 or May 2021 over May 2019
Comparison for Determining Revenue Declines (alternative approach): June 2021 or May 2021 over average of January and February 2020

Period:  18
Dates:  July 4 to July 31, 2021
Required Revenue Declines:  > 10%
Rate of Subsidy on Increase to Payroll:   50%
Comparison for Determining Revenue Declines (general approach):  July 2021 over July 2019 or June 2021 over June 2019
Comparison for Determining Revenue Declines (alternative approach):   July 2021 or June 2021 over average of January and February 2020

Period: 19
Dates:  August 1 to August 28, 2021
Required Revenue Declines:  > 10%
Rate of Subsidy on Increase to Payroll:   50%
Comparison for Determining Revenue Declines (general approach):    August 2021 over August 2019 or July 2021 over July 2019
Comparison for Determining Revenue Declines (alternative approach):  August 2021 or July 2021 over average of January and February 2020

Period: 20
Dates:  August 29 to September 25, 2021
Required Revenue Declines:  > 10%
Rate of Subsidy on Increase to Payroll:   40%
Comparison for Determining Revenue Declines (general approach):   September 2021 over September 2019 or August 2021 over August 2019
Comparison for Determining Revenue Declines (alternative approach):  September 2021 or August 2021 over average of January and February 2020

Period: 21
Dates:  September 26 to October 23, 2021
Required Revenue Declines:  > 10%
Rate of Subsidy on Increase to Payroll:   30%
Comparison for Determining Revenue Declines (general approach):   October 2021 over October 2019 or September 2021 over September 2019
Comparison for Determining Revenue Declines (alternative approach):  October 2021 or September 2021 over average of January and February 2020

Period: 22
Dates:  October 24 to November 20, 2021
Required Revenue Declines:  > 10%
Rate of Subsidy on Increase to Payroll:   50%
Comparison for Determining Revenue Declines (general approach):  November 2021 over November 2019 or October 2021 over October 2019
Comparison for Determining Revenue Declines (alternative approach):  November 2021 or October 2021 over average of January and February 2020

Periods: 23 and onwards

Details to come, but the subsidy rate will be set at 50%