Extension to CEWS overlaps with new program as wage subsidies decline
The federal government has provided more details about its plans to spend $595 million to support employers’ hiring efforts as local economies re-open.
The Canada Recovery Hiring Program would be available to eligible employers that have experienced qualifying revenue declines. This would help them hire more workers, increase workers’ hours or increase wages. It would provide a subsidy of up to 50 per cent of eligible salary or wages.
“Our plan to extend business support programs and introduce the new Canada Recovery Hiring Program will help businesses support their workers through the final stretches of the pandemic and hire new workers at a pace that works for them,” says Chrystia Freeland, deputy prime minister and minister of finance. “By giving businesses certainty about their support in the weeks and months ahead, they will have the confidence they need to create jobs and invest in growth.”
The support would be available retroactively from June 6, 2021 to Nov. 20, 2021. Like with the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy, businesses would be able to access the program through the Canada Revenue Agency (CRA).
An employer's decline in revenues would be determined in the same manner as under the CEWS.
Nearly seven in 10 (69 per cent) of employers globally are struggling to find workers to hire for specific positions, marking a 15-year high, according to the ManpowerGroup.
Extension to CEWS
Bill C-30 also proposes to extend the CEWS, which interacts with the new proposed program. The programs overlap so that, as wage subsidy rates gradually decline, eligible employers would still be able to receive the maximum support from the new program this summer if they hire more workers or increase workers’ hours or wages.
The government previously said it wants to extend the CEWS and to gradually decrease the subsidy rate, beginning July 4, 2021, to ensure an orderly phase-out of the program.
Employers eligible for the CEWS would generally be eligible for the hiring program.
The types of remuneration eligible for the CEWS would also be eligible for the hiring program. Eligible remuneration generally includes salary, wages, and other remuneration for which employers are required to withhold or deduct amounts on account of the employee's income tax obligations. However, severance pay, stock option benefits, or the personal use of a corporate vehicle are not eligible.
Eligible remuneration for each eligible employee would be subject to a maximum of $1,129 per week paid for both the qualifying period and the baseline period.
Period 17 (June 6 to July 3, 2021) of the CEWS would be the first remuneration period of the new program. The baseline period is from March 14 to April 10, 2021. An eligible employer's decline in revenues would have to be:
- more than zero per cent, for the qualifying period between June 6, 2021 and July 3, 2021.
- more than 10 per cent, for qualifying periods between July 4, 2021 and November 20, 2021.