Honouring John Heinrichs

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Ottawa is trying to jump-start the jobs recovery with a new program that offsets a portion of employers’ labour costs. The Canada Recovery Hiring Program (CRHP) would run from June 6, 2021, to November 20, 2021, and cover as much as 50% of pay increments to workers, either through higher wages, more hours or new hires. The program is estimated to cost $595-million.

The CRHP is designed to work in conjunction with the CEWS. Their qualifying periods overlap, while an employer’s revenue declines – which are used to determine eligibility, along with subsidy rates in the CEWS – are calculated in the same way. Eligible employers would receive whichever subsidy is greater in value. Subsidy rates in the hiring program are held at 50% for the first three qualifying periods, eventually declining to 20% by the sixth and final period.

ELIGIBLE REMUNERATION

Similar to CEWS, CRHP would include salary, wages and other remuneration for which income taxes are withheld. Severance pay, stock option benefits and personal use of a car would be considered ineligible expenses. For a given week, the eligible remuneration is:

  • For arm’s length employees, the lesser of:
    • $1,129
    • Eligible remuneration in respect of the given week
    • If an employee on leave with pay, nil
  • For non-arm’s length employees, the lesser of:
    • $1,129
    • Eligible remuneration in respect of the given week
    • Baseline remuneration in respect of the given week
    • If an employee on leave with pay, nil.

Updated 07.06.2021

Introduced in the 2021 Federal Budget, the new Canada Recovery Hiring Program (CRHP) provides eligible employers with a subsidy of up to 50% on the incremental remuneration paid to employees between June 6, 2021, and November 20, 2021. The program will overlap with the Canada Emergency Wage Subsidy (CEWS) and is meant to help businesses grow again as the economy reopens due to hiring staff, increasing pay and/or shifts.

The CRHP subsidizes the incremental wages of an employee and compares the wages in a qualifying period to a base period which has been chosen as March 14 to April 10, 2021 (period 14 of CEWS). Therefore, if wages are consistent with the base period, CRHP will be nil.

Eligibility

Starting July 7, 2021, the CRHP applications are available to the same taxpayers as the CEWS; however, in the case of a corporation, only a Canadian-controlled private corporation (CCPC) will be eligible. In addition to CCPCs, eligible employers also include:

  • Individuals,
  • Non-profit organizations,
  • Registered charities, and
  • Certain partnerships (if at least half of the interest in the partnership is held by employers who are eligible for the CRHP).

For-profit corporations may be eligible for the CRHP only if they are:

  • Canadian-controlled private corporations, or
  • cooperative corporations that are eligible for the small business deduction.

To apply for the CRHP, eligible employers, or their payroll service provider, must have a Canada Revenue Agency (CRA) payroll account number on March 15, 2020.

Qualifying

To qualify for the CRHP, an eligible employer must have experienced a revenue decline in a qualifying period (determined in the same manner as under the CEWS). Furthermore, an eligible employer must have a revenue decline of more than 0% for period 17 or more than 10% for periods 18 to 22 to qualify.

An employer can choose to use the general approach (month-over-month comparison) or alternative approach (average of January and February 2020) to calculate their revenue decline, but the approach chosen must be consistent with the approach chosen for any previous CEWS and/or CERS claims the employer may have filed.

Additionally, eligible employers can claim the higher of the CEWS or the CRHP for a particular qualifying period, but not both. Since an eligible employer can choose to apply for either the CEWS or the CRHP for periods 17 to 20, they will need to determine which measure will be more beneficial in each period.

We will repeat it here: An eligible employer can claim either the CEWS or the CRHP for a qualifying period, not both.

The following are the overlapping time periods that eligible employers have the option of claiming either CEWS or CRHP:

Claim period Apply for
1 to 16 (March 15, 2020, to June 5, 2021) Only CEWS
17 to 20 (June 6 to September 25, 2021) Either CEWS or CRHP
21 and 22 (September 26 to November 20, 2021) Only CRHP

Summary of the Subsidy Periods:

Period # Revenue Subsidy period Deadline
CEWS CERS CRHP Current month ref. Prior month ref. Period start Period end Req’d revenue decline
11 4 December 2020 December 2019 December 20, 2020 January 16, 2021 July 15, 2021 > 0%
12 5 January 2021 January 2020 January 17, 2021 February 13, 2021 August 12, 2021 > 0%
13 6 February 2021 February 2020 February 14, 2021 March 13, 2021 September 9, 2021 > 0%
14 7 March 2021 March 2019 March 14, 2021 April 10, 2021 October 7, 2021 > 0%
15 8 April 2021 April 2019 April 11, 2021 May 8, 2021 November 4, 2021 > 0%
16 9 May 2021 May 2019 May 9, 2021 June 5, 2021 December 2, 2021 CRHP rate > 0%
17 10 1 June 2021 June 2019 June 6, 2021 July 3, 2021 December 30, 2021 50% > 0%
18 11 2 July 2021 July 2019 July 4, 2021 July 31, 2021 January 27, 2022 50% > 10%
19 12 3 August 2021 August 2019 August 1, 2021 August 28, 2021 February 24, 2022 50% > 10%
20 13 4 September 2021 September 2019 August 29, 2021 September 25, 2021 March 24, 2022 40% > 10%
21 14 5 October 2021 October 2019 September 26, 2021 October 23, 2021 April 21, 2022 30% > 10%
22 15 6 November 2021 November 2019 October 24, 2021 November 20, 2021 May 19, 2022 20% > 10%
* Prior month reference could alternatively be the average of January and February 2020
** CRHP wage base period is from March 14 to April 10, 2021
*** CRHP is based on incremental wages from the employee base period (March 14 to April 10 i.e. period 14) with a max of $1,129 per week

Summation of Key Points:

  • CRHP follows the same periods as CEWS/CERS starting period 17 of CEWS and goes up to period 22 (October 24 to November 20)
  • The revenue decline is calculated the same way as CEWS/CERS.
  • Can claim CEWS or CRHP for any qualifying period but NOT both.
  • You need to be a qualifying recovery entity:
    • CCPC’s,
    • Non-profit organizations,
    • Registered charities, and
    • Certain partnerships.
  • To qualify for period 17, you need more than a 0% revenue decline, for periods 18 to 22, you need more than a 10% revenue decline.
  • Both CEWS and CERS will now need at least a 10% revenue reduction to qualify from period 18 onwards.