On October 21, 2021, two days before most of the Federal government’s COVID-19 recovery programs were set to expire on October 23^rd, Deputy Prime Minister and Finance Minister Chrystia Freeland announced the expansion of these programs under a more targeted approach.  This announcement was subsequently supported by information published by the Department of Finance on their website.

The expansion of these targeted programs falls under two broad categories:

• Support for employers, and
• Support for individuals

SUPPORT FOR EMPLOYERS

The government proposes to extend the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) beyond the October 23 expiration date. The extension of these broad-based recovery programs will be repurposed to help specifically targeted industries and businesses. The two specifically targeted programs are:

1. The Tourism and Hospitality Program, and
2. The Hardest-Hit Business Recovery Program

The Tourism and Hospitality Program

Support would be targeted to organizations in selected sectors of the tourism and hospitality industry that have been deeply affected since the outset of the pandemic and that continue to struggle.

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 organizations would be required to meet the following two conditions to qualify for this program:

• An average monthly revenue reduction of at least 40 percent over the first 13 qualifying periods for the Canada Emergency Wage Subsidy (12-month revenue decline); and
• A current-month revenue loss of at least 40 percent.

The 12-month revenue decline would be calculated as the average of all revenue decline percentages for eligible organizations from March 2020 to February 2021 (claim periods 1-13, excluding claim period 10 or 11). The existing rules would continue to apply for the purposes of calculating the current-month revenue decline.

The wage and rent subsidiary rate for this program would be based on the current month revenue decline as outlined in the below table

Hardest-Hit Business Recovery Program

Hard-hit organizations that do not qualify for the Tourism and Hospitality Recovery Program and that have been deeply affected since the outset of the pandemic would qualify for rent and wage support under the Hardest-Hit Business Recovery Program, provided they meet the following two eligibility requirements:

• An average monthly revenue reduction of at least 50 percent over the first 13 qualifying periods for the Canada Emergency Wage Subsidy (12-month revenue decline); and
• A current-month revenue loss of at least 50 percent.

The calculation of the 12-month revenue decline would follow the same rules as under the Tourism and Hospitality Recovery Program, as detailed above. The existing rules would continue to apply for the purposes of calculating the current-month revenue decline.

The wage and rent subsidiary rate for this program would be based on the current month revenue decline as outlined in the below table

An additional change to the rent subsidy, as introduced under these new programs will see an increase in the aggregate monthly cap from $300,000 to $1 million (including any amounts claimed by affiliated entities) starting on October 24, 2021. This new monthly cap would be available to all eligible employers and organizations that meet the new eligibility requirements for the rent subsidy under the Tourism and Hospitality Recovery Program and the Hardest-Hit Business Recovery Program.

Public Health Lockdown support

Organizations that don’t fall under either of these programs may still qualify for a rent and wage subsidy if the organization is subject to a public health restriction. The subsidy rate would be calculated using the rate structure set for the Tourism and Hospitality Recovery Program.

An organization has a public health restriction if they have one or more locations (lasting for at least seven days in the current claim period) that requires them to cease activities that accounted for at least approximately 25 percent of total revenues of the employer during the prior reference period. Applicants subject to a public health restriction do not have to demonstrate the 12-month revenue decline, only a current-month decline.

Canada Recovery Hiring Program

The Canada Recovery Hiring Program is set to expire on November 20, 2021. The government is proposing to extend the program until May 7, 2022 (period 28) and increase the subsidy rate to 50 per cent for all periods including the already existing period 22 (October 24 to November 20, 2021), which is currently at 20 per cent. With this extension, the government proposes to establish the legislative authority to further extend the program through regulations until July 2, 2022, if necessary.

SUPPORT FOR INDIVIDUALS

Canada Recovery Caregiving Benefit

The government proposes to extend this benefit until May 7, 2022 and increase the maximum duration of benefits by two weeks.  This would extend the caregiving benefit from 42 to 44 weeks.

Canada Recovery Sickness Benefit

The government proposes to extend this benefit until May 7, 2022 and increase the maximum duration of benefits by two weeks.  This would extend the sickness benefit from 4 to 6 weeks.

Canada Worker Lockdown Benefit

The government is not planning to extend the Canada Recovery Benefit program and instead is proposing to introduce a new program called the Canada Worker Lockdown Benefit, which would provide income support to workers whose employment is interrupted by specific government-imposed public health lockdown scenarios and who are unable to work due to such restrictions.

The new benefit would be:

• $300 a week.
• Strictly available to workers whose work interruption is a direct result of a government-imposed public health lockdown.
• Available until May 7, 2022, with retroactive application to October 24, 2021, should the situation warrant it.
• Accessible for the entire duration of a government-imposed public health lockdown (up until May 7, 2022).
• Available to workers who are ineligible for Employment Insurance (EI) and those who are eligible for EI, as long as they are not paid benefits through EI for the same period.

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.

Legislative Authority

Further details of these announced proposals will be released by the Department of Finance in the coming weeks and will be subject to legislative approval through the House of Commons and Senate. The first session of the 44^th Parliament is not scheduled to open until November 22, 2021. Baker Tilly will be following this legislative authority process and provide updates as they become available.