Canada Recovery Hiring Program
The Federal Budget 2021 introduced the new Canada Recovery Hiring Program to provide eligible employers with a subsidy of up to 50 per cent on the incremental remuneration paid to eligible employees between June 6, 2021, and November 20, 2021.
An eligible employer would be permitted to claim either the hiring subsidy or the Canada Emergency Wage Subsidy (“CEWS”) for a particular qualifying period, but not both.
Canadian Controlled Private Corporations eligible for the CEWS would generally be eligible for the hiring subsidy. Other eligible employers would include individuals, non-profit organizations, and certain partnerships.
Eligible employers (or their payroll service provider) would be required to have had a payroll account open with the Canada Revenue Agency on March 15, 2020.
Eligible Remuneration and Incremental Remuneration
The types of remuneration eligible for the CEWS would also be eligible for the hiring subsidy.
Incremental remuneration for a qualifying period means the difference between an employer’s total eligible remuneration paid to eligible employees for the qualifying period and its total eligible remuneration paid to eligible employees for the baseline period. In both the qualifying period and the baseline period, eligible remuneration for each eligible employee would be subject to a maximum of $1,129 per week.
As is currently the case for the CEWS, the eligible remuneration for a non-arm’s length employee for a week could not exceed their baseline remuneration determined for that week.
The applicable dates for the calculation of incremental remuneration are shown below:
An eligible employer must have a decline in revenues sufficient to qualify for the CEWS in that period. For qualifying periods where the CEWS is no longer in effect (at this time, CEWS is projected to end with Period 20), an eligible employer would have to have experienced a decline in revenues of more than 10 per cent.
An employer’s decline in revenues would be determined in the same manner as under the CEWS. This method compares the employer’s revenues in a current calendar month with its revenues in the same calendar month, pre-pandemic. An employer can also elect to use an alternative approach, which compares the employer’s monthly revenues relative to the average of its January 2020 and February 2020 revenues.
Employers that had chosen to use the general approach for prior periods of the CEWS would be required to continue to use that approach for the Hiring Program. Similarly, employers that had chosen to use the alternative approach would be required to continue to use the alternative approach.
The subsidy amount would be equal to its eligible incremental remuneration multiplied by the Hiring subsidy rate (e.g. 50%, 40%, 30% or 20%) for the qualifying period. The rates for each period are shown below:
Contact your Padgett advisor to arrange for a consultation to see if the Canada Recovery Hiring Program is right for you. We have offices located in Victoria, Saanich, Colwood and Langford for your convenience.