Canada Recovery Hiring Program

Brian Sanders, Brian Steeves, Garrett Louie, Lawrence Tam
Insights
| 6/10/2021

Helping businesses impacted by COVID-19 hire more workers

 

The 2021 Federal Budget introduced the new Canada Recovery Hiring Program (CRHP) to provide support to eligible employers that continue to experience decreases in revenue because of the pandemic. The CRHP is designed to offset a portion of the extra costs employers take on as they reopen, encouraging business owners to increase wages and hours of operation and to ultimately bring back furloughed or laid-off employees and hire new staff.

With the added support, employers are encouraged to hire at their own pace, as different regions reopen at different times across the country, serving the overall goal to make it as easy as possible for businesses to hire workers as the economy reopens. The program provides eligible employers a subsidy of up to 50% of incremental remuneration paid to eligible active employees between June 6, 2021, and November 20, 2021.

As the rates for both the Wage Subsidy and the Hiring Program will slowly ramp down over time, employers will have a strong incentive to begin hiring as soon as possible and maximize their benefit.

The program will be available through the Canada Revenue Agency, just like the Wage Subsidy and Rent Subsidy.

Eligibility

There are eligibility criteria for employers and employees, as well as a business’ revenues. It should be noted that a business can apply for the CEWS or the CRHP, but not both.

Employers
Employees
Eligible Remuneration Threshold
Employers

Generally speaking, if you are an entity that is eligible for the Canada Emergency Wage Subsidy (CEWS) you would be eligible for the CRHP.

An eligible employer must be Canadian-controlled private corporations (including a cooperative corporation that is eligible for the small business deduction), and can also include individuals, non‑profit organizations, registered charities, 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.

Corporations and trusts that are ineligible for the CEWS because they are public institutions would also not be eligible for the CRHP. Public institutions generally include municipalities and local governments, Crown corporations, wholly-owned municipal corporations, public universities, colleges, schools, and hospitals.

Employees

An eligible employee must be actively employed by an eligible employer throughout a qualifying period (or the portion of the qualifying period throughout which the individual was employed by the eligible employer) and primarily employed in Canada.

The CRHP would not be available for furloughed employees, meaning those who are on leave with pay but do not perform any work for the employer. An employee would not be considered to be on leave with pay for the purposes of the CRHP if they are on a period of paid absence such as vacation leave, sick leave, or sabbatical.

Eligible Remuneration Threshold

To be eligible for the CRHP a business must experience a revenue decline. This would need to be the following:

  • More than 0% for the period between June 6, 2021 and July 3, 2021
  • More than 10% for the periods between July 4, 2021 and November 20, 2021

A decline in revenues is determined in the same manner as the CEWS – comparing revenues from the current calendar month with those in the same month pre-pandemic, or by using the alternate approach and comparing revenues to the average of January and February 2020 revenues.

*Whichever approach was used by an Employer for CEWS would continue to apply to their CRHP application

Similar to the CEWS, eligible remuneration for the CRHP would include salary, wages, and other remuneration for which employers are required to withhold or deduct amounts on account of the employee's income tax obligations.

Severance pay, stock option benefits, or benefits arising from the personal use of a corporate vehicle are not eligible remuneration.

The amount of remuneration for employees would be based solely on remuneration paid during the qualifying period.

The CRHP subsidy is calculated as A x (B – C), where:

  • A is the subsidy rate for the qualifying period
  • B is the total current period eligible remuneration (a maximum of $1,129/week)
  • C is the total base period eligible remuneration*

**The baseline period is March 14 to April 10, 2021

Table 1: Reference Periods & Filing Deadlines

CRHP Period  Qualifying Weeks  Current Reference Period   
Prior Reference Period 
Filing Deadline 
      General Approach  Alternative Approach   
Period 17  June 6 - July 3, 2021  May OR June 2021  June 2021 over June 2019 OR May 2021 over May 2019 

June 2021 or May 2021 OVER average of Jan and Feb 2020

Dec 30, 2021 
Period 18  July 4 - July 31, 2021  June OR July 2021  July 2021 over July 2019 OR June 2021 over June 2019 

July 2021 or June 2021 OVER average of Jan and Feb 2020

Jan 27, 2022 
Period 19  Aug 1 - Aug 28, 2021  July OR Aug 2021  Aug 2021 over Aug 2019 OR July 2021 over July 2019 

Aug 2021 or July 2021 OVER average of Jan and Feb 2020

Feb 24, 2022 
Period 20  Aug 29 - Sept 25, 2021  Aug OR Sept 2021  Sept 2021 over Sept 2019 OR Aug 2021 over Aug 2019 

Sept 2021 or Aug 2021 OVER average of Jan and Feb 2020

Mar 24, 2022 
Period 21  Sept 26 - Oct 23, 2021 

Oct OR Sept 2021 

Oct 2021 over Oct 2019 OR Sept 2021 over Sept 2019 Oct 2021 or Sept 2021 OVER average of Jan and Feb 2020 Apr 21, 2022 
Period 22  Oct 24 - Nov 20, 2021 Nov OR Oct 2021  Nov 2021 over Nov 2019 OR Oct 2021 over Oct 2019 Nov 2021 or Oct 2021 OVER average of Jan and Feb 2020  May 19, 2022 

Table 2: CRHP Calculations for Periods 17 to 22

Qualifying Period  Period 17  Period 18  Period 19  Period 20  Period 21  Period 22 
Subsidy Rate  50%  50%  50%  40%  30%  20% 
Required Revenue Decline (Same as CEWS)  More than 0%  More than 10%  More than 10%  More than 10%  More than 10%  More than 10% 

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual tax needs. This publication is not a substitute for obtaining personalized advice.
Brian Sanders
Brian Sanders
Partner, Incorporated
Brian Steeves
Brian Steeves
Partner
Garrett Louie Tax Expert
Garrett Louie
Partner, Incorporated
Lawrence Tam
Lawrence Tam
Senior Manager, Tax