Understanding the new Canada Recovery Hiring Program (CRHP) and the extension of the Canada Emergency Business Account (CEBA).
Does your company qualify and how can these programs assist you?
Canada Recovery Hiring Program
The 2021 Federal Budget has introduced the new Canada Recovery Hiring Program (CRHP) to encourage employers to hire additional employees and/or increase the number of hours worked by their employees. This new program is intended to offset a portion of an eligible employer’s additional remuneration costs as they reopen, either as a result of increasing wages or hours worked, or hiring more staff. A subsidy of up to 50% of incremental remuneration paid is available for the period between June 6, 2021 and November 20, 2021.
The eligibility criterion is based on a reduction in revenue and is computed the same as the Canada Emergency Wage Subsidy (CEWS) program, meaning if an employer is eligible for CEWS, they also qualify for CRHP.
Below are the specific eligibility requirements for CRHP:
- Eligible employers include Canadian-controlled private corporations (CCPCs), individuals, non-profit organizations, registered charities, and certain partnerships
- Eligible employers must have a Canadian Revenue Agency (CRA) payroll account number as of March 15, 2020
- Only one wage-related subsidy can be claimed for a particular period. Eligible employers need to decide which subsidy to claim, CEWS or CRHP
- The revenue drop is computed under the general or alternative approach. The approach chosen must be consistent with the approach chosen for CEWS
- The revenue drop must be greater than 0 percent for the June 6 to July 3, 2021 qualifying period and greater than 10 percent for the periods between July 4, 2021 and November 20,2021 to be eligible for CRHP
The calculation for CRHP is equal to the incremental remuneration multiplied by the applicable hiring subsidy rate for that qualifying period. Incremental remuneration for a qualifying period is the difference between the remuneration paid by the employer in a qualified period and remuneration paid by the employer in a baseline period. The initial baseline period will be the period from March 14 to April 10, 2021. The maximum eligible remuneration for a single employee is limited to $1,129.00 per week.
The hiring subsidy rates for each period are as follows:
- Period 17 – June 6 to July 3 – 50%
- Period 18 – July 4 to July 31 – 50%
- Period 19 – August 1 to August 28 – 50%
- Period 20 – August 29 to September 25 – 40%
- Period 21 – September 26 to October 23 – 30%
- Period 22 – October 24 to November 20 – 20%
In that only one wage-related subsidy can be claimed for a particular period, eligible employers will need to calculate the amount of subsidy under both the CEWS and CRHP programs to determine which program is more beneficial for them. CEWS ends on September 25, 2021 and is not available for Periods 21 and 22. CRHP may be most beneficial to the eligible employer if there is a plan to hire more employees in the near future. With that, the incentive is to begin the hiring process as soon as possible to maximize the benefit from the program, as the subsidy rate decreases over time.
Canada Emergency Business Account
The Canada Emergency Business Account (CEBA) loan is an interest-free loan of up to $60,000 to small businesses and not-for-profits. The application period has been extended until June 30, 2021 to apply for the $60,000 CEBA loan or the $20,000 expansion (made available December 4, 2020). $20,000 of the $60,000 loan is forgivable if the loan is repaid by December 31, 2022. The application must be made at your financial institution.
Not sure how to compare the Canada Emergency Wage Subsidy and the new Canada Recovery Hiring Program to determine which will be more beneficial for your businesses? Or need assistance in determining if you qualify for the Canada Emergency Business Account? Connect with Lott & Company. We have the knowledge and experience to ensure you maximize the benefits of these various government programs intended to help Canadian businesses mitigate the financial impact of these difficult times.