The federal government announced on October 21, 2021 that it plans to introduce two new COVID-19 support programs for certain businesses and organizations that have been most negatively impacted by the pandemic–the Tourism and Hospitality Recovery Program (“THRP”) and the Hardest-Hit Business Recovery Program (“HHBRP”)–as well as proposed changes to other federal support programs.
The government intends to create these new COVID-19 support programs for employers using its authority under the Budget Implementation Act, 2021, No. 1 to extend pre-existing support programs, such as the Canada Emergency Wage Subsidy (“CEWS”) and Canada Emergency Rent Subsidy (“CERS”), which were set to expire on October 23, 2021 (see our previous post for more information). In other words, the government intends to modify these existing programs to create the THRP and HHBRP, which would remain in effect until at least November 20, 2021. The federal government also intends to introduce legislation that, if passed, would extend the THRP and HHBRP until May 7, 2022, with a possibility of further extension until July 2, 2022.
Set out below is an overview of the THRP, HHBRP, and other proposed changes.
The Tourism and Hospitality Recovery Program
The THRP would provide subsidies to eligible businesses and organizations in the tourism and hospitality industry that have been seriously impacted by COVID-19 throughout the pandemic, such as hotels, restaurants, bars, and travel agencies. Under the THRP, eligible tourism and hospitality employers would be able to receive up to seventy-five percent (75%) rent and wage subsidies from October 24, 2021 to March 12, 2021 (i.e., claims periods 22 to 26).
In order for employers in these sectors to be eligible for the THRP, they would be required to have:
- an average monthly revenue reduction of at least forty percent (40%) from March 2020 to February 2021 (claims periods 1 to 13, excluding claim period 10 or 11); and
- a current monthly revenue loss of at least forty percent (40%).
The Hardest-Hit Business Recovery Program
Under the proposed HHBRP, businesses and organizations that are not eligible for the THRP but which have still been strongly impacted by COVID-19 throughout the pandemic would be eligible for rent and wage subsidies under the HHBRP if they have:
- an average monthly revenue reduction of at least fifty percent (50%) over the twelve-month period from March 2020 to February 2021 (claims periods 1 to 13, excluding claim period 10 or 11); and
- a current monthly revenue loss of at least fifty percent (50%).
The maximum wage and rent subsidy rate for eligible employers under the HHBRP would be fifty percent (50%) from October 24, 2021 to March 12, 2021 (claim periods 22 to 26).
Lockdown Support
The federal government also announced on October 21, 2021 that it will continue to provide support for businesses and organizations that are subject to public health lockdowns or restrictions that prevent a significant portion of their operations.
In particular, businesses and organizations subject to public health restrictions for seven (7) days or more in a claims period that require them to cease activities which account for at least twenty-five percent (25%) of their total revenues will be eligible for the subsidies at the same rates as the THRP, regardless of their sector.
Increasing the Monthly Cap on Eligible Expenses under the Canada Emergency Rent Subsidy
As part of the government’s efforts to provide targeted supports to businesses that were hardest hit by the COVID-19 pandemic, the federal government has also proposed raising the monthly total amount of eligible expenses that a business can claim under the CERS through legislative amendments. If legislated, the maximum rent expenses that employers and organizations that are eligible for the THRP or HHBRP can claim would be increased from $300,000 to $1 million per month for all of their locations, as of October 24, 2021.
Extending the Canada Recovery Hiring Program
The government has also announced that it will amend the Canada Recovery Hiring Program (“CRHP”) to increase the subsidy rate for eligible employers to fifty percent (50%) for October 24, 2021 to November 20, 2021, after which the program is set to end.
Additionally, the government plans to introduce legislation to extend the CHRP and the new subsidy rate of fifty percent (50%) until May 7, 2022, with a possible further extension until July 2, 2022.
Takeaways
The new support measures proposed by the federal government are great news for employers in the hospitality and tourism industry, and employers in other sectors that have been strongly impacted by COVID-19 throughout the pandemic.
However, it is important to note that the government has yet to legislate many of the proposed changes, and there could ultimately be further changes. Moreover, the government has yet to provide certain details related to the programs, such as the definition that will be used to determine whether a business or organization falls within the tourism and hospitality industry for the purposes of the THRP.
As such, we will continue to monitor any updates regarding the newly proposed federal support programs and related changes, and will provide more details on this Resource Centre once they are available.
This blog is provided as an information service and summary of workplace legal issues.
This information is not intended as legal advice.