How the New Canada Recovery Hiring Program May Help Your Business:
Introduced in the 2021 Federal Budget, the new Canada Recovery Hiring Program (CRHP) is designed to provide businesses with a subsidy of up to 50 per cent of the incremental increase in eligible remuneration paid in a qualifying period.
To maintain consistency with the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) programs, the six CRHP periods are identified as Periods 17 through 22. (June 6, 2021 through November 20, 2021)
Unlike the CEWS program, which intends to subsidize an employer’s existing payroll costs during the dire months of the pandemic, the intention of the CRHP is to encourage employers to increase the hours of existing employees, bring back laid-off, and hire new employees during the economic recovery phase.
Note: The hiring subsidy is not available for furloughed (leave with pay) employees.
A business may only apply for either the CEWS or the CRHP for a particular period, so proper planning and analysis may need to be undertaken to ensure that the entity is applying for the program that provides the most benefit in each period.
Who is Eligible?
Employers eligible for the Canada Emergency Wage Subsidy would generally be eligible for the hiring subsidy.
The Canada Recovery Hiring Program is for Canadian-controlled private corporations, individuals, charities, non-profits 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.
In addition, to qualify, an entity must have experienced a monthly revenue decline. For Periods 18 and onward, eligibility for the CRHP will be restricted to those entities which have experienced a revenue decline of at least 10 per cent.
The monthly revenue decline methodology and calculations for the CRHP are the same as under the CEWS and the CERS and must be applied consistently between the three subsidy programs.
For purposes of the CRHP, eligible remuneration is the same as for the CEWS. It includes salaries, wages and other remuneration paid for which employers are required to make payroll withholdings. Bonuses and vacation pay (if any) must be allocated to the specific period and generally cannot be claimed in one period as a “lump sum” payment.
Eligible remuneration for each eligible employee would be subject to a maximum of $1,129 per week (the same amount used for CEWS).
Note: Eligible remuneration will not include severance pay, stock option benefits, or non-cash taxable benefits such as the use of a corporate vehicle.
Planning Considerations:
When determining whether a business should apply for the CEWS or the CRHP, there is no short cut and a full calculation of both subsidies is recommended.
Employers thinking about (re)hiring employees later in the year may consider doing this earlier, as the CRHP is the highest between June 6 to August 28. This may be especially beneficial if there is a (re)training or (re)certification process required for returning employees. During this period, when theoretically the employee is least productive, the costs to (re)train or (re)certify the employee is subsidized at a high rate.
Can you Claim Both the CEWS and CRHP?
No. A business cannot claim both the CEWS and CRHP. An eligible employer would be permitted to claim either the hiring subsidy or the Canada Emergency Wage Subsidy for a particular qualifying period, but not both. You will need to decide which program is better for your business and apply accordingly.
How to Apply:
Businesses can apply through CRA’s My Business Account or Represent a Client. If neither is an option for you, use the Web Forms application using your web access code (WAC).
The program began on June 6, 2021, and will continue for six consecutive four-week periods until November 20, 2021, the application deadline is 180 days after the end of the claim period.
For a detailed analysis and comprehensive Canada Recovery Hiring Program guide or other federal supports for your business, please click here.
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