Over 70 percent of people in Ontario have received both doses of the COVID-19 vaccine as of this writing. While this is good news in terms of lowering the risk of serious infection for those who are vaccinated, it does not mean the pandemic is gone. The Delta variant continues to be especially contagious, and poses a greater potential medical risk, particularly to those who are unvaccinated. The government has recognized that due to ongoing risks, employers and employees still require financial supports. Last year, the federal government put a number of programs in place to support workers and businesses and it has recently proposed extending those support measures.

Which Government Programs Are Affected?

On July 30, 2021, the government proposed to extend the Canada Emergency Wage Subsidy, Canada Emergency Rent Subsidy, and Lockdown Support. The government proposed these changes under the 2021 Federal Budget.

The Canada Emergency Wage Subsidy Extension (CEWS)

Before publishing the 2021 Budget, the wage subsidy program was set to expire. The budget proposed to extend the subsidy at least until September 25, 2021. However, in the end, the government decided to extend the wage subsidy (as well as rent subsidy and lockdown support) until at least October 23, 2021. The budget also gave the government the authority to extend the programs again if the public health and economic situations warrant it.

Initially, the government had proposed to decrease the subsidy rate by half, from 40 percent to 20 percent. As it stands now, the maximum rate for the wage subsidy (as well as the rent subsidy) remains at 40 percent in Period 20 (August 29 to September 25). These programs would also be extended by one additional period, with a maximum rate of 20 percent in Period 21 (September 26 to October 23).

To qualify for the CEWS, an employer must meet the following criteria:

  • The employer had a CRA payroll account on March 15, 2020 (exceptions apply in payroll provider and asset acquisition situations);
  • The business/employer is an eligible employer; and
  • The employer experienced the required revenue drop to be eligible for the CEWS (more than 0% in period 17, more than 10% in periods 18-22).

An eligible employer for purposes of CEWS includes:

  • An individual other than a trust;
  • A registered charity (other than a public institution);
  • A person that is exempt from tax under Part I of the Act (other than a public institution), that is:
    • An agricultural organization;
    • A board of trade or a chamber of commerce;
    • A non-profit corporation for scientific research and experimental development;
    • A labour organization or society;
    • A benevolent or fraternal benefit society or order; and
    • A non-profit organization;
  • A corporation or a trust, other than a corporation or a trust that is exempt from tax under Part I of the Income Tax Act (the Act) or is a public institution (see Q3-01);
  • A partnership, each member of which is a person or partnership described in this list;
  • A prescribed organization, including certain Indigenous businesses.

Employers Still Eligible for the Canada Recovery Hiring Program

Employers who do not apply for the Canada Emergency Wage Subsidy Extension can still apply to the Canada Recovery Hiring Program (CRHP). For an employer to qualify for the CRHP, they must meet two criteria:

  • The employer must meet all the qualification criteria of the CEWS program as set out above. However, there are exceptions for some partnerships and corporations; and
  • Additional CRHP criteria must be meet by the employer if they are a for-profit corporation or partnership. Eligible partnerships and corporations include:
    • Partnerships where at least 50% of the partnership’s interests are held (directly or indirectly) by employers eligible for the CRHP;
    • Canadian-controlled private corporations (CCPCs); or
    • Cooperative corporations that are eligible for the small business deduction.

The Lockdown Support will also be extended until October 23, 2021, at its set rate of 25 percent.

Support for Furloughed Employees

The government has also extended the wage subsidy available for furloughed employees. The weekly wage subsidy for a furloughed employee is extended from June 6, 2021, to August 28, 2021 (Periods 17 to 19). The subsidy amount is the lesser of:

  • the amount of eligible remuneration paid in respect of the week; and
  • the greater of:
    • $500; and
    • 55 per cent of pre-crisis remuneration for the employee, up to a maximum subsidy amount of $595.

The subsidy for furloughed employees continues to be available to eligible employers that qualify for the wage subsidy for active employees for the relevant period until August 28, 2021.

Contact Grosman Gale Fletcher Hopkins LLP in Ontario for Questions Regarding Federal Government Support Measures During the COVID-19 pandemic

It is prudent for employers and employees to keep up-to-date on amendments to employment support programs during the pandemic. Businesses and employees who find these measures unclear or are unsure of their obligations to employees in terms of layoffs or terminations during the pandemic should contact an employment lawyer.

For advice on government employer/employee support programs, employer liability, employee rights and other employment or labour law matters, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins LLP. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416-364-9599 to schedule a consultation.