To ensure a smooth transition from the support measures adopted at the height of the pandemic to more targeted measures, the government is proposing to adopt certain modifications to the programs offered to businesses.
Changes to corporate emergency programs
Written by Francis Hinse-Laniel.
Extension of PEREC
PEREC ‘s maximum subsidy rate will be increased to 50% for the period from October 24 to November 20, 2021.
The government is also proposing legislation to extend the program until May 7, 2022, at a subsidy rate of 50%, to which the current eligibility conditions would apply.
Stimulus program for tourism and hospitality
This program is designed to support businesses in certain tourism and hospitality sectors that are still experiencing difficulties due to the effects of the pandemic.
Eligibility
Companies eligible for this program must meet the following three conditions:
- Qualify as an eligible organization;
- Have experienced an average monthly income reduction of at least 40% between May 10, 2020 and March 13, 2021 (i.e. during the first 13 periods of eligibility for the Canada Emergency Wage Subsidy);
- Have suffered an income loss of at least 40% for the current month.
Eligible organization
For example, organizations eligible for this program include :
- Hotels ;
- Restaurants ;
- Bars ;
- Festivals ;
- Travel agencies ;
- Tour operators ;
- Convention centers ;
- Conference organizers ;
- Trade shows.
This list is subject to change as more information on the definition of eligible organization becomes available.
Calculating the drop in income
The percentage drop in income between May 10, 2020 and March 13, 2021 shall be calculated by averaging the percentage drops in income used to produce the applications for SSUC periods 1 to 13, excluding either period 10 or 11.
In addition, any periods during which a company did not operate for reasons other than a restriction imposed by public health must be excluded from this calculation.
Subsidy rate
The rate of the wage subsidy and the rent subsidy will be set at a minimum of 40% from October 24, 2021, until March 12, 2022, and may reach a maximum of 75% when a company has suffered an income loss of 40% or more for the current month.
From March 13, 2022, the subsidy rate will be halved until May 7, 2022. The subsidy rate will therefore be between 20% (minimum) and 37.5% (maximum) during this period.
Wage subsidy and rent subsidy rates would continue to be calculated on the basis of the current month’s earnings losses compared with those of a previous reference period, as provided for under current rules.
For its part, the containment support measure would be offered at the current fixed rate of 25% and prorated according to the number of days a particular site was affected by containment, as provided for under current rules.
The table below shows the applicable subsidy rate as a function of the percentage drop in income.
Stimulus program for hard-hit companies
This program will be offered to businesses that are not eligible for the Tourism and Hospitality Recovery Program and that have been hard hit since the start of the pandemic.
Eligibility
To be eligible for this program, companies must meet the following conditions:
- Not eligible for the Tourism and Hospitality Stimulus Program,
- Have experienced an average monthly income reduction of at least 50% between May 10, 2020 and March 13, 2021 (i.e. during the first 13 periods of eligibility for the Canada Emergency Wage Subsidy);
- Have suffered an income loss of at least 50% during the current month.
Calculating the drop in income
The percentage drop in income between May 10, 2020 and March 13, 2021 should be calculated by averaging the percentage drops in income used to generate SSUC claims for periods 1 to 13, excluding either period 10 or 11.
In addition, any periods during which a company did not operate for reasons other than a restriction imposed by public health must be excluded from this calculation.
In the event of confinement, the confinement support measure will also be offered in accordance with the rules currently in force.
Subsidy rate
The rate of the wage subsidy and the rent subsidy will be set at a minimum of 10% from October 24, 2021, until March 12, 2022, and could reach a maximum of 50% when a company has suffered an income loss in the current month of at least 75%.
From March 13, 2022, the subsidy rate will be halved until May 7, 2022.
The table below shows the applicable subsidy rate as a function of the percentage drop in income.
Support in the event of a Public Health containment order
Any business affected by a Public Health containment order will be eligible for support under the Tourism and Hospitality Recovery Program, regardless of the sector in which it operates. The maximum subsidy rate to which a company would be entitled is 25%, based on the number of days the company is affected by the containment order.
Increase in monthly limit on eligible expenses under SUCL
Under current rules, a monthly cap of $75,000 per location and $300,000 in total for all locations (including amounts claimed by affiliated entities) applies to eligible expenses for which reimbursement can be claimed under the Canada Emergency Rent Grant.
Effective October 24, 2021, the overall monthly cap will increase from $300,000 to $1,000,000 for all businesses eligible for the rent subsidy under the Stimulus program for tourism and hospitalityl and Stimulus program for hard-hit companies.
Canadian Containment Workers’ Benefit
This benefit would provide $300 per week to workers who are unable to work due to a Public Health or government containment order. This benefit would also be available to workers who do not qualify for EI, and to those who qualify for EI but receive no benefits. However, the Benefit cannot be claimed if the loss of income or employment results from a refusal to comply with a vaccination obligation.
This benefit is the subject of a bill and is not yet in force. However, if it is adopted, it will be offered retroactively from October 24, 2021 to May 7, 2022.
If you have any questions about how to apply the program changes, contact our experts!
