To support Canadians and Canadian businesses through the COVID-19 pandemic, the government introduced a comprehensive set of measures, including the Canada Emergency Wage Subsidy, Canada Emergency Rent Subsidy, Lockdown Support and Canada Recovery Hiring Program. These programs, which have supported millions of workers, have evolved as the pandemic has evolved, in order to provide support to people who continue to need it the most.
The wage subsidy, rent subsidy and Lockdown Support are set to expire on October 23, 2021. The passage of the budget implementation act provided the government with the authority to further extend these programs until November 20, 2021.
Today, the government is proposing to use this authority to provide tourism, hospitality and other hard-hit organizations with support until November 20, 2021 under two new programs:
- The Tourism and Hospitality Recovery Program.
- The Hardest-Hit Business Recovery Program
The government is also proposing to introduce legislation as soon as possible to extend these programs past November 20, 2021, until May 7, 2022, with authority for further amendments through regulations until July 2, 2022.
Tourism and Hospitality Recovery Program
Support would be targeted to organizations in selected sectors of the tourism and hospitality industry that have been deeply affected since the outset of the pandemic and that continue to struggle.
Examples of eligible organizations in the tourism and hospitality industry include hotels, restaurants, bars, festivals, travel agencies, tour operators, convention centres, convention and trade show organizers, and others.
Additional details on the definition of qualifying businesses within this category will be forthcoming. Eligible organizations would be required to meet the following two conditions to qualify for this program:
- An average monthly revenue reduction of at least 40 percent over the first 13 qualifying periods for the Canada Emergency Wage Subsidy (12-month revenue decline); and
- A current-month revenue loss of at least 40 percent.
The 12-month revenue decline would be calculated as the average of all revenue decline percentages for eligible organizations from March 2020 to February 2021 (claim periods 1-13, excluding claim period 10 or 11). Any periods in which an entity was not carrying on its ordinary operations for reasons other than a public health restriction (for example, because it is a seasonal business) would be excluded from this calculation. The existing rules would continue to apply for the purposes of calculating the current-month revenue decline.
Subsidy Rate Structure
Under this program, the maximum subsidy rate for the wage and rent subsidies would be set at 75 percent from October 24, 2021 to March 12, 2022 (claim periods 22 to 26).
The wage and rent subsidy rates would continue to be calculated based on current-month revenue losses compared to those of a prior reference period, as under existing rules. The subsidy rates would start at 40 percent for eligible organizations with a 40-per-cent current-month revenue decline, increasing thereafter in proportion to current-month revenue loss up to a maximum rate of 75 percent for those with a current-month revenue decline of 75 percent or higher.
The rent and subsidy rates would be reduced by half from March 13 to May 7, 2022 (claim periods 27 and 28).
Lockdown Support would be available at the current fixed rate of 25 percent and pro-rated based on the number of days a particular location was affected by a lockdown, as under existing rules.
Table 1, below, details the proposed wage and rent subsidy rate structure for organizations that qualify for the Tourism and Hospitality Recovery Program from October 24, 2021, until May 7, 2022.