The federal budget is proposing another year of massive deficits which include the extension and adjustment of the Canada Emergency Wage Subsidy (CEWS), Canada Emergency Rent Subsidy (CERS) and Lockdown Support programs. The programs have been extended from June 6 to September 25, 2021 while gradually phasing out the subsidy rates in the CEWS and CERS. Employers will have to have a revenue decline of more than 10% to qualify effective July 4, 2021. The CEWS will continue to be available for furloughed employees until August 28, 2021.
Canada Recovery Hiring Program (CRHP) - has been proposed as an alternative to the CEWS and to encourage hiring. Eligible employers are proposed to be allowed to claim an amount under the CRHP for six periods between June 6 and November 20, 2021. Key features of the program are:
- Eligible employers would include Canadian-controlled private corporations (CCPCs), individuals, non‑profit organizations, registered charities and certain partnerships.
- The subsidy would apply to incremental remuneration increases at the rate of 50 per cent for the first three periods, declining for the final three periods to 40 per cent, 30 per cent and 20 per cent.
- Eligible weekly remuneration would be limited to $1,129 per eligible employee.
- The CEWS revenue decline test would apply to determine qualification, along with other conditions.
New immediate expensing deduction — A newly proposed rule would allow Canadian Controlled Private Corporations to immediately expense certain capital expenditures, effective for property acquired after April 19, 2021 and put into use before 2024. The deduction is limited to $1.5 million per year, and this limit must be shared by associated corporations.
Taxation of COVID-19 benefits — The budget proposes to allow individuals to claim COVID-19 benefit repayments as a deduction in either the year they received the benefit or the year they repaid it. Where a return has already been filed, the recipient can ask the Canada Revenue Agency (CRA) to adjust their return. This option would be available for benefit amounts repaid at any time before 2023.
Under the assumption the proposed budget is passed - we will be happy to support anyone to see if they qualify far any or all the proposed programs.