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OPINION: Feds replace emergency wage subsidy with hiring program

An explainer from Colin Miller, chartered accountant and partner with KPMG’s tax practice in Lethbridge, Alta.
wp tax subsidy
This subsidy can be claimed for both new and existing employees, so even if you are not hiring any new workers for your farm, you may still be eligible.

WESTERN PRODUCER — Has your farm been receiving the Canada Emergency Wage Subsidy?

Certain benefits and subsidies introduced for the pandemic are changing, and this time the change impacts the CEWS subsidy.

CEWS is officially coming to an end, but the government has introduced a new program, called the Canada Recovery Hiring Program.

The CRHP is a subsidy available to certain employers that will provide a subsidy equal to an increase in total wages for a claim period, as compared to the period between March 14 to April 10, 2021, multiplied by a fixed subsidy rate.

If you are now paying higher total wages to your farm employees than you were between March 14 to April 10, 2021, then you may be able to benefit from this new subsidy.

This subsidy can be claimed for both new and existing employees, so even if you are not hiring any new workers for your farm, you may still be eligible.

Additionally, the increase in total wages can come from higher wages paid to your existing farm workers, such as if you gave them pay raises, the hiring of new farm workers, or existing workers who were on leave and then came back to work.

Eligibility requirements

For the most part, the CRHP subsidy has the same eligibility requirements as the CEWS subsidy, which are as follows:

  • You had a payroll account with the CRA on March 15, 2020.
  • You are an individual, such as if you operate your farm as a sole proprietor, or your farm is a corporation that is not exempt from income tax. Generally, most farms would meet this criterion since they are not typically exempt from tax.
  • Your farm must have experienced a minimum revenue decline of more than 10 percent for claim period 18, which covers the period between July 4 to July 31, 2021, and later claim periods.

Some additional eligibility requirements for the CRHP are:

  • For-profit corporations must be Canadian controlled private corporations. If your farm corporation is privately owned (not public) and the shareholders are residents of Canada and is a small business corporation eligible for the small business deduction, then this condition would be met.
  • If your farm is a partnership, no more than 50 percent of the partnership interest can be held by non-eligible employers, which would include corporations that do not meet the above point.

When is the CRHP available?

The CRHP began for the CEWS claim period 17, covering the period from June 6 to July 3, 2021, and will run until period 28 for wages between April 10 to May 7, 2022. CEWS and CRHP are both available for claim periods 17 to 21. Then beginning for period 22, which is for wages that were paid between Oct. 24 to Nov.20, 2021, CEWS will cease to be available, and only the CRHP will be available. Therefore, to continue benefitting from a wage subsidy once the CEWS subsidy ends, you may wish to consider if you qualify for the CRHP subsidy. Similar to the CEWS, the application for a CRHP claim period must be made within 180 days after the end of the claim period.

Although the CEWS and CRHP are both open for application for a few periods, if your farm meets the eligibility requirements for both subsidies, you cannot claim both subsidies at the same time. Your claim is limited to the better of the two subsidies.

Consult with an adviser if you think this subsidy will benefit your farm.

Colin Miller is a chartered accountant and partner with KPMG’s tax practice in Lethbridge. Contact:

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