Proposed COVID-19 support measures

Updated December 22, 2021

With the continuing spread of COVID-19’s Omicron variant, the federal government announced its intention to make changes to the Local Lockdown Benefit and the Canada Worker Lockdown Benefit to make them easier to access. The changes, applicable for the two periods from December 19, 2021 to February 12, 2022, are outlined below.

Bill C-2, which includes the measures outlined below, received Royal Assent on December 17, 2021. The bill was revised to add a rule which limits the ability of a public company or its subsidiary to claim a wage or rent subsidy when either pays a taxable dividend to an individual on the common shares of the public company or its subsidiary.

New programs and changes to existing programs

Many personal and business support programs, including the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS), expired on October 23, 2021. To continue to support Canadians during the COVID-19 pandemic, the federal government proposed new support measures, as well as changes to some existing support measures. The new business support programs will provide wage and rent subsidies (similar to the CEWS/CERS) but only to targeted businesses that meet the requirements under each program.

Business measures

The government has proposed the following three new programs to continue providing wage and rent subsidies to businesses that have been severely impacted by the pandemic:

• Tourism and Hospitality Recovery Program (THRP)
• Hardest-Hit Business Recovery Program (HHBRP)
• Support during Public Health Lockdown

Tourism and Hospitality Recovery Program (THRP)

Time period

October 24, 2021 - May 7, 2022

Eligible entities

Qualifying tourism and hospitality entities including, but not limited to:

• Tourism: tour operators, travel agencies, museums, zoos, natural parks, theme parks, sightseeing or dinner cruises, charter fishing services, charter bus services, airport operators, etc.
• Hospitality: hotels, bed and breakfasts, restaurants, food trucks, nightclubs, bars, casinos, etc.
• Other: trade show organizers, fitness and recreational sports centers, overnight recreational camps, theatres, etc.

A complete list of the types of business activities eligible for THRP can be found on the government’s webpage.

Eligibility thresholds

To qualify, a “two-key” eligibility system must be met:

1. a current-month revenue decline of at least 40% (see our CEWS page for current-month revenue decline calculation)

2. a prior year revenue decline of at least 40%, which is the average monthly revenue decline over the first 13 CEWS qualifying periods (excluding period 10 or 11 and any qualifying period in which the entity was not carrying on its ordinary operations for reasons other than a public health restriction)

Wage and rent subsidy rates*

_{*Adapted from the federal government's website}

Hardest-Hit Business Recovery Program (HHBRP)

Time period

October 24, 2021 - May 7, 2022

Eligible entities

This is not sector specific and includes entities with deep losses that do not qualify for THRP and are not subject to a public health lockdown restriction.

Eligibility thresholds

To qualify, a “two-key” eligibility system must be met:

1. a current-month revenue decline of at least 50%

2. a prior year revenue decline of at least 50% (calculated under the same method as described above for THRP)

Wage and rent subsidy rates*

_{*Adapted from the federal government’s website}

Support During Public Health Lockdown 

The government will also provide both wage and rent subsidies to any business that’s forced to shut down one or more of their locations due to a public health restriction for at least seven days in a qualifying period. This measure will also be in place between October 24, 2021 - May 7, 2022.

Unlike the previous two measures, an eligible entity must demonstrate only a current-month revenue decline of at least 40% (e.g. no prior year revenue decline is required). Furthermore, an eligible entity must have at least 25% of its qualifying revenue in the prior reference period derived from the activities that were restricted due to the lockdown. Eligible entities who qualify under these rules can receive a wage and/or rent subsidy of up to 75% in periods 22 to 26 and up to 37.5% for periods 27 and 28, as calculated under the THRP rules noted above.

December 22 update:

For claim periods 24 and 25 (from December 19, 2021 to February 12, 2022) businesses can qualify for the Local Lockdown Program if they face capacity restrictions of 50% or more due to a public health restriction and the business’s restricted activities provided at least 50% of the qualifying revenue during the prior reference period. 

The current-month revenue decline threshold is also decreased to 25% instead of 40%. 

Under the proposed changes, the rate structure for the Local Lockdown Support for these two periods would be as follows: 

Rent Subsidy and Lockdown Support

Beginning October 24, 2021, the aggregate monthly rent subsidy cap (including any amounts claimed by affiliated entities) is increased from $300,000 to $1M. The Lockdown Support, which is a top-up rent subsidy equal to 25% of the qualifying rent expense, will continue to be available to an eligible entity provided it qualifies under the THRP or the HHBRP and faces a public health restriction. It is pro-rated based on the number of days in the qualifying period a particular location was affected by a lockdown. See our CERS page for more details on the Lockdown Support.

Canada Recovery Hiring Program (CRHP)

The government has proposed the extension of the CRHP to May 7, 2022, with the option to further extend to July 2, 2022. The proposals also include increasing the subsidy rate to 50% from 20% for period 22 (October 24, 2021 - November 20, 2021). Under the proposed rules, the existing eligibility rules and the existing baseline period of March 14, 2021 - April 10, 2021 will continue to apply during the extension.

Personal measures

Canada Worker Lockdown Benefit (CWLB)

The CWLB replaces the Canada Recovery Benefit (CRB), providing a benefit of $300/week to individuals whose work is interrupted due to a government-imposed lockdown for at least 14 consecutive days. This measure will be available until May 7, 2022, with retroactive effect to October 24, 2021. This benefit is available to workers who are both ineligible or eligible for EI, as long as they did not receive EI benefits, the Canada Recovery Caregiving Benefit (CRCB) or the Canada Recovery Sickness Benefit (CRSB) for the same period. However, individuals who lose income or employment because they don’t meet their employer’s vaccination requirements will not be able to access this benefit. An individual must file their 2021 income tax return by December 31, 2022 to be eligible for the CWLB for 2021 and must file both their 2021 and 2022 income tax returns by December 31, 2023 to be eligible for the CWLB for 2022.

December 22 update:

For claim periods 24 and 25 (from December 19, 2021 to February 12, 2022) individuals can qualify for the CWLB if they are unable to work due to capacity restrictions of 50% or more, as required under a public health order. Furthermore, for these two claim periods, the restrictions must be in place for 7 consecutive days rather than 14 consecutive days, as originally announced. 

Canada Recovery Caregiving Benefit

The government has proposed to extend the CRCB until May 7, 2022 and increase the maximum duration to 44 weeks from 42 weeks.

Canada Recovery Sickness Benefit

The government has proposed to extend the CRSB until May 7, 2022 and increase the maximum duration to 6 weeks from 4 weeks.

Additional information

The new pandemic aid bill is in the proposal stage. We’ll provide updates if and when the bill is passed and becomes law. Please contact a Grant Thornton tax advisor if you have any questions about the new programs.