Canada Recovery Hiring Program (CRHP) as extended by Bill C-2
Providing eligible employers with a subsidy on the incremental remuneration paid to eligible employees between 6 June 2021 and 7 May 2022.
Bill C-2 extended this program beyond its original end date of 20 November 2021 to instead end on 7 May 2022. Bill C-2 also increased the subsidy rate for October 24 to November 20th to 50%.
Providing eligible employers with a subsidy on the incremental remuneration paid to eligible employees between 6 June 2021 and 7 May 2022.
Bill C-2 extended this program beyond its original end date of 20 November 2021 to instead end on 7 May 2022. Bill C-2 also increased the subsidy rate for October 24 to November 20th to 50%.
| Version | End date | Period 22 Subsidy Rate |
|---|---|---|
| Budget 2021 | 20 November 2021 | 20% |
| As Extended by Bill C-2 | 7 May 2022 | 50% |
Employers must choose between the Canada Emergency Wage Subsidy (CEWS) and this program.
The Canada Recovery Hiring Program is available starting with Period 17 of the CEWS (starting 6 June 2021). For CEWS Period 17, applicants require a revenue drop greater than 0% to qualify. For all subsequent periods, businesses require a revenue drop greater than 10% to qualify.
The subsidy is only available for certain types of businesses.[^1]
The subsidy rate is fixed at 50 per cent, except in period 20 (starting 29 August 2021), when the rate is 40 per cent, and period 21 (starting 26 September 2021), when the rate is 30 per cent.
Eligible remuneration for each period is equal to the difference in remuneration between the qualifying period and the baseline period (March 14 to April 10, 2021), subject to a cap of $1,129/week per employee.
As enacted, the government would have the authority to further extend the CRHP through regulation as far as 2 July 2022, without further Parliamentary approval. Such an extension would entail further costs beyond those identified in this cost estimate.
Starting with CEWS period 22 (starting 24 October 2021), CEWS is renamed as the Tourism and Hospitality Recovery Program and Hardest-Hit Business Recovery Program. Businesses eligible for both the CRHP and these CEWS successor programs must still choose between those options.
The basis of the model is a period-by-period profile of employment gains relative to the baseline, by revenue loss bracket and industry grouping, compiled from operational data. Changes in employment gains were explained as a function of the number of employees at businesses with revenue losses, as well as seasonal and time trends; employment gains were then projected using this model. Subsidy rates were applied to simulate the choice between CEWS and CRHP benefits and the subsidies which would be paid to CRHP claimants, for each future period.
As extended by Bill C-2, we expect the gross subsidies paid under the Canada Recovery Hiring Program to total $814 million. This represents a net cost of $704 million to the federal government after accounting for incremental corporate income tax revenues. Of the estimated $814 million subsidies that will be paid under this program, $466 million is due to the changes implemented by Bill C-2.
Expected subsidies increase notably for period 22 onwards because the greater revenue losses required by the CEWS successor programs means that businesses with revenue reductions less than 50 per cent (or less than 40 per cent in the tourism and hospitality sector) will only be eligible for the CRHP. Businesses not meeting these minimum revenue loss thresholds to apply for CEWS account for more than 90% of expected CRHP claims in period 22 onwards.
This cost estimate relies on the GDP projection in the PBO’s economic model and is affected by the sources of uncertainty inherent in that model, including the assumptions regarding the impacts of COVID-19. Other sources of uncertainty include: the extent to which eligible businesses use the program and the extent to which the distribution of revenue losses may become more or less associated with revenue declines over time. This estimate assumes all incremental corporate tax revenues are realized in the year the subsidy is paid, while the actual revenues arising from mitigating current corporate losses may be realized in subsequent tax years.
- Estimates are presented on an accrual basis as would appear in the budget and public accounts.
- A positive number implies a deterioration in the budgetary balance (lower revenues or higher spending). A negative number implies an improvement in the budgetary balance (higher revenues or lower spending).
- Totals may not add due to rounding