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Federal Government Announces Changes to Canada Emergency Wage Subsidy and Introduces the Canada Recovery Hiring Program

On April 19, 2021, Deputy Prime Minister and Finance Minister Chrystia Freeland tabled in the House of Commons the Liberal Government’s first federal budget in more than two years, A Recovery Plan for Jobs, Growth, and Resilience (“Budget 2021”).  Budget 2021 proposes to extend the Canada Emergency Wage Subsidy (“CEWS”) until September 25, 2021 but proposes to gradually decrease the rate of the subsidy and, beginning July 4, 2021, only employers with a revenue drop of more than 10% would be eligible for the CEWS.  Budget 2021 also proposes to require a public corporation that receives CEWS after June 5, 2021 to repay such amounts where the corporation’s total compensation to specified executives in the 2021 calendar year is greater than the total compensation it paid to specified executives in the 2019 calendar year.  Lastly, Budget 2021 proposes to introduce a new program, the Canada Recovery Hiring Program, which provides eligible employers with a declining subsidy on the incremental remuneration paid to eligible employees between June 6, 2021 and November 20, 2021. An employer cannot claim both this subsidy and the CEWS in respect of the same qualifying period.  For a discussion of these tax measures as well as others in Budget 2021, please see McCarthy Tétrault's Budget 2021 Commentary.



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