Tourism and Hospitality Restoration Program and Federal Government Restoration Program for Most Affected Businesses

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TO To help Canadians and Canadian businesses through the COVID-19 pandemic, the federal government has put in place a comprehensive package of measures, including the Canadian Emergency Wage Grant, Canadian Emergency Rent Grant, Lockdown Assistance, and Canada Recovery Hiring Program.

The wage subsidy, rent subsidy and lockdown support expire on October 23, 2021. With the passing of the Budget Implementation Act, the government has been given the power to extend these programs until November 20, 2021.

On Thursday, the government announced that it would use this agency to support tourism, hospitality and other hard-hit organizations through November 20, 2021 under two new programs:

  • The program of recreation from tourism and hospitality.
  • The hardest hit business recovery program

The government is also proposing to enact legislation as soon as possible to extend these programs beyond November 20, 2021 to May 7, 2022, with power for further amendments through regulations until July 2, 2022.

Recreational program for tourism and hospitality

The support would target organizations in selected sectors of the tourism and hospitality industry that have been badly affected since the beginning of the pandemic and continue to have problems.
Examples of eligible organizations in the tourism and hospitality industry are hotels, restaurants, bars, festivals, travel agencies, tour operators, convention centers, convention and exhibition organizers, and others.

More details on the definition of qualified companies within this category will follow shortly. Eligible organizations must meet the following two conditions to be eligible for this program:

  1. An average monthly sales reduction of at least 40 percent during the first 13 credit periods for the Canadian Emergency Wage Grant (Sales decline after 12 months); and
  2. A loss of sales in the current month of at least 40 percent.

The twelve month revenue decline would be calculated as the average of all revenue decline percentages for eligible organizations from March 2020 to February 2021 (claim periods 1-13, excluding claim period 10 or 11). All periods in which a company is operating for reasons other than a public health restriction (e.g. for the calculation of the decline in sales in the current month, the existing rules would continue to apply.

Structure of the funding rate

Under this program, the maximum grant rate for the wage and rental subsidy would be based on. fixed 75 percent from October 24, 2021 to March 12, 2022 (entitlement periods 22 to 26).

The wage and rent subsidy rates would continue to be calculated on the basis of the loss of income for the current month compared to that of an earlier reference period, as under the current rules. Subsidy rates start at 40 percent for eligible organizations with a 40 percent decline in sales in the current month and then increase in proportion to the loss in sales in the current month, up to a maximum of 75 percent for those with sales in the current month decrease of 75 percent or more.

The rental and subsidy rates would be cut in half from March 13 to May 7, 2022 (entitlement periods 27 and 28).

Lockdown support would be available at the current fixed rate of 25 percent and prorated based on the number of days a particular location was locked, as per the applicable rules.

Table 1 below shows the proposed wage and rent subsidy structure for organizations that qualify for the Tourism and Hospitality Recovery Program from October 24, 2021 to May 7, 2022.

Table 1
Structure of the wage and rent subsidy under the Tourism and Hospitality Recovery Program
October 24, 2021 to May 7, 2022 (period 22 to 28)
Periods 22-26
October 24, 2021 – March 12, 2022
Periods 27-28
March 13 – May 7, 2022
Sales decline in the current month
75% and more 75% 37.5%
40-74% Decline in sales
B. 60% decline in sales = 60% subsidy rate
Decline in sales ÷ 2
e.g. 60% decline in sales ÷ 2 = 30% subsidy rate
0-39% 0% 0%

Hardest hit business recovery program

Hardest-hit organizations that do not qualify for the Tourism and Hospitality Recovery Program and that have been severely affected since the pandemic began are eligible for rental and wage subsidies under the Hardest-hit Businesses Recovery Program if they have the meet the following two requirements: Requirement:

  1. An average monthly sales reduction of at least 50 percent during the first 13 credit periods for the Canadian Emergency Wage Grant (Sales decline after 12 months); and
  2. A loss of sales in the current month of at least 50 percent.

The calculation of the 12 month decline in sales would follow the same rules as for the tourism and hospitality recovery program as described above. The existing rules would continue to apply to the calculation of the decline in sales in the current month.

Structure of the funding rate

Under this program, the maximum grant rate for the wage and rental subsidy would be based on. fixed 50 percent for Eligible Companies from October 24, 2021 to March 12, 2022 (Eligibility Periods 22 to 26).

The wage and rent subsidy rates would continue to be calculated on the basis of the loss of income for the current month compared to that of an earlier reference period, as under the current rules. Under this program, however, the subsidy rates would start at 10 percent for eligible, hard-hit organizations with a 50 percent drop in sales in the current month and then linearly to a maximum of 50 percent for those with a current drop in sales of 75 percent or more per month.

The rental and subsidy rates would be cut in half from March 13 to May 7, 2022 (entitlement periods 27 and 28).

Lockdown support would be available at the current fixed rate of 25 percent and prorated based on the number of days a particular location was locked, as per the applicable rules.

Table 2 below shows the proposed structure of the wage and rent subsidy for companies that qualify for the Hardest-Hit Business Recovery Program from October 24, 2021 to May 7, 2022.

Table 2
Structure of the hardest hit Business Recovery Program wage and rent allowance
October 24, 2021 to May 7, 2022 (period 22 to 28)
Periods 22-26
October 24, 2021 – March 12, 2022
Periods 27-28
March 13 – May 7, 2022
Sales decline in the current month
75% and more 50% 25%
50-74% 10% + (sales decline – 50%) x 1.6
e.g. 10% + (60% decline in sales – 50%) x 1.6 = 26% funding rate
5% + (sales decline – 50%) x 0.8
B. 5% + (60% decline in sales – 50%) x 0.8 = 13% funding rate
0-49% 0% 0%

Assisting with a public health lockdown

In order to identify the challenges that a pandemic flare-up could pose, organizations subject to a qualified public health restriction are entitled to assistance at the rates calculated in the Tourism and Hospitality Recovery Program (see Table 1), regardless of the industry, if they have one or more locations that are subject to a sanitary restriction (which lasts at least seven days in the current entitlement period) that obliges them to cease activities that accounted for at least about 25 percent of the employer’s total income in the previous reference period .

The applicants would not have to prove the decline in sales in the 12 months, but only a decline in the current month. It would be available to affected organizations regardless of the industry.

Canada’s Emergency Rent Subsidy Monthly Eligible Spend Increase

Under current regulations, there is a monthly limit on eligible expenses that can be claimed under the Canadian Emergency Rent Grant of $ 75,000 per business location and a total of $ 300,000 for all locations (including any amounts claimed by affiliates).

To better respond to the needs of businesses, including hard-hit businesses like hotels and restaurants, the government is proposing to make legislative changes starting October 24th to increase the total monthly cap from $ 300,000 to $ 1 million ( including all amounts claimed by affiliated companies), 2021.

This new monthly cap is available to all eligible employers and organizations that meet the new rental subsidy eligibility requirements under the Tourism and Hospitality Restoration Program and the Hardest-hit Businesses Restoration Program.

Extension of the Canada Recovery Hiring Program

The Canada Recovery Hiring Program is expected to expire on November 20, 2021. The 2021 budget gave the government the power to amend the program through regulations until the expiration date.

On Thursday, the government announced that it would use this agency to update the subsidy rate for currently eligible employers. Specifically, the funding rate is to be increased to 50 percent from October 24 to November 20, 2021.

The government is also proposing to introduce a law to extend the recruitment program by the new rate of 50 percent beyond November 20, 2021 to May 7, 2022, with power for further extension by ordinance until July 2 2022.

As part of the proposed extension, the previous base period from March 14 to April 10, 2021 would continue to be used to calculate the additional remuneration. The existing eligibility rules would continue to apply, including the required drop in sales of more than 10 percent.


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