The budget proposes a new subsidy, the Canada Recovery Hiring Program (CRHP), that will be available to eligible entities (eligible employers) that meet certain conditions. The CRHP will provide a subsidy equal to the incremental remuneration (see Q7) for a qualifying period (claim period) multiplied by a fixed subsidy rate. The subsidy rate is 50% for claim period 17 and will gradually decrease to 20% by claim period 22 as shown below.

Claim period table

Period 17 * June 6 – July 3, 2021	Period 18 July 4 – July 31, 2021	Period 19 Aug 1 – Aug 28, 2021	Period 20 Aug 29 – Sept 25, 2021	Period 21 Sept 26 – Oct 23, 2021	Period 22 Oct 24 – Nov 20, 2021
50%	50%	50%	40%	30%	20%

*Period 17 of the Canada Emergency Wage Subsidy would be the first period of the CRHP

No. If an eligible employer (see Q9) is eligible for both the CEWS and the CRHP for a claim period, it must claim the greater of the two subsidy amounts for that period, but not both. If the CRHP amount is the greater of the two, then the CEWS amount will be deemed to be nil, and vice versa. For example, in claim period 17, if the CRHP amount is greater than the CEWS, the eligible employer will apply for the CRHP and the CEWS amount will be deemed to be nil.

If the CRHP amount and the CEWS amount are equal for the same claim period, the eligible employer must claim the CEWS amount, and the CRHP amount will be deemed to be nil.

No. Although one of the conditions that an eligible employer must satisfy to qualify for the CRHP is that it must also file an application for the CEWS for that claim period, the CRA will consider this condition to be satisfied when the eligible employer files an application to claim the CRHP. Therefore, if an eligible employer files an application for the CRHP for a claim period, it will not have to file a separate application for the CEWS for the same claim period.

Yes. You can claim the CEWS for a claim period if you claimed the CRHP in a previous claim period or vice versa. There is no legislative provision which requires that the subsidy you claim in the current claim period be the same as the one you claimed in the previous claim period.

The following are the main differences between the CEWS and the CRHP:

• The CEWS is calculated on total eligible remuneration (see Q12) paid to eligible employees in a claim period, while the CRHP is calculated on incremental remuneration paid to active eligible employees (see Q7).
• A for-profit corporation will be eligible for the CRHP only if it is a Canadian-controlled private corporation (CCPC) (including a cooperative corporation that is eligible for the small business deduction). There is no requirement under the CEWS for a for-profit corporation to be a CCPC to qualify for the CEWS (see Q9).
• Whereas the CEWS provides a separate subsidy calculation (for claim periods 5-19) for furloughed employees (employees on leave with pay), the CRHP will not be available for such employees. This means that eligible remuneration paid to employees on leave with pay is excluded from the calculation of the subsidy amount for the CRHP (see Q11).
• The eligible employer’s revenue reduction percentage is relevant for determining eligibility for both the CEWS and the CRHP. However, whereas the revenue reduction percentage impacts the rates used to calculate the CEWS amount, it does not impact the rates used in the calculation of the CRHP amount. The CRHP amount is calculated using a fixed rate (see Q1).

Yes, the CRHP can be claimed for both existing and new employees. The CRHP is calculated based on an eligible employer’s incremental remuneration (see Q7). In calculating the incremental remuneration, the increase in total current period remuneration can arise from:

• an increase in the amount of eligible remuneration paid to its existing active eligible employees,
• hiring of new employees, or
• existing employees who were on leave with pay in the base period (see Q11) becoming active eligible employees again in period 17 or later.

An eligible employer for the CEWS would generally be an eligible employer for the CRHP. However, the following are some additional requirements for corporations and partnerships:

• For a for-profit corporation to be eligible, it must be a CCPC (including a cooperative corporation that is eligible for the small business deduction).
• For a partnership to be eligible, no more than 50% of the interest in the partnership (determined by fair market value) can be held—directly or indirectly, through one or more partnerships—by any combination of non-eligible employers including corporations that don’t meet the condition for corporations in (i) above.

Employers that are ineligible for the CEWS would also be ineligible for the CRHP.

Read Q3 – Which employers are eligible for the wage subsidy? on the Frequently asked questions - Canada emergency wage subsidy (CEWS FAQ) page to learn more about eligible employers for the CEWS.

An eligible employee for the purposes of the CRHP means an individual employed by an eligible employer primarily in Canada throughout a claim period (or the portion of the claim period throughout which the individual was employed by the eligible employer). This eligibility condition is the same as for the CEWS for claim periods 5 and later. Read Q13, Q13-1 and Q16 in the Eligible Employees section on the CEWS FAQ page to learn more about eligible employees. However, an eligible employer can claim the CRHP only for eligible remuneration paid to active eligible employees (see Q7 and Q11).

The CRHP is not available for employees on leave with pay, that is, employees who are paid by the eligible employer but do not perform any work. An employee would not be considered to be on leave with pay for the purposes of the CRHP if they are on a period of paid absence, such as vacation leave, sick leave, or a sabbatical. Read Q20-03 When is an employee considered to be on leave with pay? on the CEWS FAQ page to learn more about employees on leave with pay.

Eligible remuneration of an eligible employee generally includes salary, wages, and other remuneration, certain taxable benefits, and fees, commissions or other amounts paid for services. These are amounts for which an eligible employer would generally be required to withhold or deduct amounts on account of the employee’s income tax obligations. The types of remuneration considered to be eligible remuneration for the CRHP are the same as for the CEWS. It does not include a retiring allowance or severance pay, or items such as stock option benefits or the personal use of a corporate vehicle. As with the CEWS, the eligible employer would only be able to claim the CRHP in respect of amounts of eligible remuneration that the employer actually paid to the employee. Read Q17 to Q17-8 in the Eligible Remuneration section on the CEWS FAQ page to learn more about eligible remuneration.

No. The total base period remuneration for the CRHP is the total amount of eligible remuneration paid by the eligible employer to its active eligible employees, for the period from March 14, 2021 to April 10, 2021 (see Q7).

Baseline remuneration is the average weekly eligible remuneration paid to an eligible employee by an eligible employer during specific periods. Read Q18 to Q18-2 in the Eligible Remuneration section on the CEWS FAQ page to learn more about baseline remuneration.

Yes. You may be eligible to claim the CRHP for non-arm’s length employees provided such employees have baseline remuneration. Read Q18 to Q18-2 in the Eligible Remuneration section on the CEWS FAQ page to learn more about baseline remuneration and Q23 in the Calculating the wage subsidy section for additional information about situations where an eligible employer can claim the wage subsidy when it did not deal at arm's length with its eligible employee. The rules that apply to the CEWS are also applicable to the CRHP.

Qualifying revenue for the CRHP has the same meaning as for the CEWS. All special rules that apply to calculating the qualifying revenue for the CEWS also apply for the CRHP. Read Q6 to Q12-3 in the Calculating Revenues section of the CEWS FAQ page to learn more about qualifying revenue.

To qualify for the CRHP in a claim period, an eligible employer's revenue reduction percentage would have to be more than:

• 0%, for claim period 17 (from June 6, 2021 to July 3, 2021); and
• 10%, for claim periods 18 to 22 (from July 4, 2021 to November 20, 2021).

For greater certainty, if you have a revenue reduction percentage of 10% or less for periods 18 and later, you will not qualify for the CRHP.

For claim periods 17 to 20 (see Q1), the revenue reduction percentage that an eligible employer determines for CEWS purposes is to be used to determine its eligibility for the CRHP as well.

For claim periods 21 and 22, where the CEWS is no longer available, the revenue reduction percentage is determined in the same manner as for the CEWS - using either the general year-over -year or alternative approach. The eligible employer must continue to use the same method that it previously used for the CEWS. Read Q5-01 How is the revenue reduction determined for claim periods 5 to 16? of the CEWS FAQ page to learn more about determining your revenue reduction.

Yes, the deeming rule will continue to apply in determining the revenue reduction percentage for the CEWS, which in turn will be used to determine the eligibility for the CRHP. For claim periods 21 and 22, where the CEWS is no longer available, the same deeming rule will continue to apply in determining the revenue reduction percentage for the CRHP for those claim periods.

However, where the revenue reduction percentage determined as per the deeming rule does not meet the required revenue reduction percentage for the claim period (i.e., it is not greater than 10% for periods 18 and later), the employer will not qualify for the CRHP for that period. See example below. Read Q5-03 What is the deeming rule for claim periods 5 to 16? of the CEWS FAQ page to learn more about the deeming rule.

Example

XYZ Ltd. is an eligible employer. Its revenue reduction percentage is as follows:

revenue reduction percentage table

Claim period	Required revenue reduction percentage	Current period actual revenue reduction percentage	Revenue reduction percentage for the immediately preceding period (for the deeming rule)	Eligible for the CRHP
Period 17	>0%	0%	5%	Yes*
Period 18	>10%	8%	0%	No
Period 19	>10%	11%	8%	Yes*
Period 20	>10%	10%	11%	Yes*
Period 21	>10%	7%	10%	No**

*Assuming the eligible employer satisfies all the other eligibility conditions for the CRHP.

**Although the deeming rule applies, XYZ Ltd. does not have a revenue reduction percentage that is greater than 10%.

Where the eligible employer qualifies for the CRHP for a claim period, the amount of subsidy is calculated by multiplying its incremental remuneration (see Q7) for the claim period by the applicable CRHP rate (see Q1). For claim periods where the eligible employer can claim either the CEWS or the CRHP, the eligible employer must claim the greater of the two amounts. The lower of the two amounts is deemed to be nil (see Q2).

Example

Dorothy and Stan’s company, DorStan Ltd. (DorStan), shut down sporadically through the winter and spring due to public health restrictions. It had to lay off 3 of its 10 employees, each of whom was paid $600 per week. DorStan’s payroll from March 14 to April 10, 2021 (total base period remuneration) was $16,800 (7 employees x $600 x 4 weeks). All employees deal at arm’s length with DorStan.

DorStan has been claiming the CEWS using the general year-over-year approach to calculate its revenue decline. In May 2021, DorStan’s revenues are still down 50% when compared to revenues in May 2019, but are only down 20% in June 2021 (when compared to revenues in June 2019). DorStan is able to hire back its 3 laid-off employees starting June 6, 2021, and is even able to add an additional employee starting July 4, 2021(each new employee being paid $600 per week). Compared to its revenues in the corresponding months of 2019, DorStan’s revenues are down 15% in July 2021, 11% in August 2021, 10% in September 2021 and October 2021, and by November 2021 are back to their pre-pandemic level. The actual revenue reduction percentages are shown in Table A below.

Table A - Actual revenue reduction percentage for the claim period

Current reference Period (2021) Claim period	May Period 16 May 9 to June 5, 2021	June Period 17 June 6 to July 3, 2021	July Period 18 July 4 to July 31, 2021	August Period 19 Aug 1 to Aug 28, 2021	September Period 20 Aug 29 to Sept 25, 2021	October Period 21 Sept 26 to Oct 23, 2021	November Period 22 Oct 24 to Nov 20, 2021
Actual revenue reduction percentage	50%	20%	15%	11%	11%	10%	0%

Assuming DorStan satisfies all other conditions to qualify for the CEWS and the CRHP, the amount of the subsidy will be calculated as shown in Table B below.

Table B – CEWS/CRHP calculation

Claim period	Revenue reduction percentage for the purpose of the CEWS and the CRHP	Total current period remuneration (1)	Total base period remuneration (2)	Incremental remuneration (3) = (1)-(2)	CEWS amount (4) (Note 1)	CRHP amount (5)=[% x (3)]	What you can claim [greater of (4) and (5)]
Period 17	50%*	$24,000	$16,800	$7,200	(40% +0%) x $24,000 = $9,600	50% x $7,200 = $3,600	$9,600 (CEWS)
Period 18	20%*	$26,400	$16,800	$9,600	8.75% x $26,400 = $2,310	50% x $9,600 = $4,800	$4,800 (CRHP)
Period 19	15%*	$26,400	$16,800	$9,600	3.125% x $26,400 = $825	50% x $9,600 = $4,800	$4,800 (CRHP)
Period 20	11%	$26,400	$16,800	$9,600	0.25% x $26,400 = $66	40% x $9,600 = $3,840	$3,840 (CRHP)
Period 21	11%*	$26,400	$16,800	$9,600	N/A	30% x $9,600 = $2,880	$2,880 (CRHP)
Period 22	10%*	$26,400	$16,800	$9,600	N/A	$0	$0 (Note 2)

* Application of the deeming rule (see Q18).

Note 1: The CEWS is calculated based on rates applicable for that claim period. The last claim period for the CEWS is Period 20 – from August 29 to September 25, 2021.

Note 2: For periods 18 and later, you must have a revenue reduction percentage greater than 10%. Therefore, if you have a revenue reduction percentage equal to 10%, you will not qualify for the CRHP for that period (see Q16).

Eligible employers will be able to apply for the CRHP through the CRA's My Business Account portal or the Web Forms application.

Representatives (authorized at a level 2 or 3) will be able to apply for the CRHP on behalf of their clients through the Represent a Client service, as well as through the Web Forms application.

To log in to or register for the CRA's online services, go to canada.ca/taxes-business-online.

To use the Web Forms application, or if you have misplaced or do not have a web access code, go to canada.ca/taxes-iref.

Upon completion of your application, you will be required to keep records supporting your CRHP claim. Read Q27 to Q31 and Q33 in the Claiming the wage subsidy section of the CEWS FAQ page to learn more about the CEWS claim process. The rules that apply to the CEWS are also applicable to the CRHP.

No. The CRA is not creating a separate Business Number program identifier for the CRHP, as it did with the Canada Emergency Rent Subsidy ((ZA) program identifier). Instead, as is the case with the CEWS, an eligible employer will use their payroll program account (RP) number to apply for the CRHP.

A CRHP application for a claim period can be made only after the end of that claim period. In addition, at the time of application, the amount of total base period remuneration and total current period remuneration (see Q7) used to calculate the CRHP amount for that claim period must have already been paid.

Further, a CRHP application for a claim period must be made no later than 180 days after the end of the claim period. The table below provides the application due dates for claim periods 17 to 22.

table providing the application due dates for claim periods 17 to 22

Claim Period	Application due date
Period 17 – June 6 to July 3, 2021	Thursday, December 30, 2021
Period 18 – July 4 to July 31, 2021	Thursday, January 27, 2022
Period 19 – August 1 to August 28, 2021	Thursday, February 24, 2022
Period 20 – August 29 to September 25, 2021	Thursday, March 24, 2022
Period 21- September 26 to October 23, 2021	Thursday, April 21, 2022
Period 22 – October 24 to November 20, 2021	Thursday, May 19, 2022

The CRA will accept your original late-filed CRHP application or a late-filed amended CRHP application only under certain circumstances. The conditions for accepting such applications are the same as for the CEWS. Read Q26-01 and Q26-02 in the Claiming the Wage Subsidy section of the CEWS FAQ page to learn more about late-filed applications.

Yes. Under a specific anti-avoidance rule, the total current period remuneration of an eligible employer for a claim period is deemed to be equal to the total base period remuneration of the eligible employer, if:

(a) the eligible employer, or a person or partnership not dealing at arm's length with the eligible employer, participates in a plan that has the effect of increasing the incremental remuneration of the eligible employer for the claim period; and

(b) it is reasonable to conclude that one of the main purposes of such a plan is to increase the amount of the CRHP.

Where this anti-avoidance rule applies, the employer will be liable to a penalty equal to 25% of the amount of the CRHP that is claimed in its application, and will have to pay back any CRHP that it received. Read Q34 - Are there penalties for non-compliance? of the CEWS FAQ page to learn more about penalties for non-compliance.

Taxpayers should check the CRA website regularly for updated forms, policies, guidelines, questions and answers, and guidance.

In the meantime, please consult the Department of Finance Canada's Budget 2021 documents for details.