The federal government’s first budget in two years proposes to continue emergency federal funding for businesses into the fall, at which time it is expected that the vaccine rollout will be nearly complete and the Canadian economy will be back in business. Law firms and other legal workplaces that meet the criteria may be eligible.
The budget, presented by Finance Minister Chrystia Freeland on April 19, proposes extending the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and Lockdown Support until Sept. 25, 2021.
The plan is to gradually start decreasing the wage subsidy, CEWS, as of July 4, “in order to ensure an orderly phase-out of the program as vaccinations are completed and the economy reopens.”
If necessary – if, for example, the public health situation has not improved as expected by September – the government will seek approval to extend the wage subsidy program through to Nov. 20.
The government also proposes adding an “alternative support” for companies that continue to qualify for CEWS. The Canada Recovery Hiring Program is a $595-million program aimed at Canadian-controlled private corporations, individuals, charities and non-profits that would run from June until Nov. 20.
“The proposed subsidy would offset a portion of the extra costs employers take on as they reopen, either by increasing wages or hours worked, or hiring more staff. Eligible employers would claim the higher of the Canada Emergency Wage Subsidy or the new proposed subsidy.”
The budget also contains a proposal for penalizing publicly listed corporations that accept the wage subsidy but increase executive compensation over that paid in 2019. Those companies would be forced to repay any subsidy received between June 5, 2021, and the end of the program.
As well, the budget proposes to extend the number of weeks available for income support for Canadians such as the Canada Recovery Benefit and the Canada Recovery Caregiving Benefit – which self-employed individuals may be able to access – and make Employment Insurance sickness benefits available for 26 weeks, up from the current 15.
The budget contains other non-COVID proposals for small businesses that may be available to law firms, including a plan to help businesses adopt new technology, and allowing businesses to fully expense up to $1.5 million in capital investments in certain assets, including technology.
The budget also proposes to set aside $300 million to support entrepreneurs from underrepresented communities, including women and entrepreneurs of colour.