Ottawa launches subsidy for new hires — but advocate warns it leaves some businesses behind

The federal government has opened applications for a new subsidy aimed at helping employers hire or rehire staff as public health measures are eased and more businesses reopen.

Program estimated to cost taxpayers $595M

Patrons dine at a restaurant patio in Toronto. A new federal subsidy meant to boost employment as the economy recovers from the pandemic is being criticized as too narrow in scope. (Sam Nar/CBC)

The federal government has opened applications for a new subsidy aimed at helping employers hire or rehire staff as public health measures are eased and more businesses reopen.

The Canada Recovery Hiring Program (CRHP) was first announced back in April as part of the government's 2021 budget, but the budget bill needed to pass before the program could be launched. The budget estimates the program will cost $595 million.

The subsidy covers up to 50 per cent of extra salary costs eligible businesses take on as of June 6, including costs associated with hiring new staff or increasing shifts. Charities and non-profit organizations also qualify.

Dan Kelly, president and CEO of the Canadian Federation of Independent Business, said the subsidy will help the small businesses that qualify — but some businesses will be left out.

"It will scratch the itch of a lot of businesses as they move from lockdown to recovery, but it's not going to help those new businesses that are still cut out," he said.

WATCH | Hiring subsidy leaves out newer businesses, CFIB says:

Hiring subsidy leaves out newer businesses, CFIB says

1 year ago
Duration 1:56
Dan Kelly, president of the Canadian Federation of Independent Business, says the new hiring subsidy will help employers that qualify but will leave out too many new businesses.

In order to receive the hiring subsidy, a business needs to have qualified for the Canada Emergency Wage Subsidy (CEWS) — meaning they would have experienced a loss in revenue due to the pandemic.

Kelly said the eligibility criteria leave out new businesses that tried to open during the pandemic — or opened just before it hit — and are still struggling.

"We're making the same mistakes with this new program as we made with the old programs," he said.

One of those new businesses is BMA Hydroponics in Kingston, Ont., which opened last April just weeks after public health measures were first enforced.

David Leeson, who co-owns the store, said he and his partner had prepared for opening by hiring two employees who they later had to let go. He said they'd hoped to hire them back with the hiring subsidy, but both individuals have started looking for other work.

"Now it's just me and my business partner trying to keep the place going," he said.

When asked if the government would make the subsidy more accessible to new businesses, Small Business Minister Mary Ng's office said business support programs like CRHP are meant help "as many businesses as possible."

"These programs are designed to be flexible and respond to the needs of Canadian businesses, all while getting everyone on the road to recovery," Ng's press secretary Alice Hansen said in an email.

Leeson did give the government credit for creating business supports but said he still wishes his business had qualified for the subsidy.

"I give [the government] pretty good marks for what they've done in helping small businesses, but we kind of fell through the cracks and that's disappointing," he said.

Businesses can apply for CEWS and CRHP simultaneously, but will only receive payments from the program that offers the higher dollar value.

Other programs being phased out too soon: Kelly

But the wage subsidy will be phased out by September along with other business supports, such as the Canada Emergency Rent Subsidy (CERS).

Kelly said he worries those programs are being wound down too quickly. He pointed out that some businesses in provinces like Ontario still aren't able to fully open.

As it stands, the new hiring subsidy program will run until November.

Money for the CRHP will start to be sent out next Monday, and businesses can apply until the end December 20 to cover extra salary costs related to the period from June 6 to November 20.

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