Williams HR Law LLP

Federal Budget 2021: Key Developments Affecting Employers

April 20, 2021

Today, April 19, 2021, the federal government announced its 2021 budget (the “Budget”), which laid out several measures intended to support the country through the third wave of the COVID-19 pandemic. We have outlined key proposed measures of interest to employers below:

Extended Emergency Wage Subsidy and Rent Subsidy Programs and Lockdown Support

The Budget proposes to extend the Canada Emergency Wage Subsidy (“CEWS”), and the Canada Emergency Rent Subsidy (“CERS”) and Lockdown Support until September 25, 2021.

New Canada Recovery Hiring Program

The Budget proposes to introduce the new Canada Recovery Hiring Program, valued at $595 million, for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic. The proposed subsidy, which will be available from June to November 2021, would offset a portion of the extra costs employers take on as they reopen, either by increasing wages or hours worked, or by hiring more staff.

Extended Employment Insurance Sickness Benefits

The Budget proposes to extend the maximum period of sickness benefits under the Employment Insurance program from 15 to 26 weeks. The extension will take effect in summer 2022. The Budget also proposes to make amendments to the Employment Insurance Act, as well as corresponding changes to the Canada Labour Code, to ensure that workers in federally regulated industries have the job protection they need while receiving EI sickness benefits.

Small Business Supports

The government has announced a number of measures to support small- and medium-sized businesses, including:

  • the launch of a new Canada Digital Adoption Program to help up to 160,000 eligible businesses adopt new digital technologies through micro-grants, access to digital trainers, and access to zero-interest financing that will help offset the costs of going digital;
  • improvements to Canada Small Business Financing Program, including increased capacity to support approximately 2,900 additional small businesses and expanded eligibility for financing under the program; and
  • plans to engage with key stakeholders to reduce the average overall cost of credit card swipe fees.

Enhanced Small Business Financing Program

The Budget proposes to improve the Canada Small Business Financing Program through amendments to the Canada Small Business Financing Act and its regulations. These proposed amendments include:

  • expanding loan class eligibility to include lending against intellectual property and start-up assets and expenses;
  • increasing the maximum loan amount from $350,000 to $500,000 and extending the loan coverage period from 10 to 15 years for equipment and leasehold improvements;
  • expanding borrower eligibility to include non-profit and charitable social enterprises; and
  • introducing a new line of credit product to help with liquidity and cover short-term working capital needs.

National Early Learning and Childcare Program

The Budget will invest nearly $30 billion over the next five years, and $8.3 billion per year after that, to create and sustain a national childcare and early learning program. The government aims to reduce fees for parents with children in regulated childcare by 50% on average by 2022, with a goal of reaching $10 per day on average by 2026, everywhere outside of Quebec.

Investments in Long-Term Care and Supportive Care

The Budget proposes to provide $3 billion over five years, starting in 2022-23, to Health Canada to support provinces and territories in ensuring standards for long-term care are applied and permanent changes are made. The Budget also proposes to provide $41.3 million over six years, and $7.7 million ongoing, starting in 2021-22, for Statistics Canada to improve data infrastructure and data collection on supportive care, primary care, and pharmaceuticals.

Takeaways for Employers

These promises, particularly the augmented supports to Canadian business, are welcome news to employers. In particular, the extensions to the CERS and Lockdown Support will come as great relief to employers struggling with the costs of rent or property expenses. Meanwhile, the extension of the CEWS, which has helped employers to prevent layoffs and recall employees, and the newly announced Canada Recovery Hiring Program may be greatly beneficial to employers facing difficulties in maintaining a steady workforce.

The significant amounts to be invested in the creation of a national early learning and childcare program and the pledge to reduce the costs of regulated childcare may be of interest to employers with employees who have childcare obligations that have kept them from returning to work. If the system is successful in providing flexible and safe childcare options, many employees may soon be able to return to regular work.

Additionally, employers operating long-term care homes should ensure to keep apprised of the planned national standards for long-term care to ensure steady compliance with health and safety obligations.

As always, we will continue tracking developments affecting employers and will post further updates as they become available to keep you In the Know.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.