Ottawa introduces what it hopes is ‘final’ bill to implement pandemic business, income supports

Law360 Canada (November 25, 2021, 10:34 AM EST) -- The Liberal government has unveiled legislation to implement targeted financial supports for the business sectors it says still face “significant pandemic-related challenges” and for individuals hit by lockdowns.

On Nov. 24, Bill C-2 was introduced into the House of Commons by Deputy Prime Minister and Finance Minister Chrystia Freeland, with the dual aims “to create jobs and implement targeted COVID-19 support.”

“Bill C-2 is designed with an understanding that our economic recovery is still uneven and that the public health measures that are saving lives continue to restrict some economic activity,” Freeland told an Ottawa news conference after she introduced. “I will say I see this legislation as very much the last step in our COVID support programs. It is what I hope, and believe, is the final pivot.”

Freeland told reporters that, as of October 2021, Canada had recovered 101 per cent of the jobs lost to the COVID-19 recession, which compares to a recovery of only 81 per cent of lost jobs in the United States.  

“Today there are more active businesses in Canada than before the pandemic hit,” Freeland said. “Thanks in large part to our government’s support measures, we have avoided the sort of deep economic scarring that followed the 2008 recession, and that would have done permanent damage to our economy.”

According to a Finance Canada press release, the bill implements measures mostly announced last month, including to extend the Canada Recovery Hiring Program until May 7, 2022, for eligible employers with current revenue losses above 10 per cent and increase the subsidy rate to 50 per cent.  

The extension is designed to help businesses continue to hire back workers, increase hours and create the additional jobs Canada needs for a robust recovery.

The government said the targeted support to businesses still facing significant pandemic-related challenges would be available through three streams:

• The Tourism and Hospitality Recovery Program, which would provide support through wage and rent subsidies to, for example, hotels, tour operators, travel agencies, and restaurants, with a subsidy rate of up to 75 per cent. Bill C-2 adds to information provided in last month’s federal announcement by identifying the types of business that would be eligible.
• Hardest-Hit Business Recovery Program, which would provide support through wage and rent subsidies to other businesses that have faced deep losses, with a subsidy rate of up to 50 per cent.
• Local Lockdown Program, which would provide businesses that face temporary new local lockdowns up to the maximum amount available through the wage and rent subsidy programs.

According to Finance Canada, the proposed legislation would also:

• Extend the Canada Recovery Caregiving Benefit and the Canada Recovery Sickness Benefit until May 7, 2022, and increase the maximum duration of benefits by two weeks. This would extend the caregiving benefit from 42 to 44 weeks and the sickness benefit from four to six weeks.
• Establish the Canada Worker Lockdown Benefit which would provide $300 a week in income support to eligible workers who are directly impacted by a COVID-19-related public health lockdown in their region up until May 7, 2022. Eligible workers would be able to apply to receive this support retroactively from Oct. 24, 2021.

The bill allows the government to extend the subsidies by regulation, but no later than July 2, 2022.

The summary contained in Bill C-2 itself specifies that the bill amends the Income Tax Act and the Income Tax Regulations to extend subsidies under the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Rent Subsidy (CERS) and the Canada Recovery Hiring Program until May 7, 2022. Support under the CEWS and the CERS would be available to the tourism and hospitality sector and to the hardest-hit organizations that face significant revenue declines. Eligible entities under these rules would need to demonstrate a revenue decline over the course of 12 months of the pandemic, as well as a current-month revenue decline.

In addition, organizations subject to a qualifying public health restriction would be eligible for support, if they have one or more locations subject to a public health restriction lasting for at least seven days that requires them to cease some or all of their activities.

The bill proposes to amend the Canada Labour Code to, among other things, create a regime that provides for a leave of absence related to COVID-19 under which an employee may take:

(a) up to six weeks if they are unable to work because, among other things, they have contracted COVID-19, have underlying conditions that in the opinion of certain persons or entities would make them more susceptible to COVID-19 or have isolated themselves on the advice of certain persons or entities for reasons related to COVID-19; and

(b) up to 44 weeks if they are unable to work because, for certain reasons related to COVID-19, they must care for a child who is under the age of 12 or a family member who requires supervised care.

The government estimates the total cost of the proposed measures, from Oct. 24, 2021, through May 7, 2022, to be $7.4 billion. This is on top of the $289 billion the government of Canada has spent on direct income and business supports since the start of the COVID-19 pandemic.

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