Federal update: Important changes to wage and rent subsidy rules

Published March 3, 2021

Today, the Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, announced that the federal government intends to extend the current rate structures for the upcoming periods of the rent and wage subsidies from March 14 to June 5, 2021.

Specifically:

  • The maximum wage subsidy rate for active employees will remain at 75%.
  • The maximum rent subsidy rate will remain at 65%.
  • Lockdown Support will remain at 25% and continue to be provided in addition to the rent subsidy, providing eligible hard hit businesses with rent support of up to 90%.

Further details are available in the backgrounder issued with today’s announcement.

Reference Month Change

Throughout the COVID-19 crisis, applicants have demonstrated revenue declines by comparing revenue to the previous year. Given that we are approaching a full year since the start of the pandemic, the federal government has announced that applicants will be able to continue to use a pre-pandemic 2019 reference month, effective for the upcoming periods from March 14 to June 5, 2021.

Restaurants Canada welcomes this update to the application rules, as it responds to a key concern we’ve been raising for months. This critical win for our industry represents the effective influence that our Restaurant Revival Working Group has had at the public policy table.

Wage Subsidy Extension for Furloughed Employees

With regard to furloughed employees, the government intends to continue to align the wage subsidy rate structure with the benefits provided through the Employment Insurance program from March 14 to June 5, 2021. This means employers who qualify for the wage subsidy will be able to continue to claim up to a maximum benefit of $595 per week per employee to support remuneration of their furloughed workers.

Next Steps

Restaurants Canada is continuing to advocate for both the rent and wage subsidies to continue through to April 2022, because many restaurants could take that long — or longer — to return to profitability. We’re also calling for all government-backed loans to be partially forgivable, so that struggling foodservice businesses aren’t forced to close down due to crushing debt.

Marlee Wasser

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