In a 700-plus page document, the federal government laid out a broad mix of social and economic spending in yesterday’s Budget 2021. Most of the new spending is focused on pandemic recovery but with some major investments in longer-term objectives, notably in affordable childcare. Here are a few highlights of interest to retailers.
- The current wage-subsidy (CEWS) and rent-subsidy (CERS) programs are being extended through to September 25, 2021, albeit with reductions in support. The maximum available support will drop from 65% of revenue reduction in June (the current level), to 60% in July, to 40% in August to 20% in September.
- There is a concurrent shifting focus to a hiring-subsidy/wage-enhancement subsidy program called Canada Recovery Hiring Program (CRHP) which will provide an initial subsidy of 50% on incremental spend on payroll (hiring, rehiring off furlough, hours or wage increases) to businesses that have experienced revenue reductions, but on a declining ramp. The goal is to wean workers off wage supports like Employment Insurance (EI) and Canada Recovery Benefit (CRB) and get them back into the workforce or to have those with part-time hours see their hours increased. Companies must make claims under either CEWS or the new program, but not both within the same four-week period.
- There will be an e-commerce advice and grant program for SMEs which will also include funds to train and hire 28,000 young people for work in this area.
- The government has committed to addressing excessive credit card interchange fees, with three objectives: lowering average interchange rates; similar pricing as between small and large merchants; and protecting consumer rewards.
See Retail Council of Canada’s press release.