Canadian Federal Budget Aims to Aid Hospitality Sector


OTTAWA – The Canadian Federal Government unveiled its new budget earlier this week, which looks to help some of the sectors hit hardest by the COVID-19 pandemic.

The tourism and hospitality sectors were hardest hit by the pandemic, with restaurants and hotels seeing sales drop significantly over the past year, and many hospitality businesses shutting their doors permanently.

This new budget aims to re-open some of those doors and keep them open. The government announced the Canada Emergency Business Account (CEBA), will be extended to June 30, 2021 and for businesses that face challenges accessing the CEBA, including Indigenous and rural businesses, the Regional Relief and Recovery Fund and the Indigenous Business Initiative have also been extended until June 30, 2021.

To assist the tourism sector’s recovery after the government proposes to make available a package of supports, totaling $1 billion over three years, starting in 2021/22. Budget 2021 proposes to provide $100 million to Destination Canada for marketing campaigns to help Canadians and other visitors discover and explore the country. It also proposes to establish a $500-million Tourism Relief Fund administered by the regional development agencies. The Fund will support investments by local tourism businesses in adapting their products and services to public-health measures and other investments that will help them recover from the pandemic and position themselves for future growth.

The Canada Emergency Wage Subsidy and The Canada Emergency Rent Subsidy and Lockdown Support were all set to expire in June 2021, but with the newly announced budget, these programs will now be extended to September 2021. The rates for each subsidy will slowly decline beginning in July in order to properly phase out the subsidies when vaccinations are completed and the economy re-opens.

The government will seek the legislative authority to have the ability to further extend the program through regulations until November 20, 2021, should the economic and public-health situation require further support beyond September 2021.

Another new feature proposed is the Canada Recovery Hiring Program. The proposed program is for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic. The proposed subsidy, which would offset a portion of the extra costs employers take on as they re-open, would be available for active employees and will be accessible from June 6 to November 20, 2021.

Eligible employers would claim the higher of the Canada Emergency Wage Subsidy or the new proposed Canada Recovery Hiring Program.

All the new programs are designed to phase out progressively as the government hopes to have vaccines and economy re-opened by the fall.

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