Canada’s 2021 Budget Includes Announcements Relevant to Employers

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On April 19, 2021, Canada released its 2021 budget.  Budget provisions impacting employers include those that extend certain business support programs implemented in response to COVID-19; expand access to Employment Insurance (EI) benefits; amend the Canada Labour Code to improve job protections for gig economy workers, raise the minimum wage to $15/hour, and institute job protections for employees on leave; provide funding for job training; and promote diversity in corporate governance. The following briefly outlines these changes and proposals.

Supports for Businesses

Canada Emergency Wage Subsidy (CEWS)

CEWS will be extended until September 25, 2021.  The subsidy rate will be gradually decreased commencing on July 4, 2021, to ensure an orderly phase-out of the program as vaccinations are completed and the economy reopens.

Any publicly listed corporation receiving CEWS that is paying its top executives more in 2021 than in 2019, will be required to repay the CEWS amounts received for any qualifying period commencing after June 5, 2021.

Canada Recovery Hiring Program (CRHP)

The new CHRP will be established for eligible employers from June until November 2021, enabling them to shift to this program from CEWS.  The CHRP will provide an alternative support for businesses affected by the pandemic to help them hire more workers as the economy reopens.

Canada Recovery Benefit (CRB)

Up to 12 additional weeks of CRB will be provided to a maximum of 50 weeks. The first four of these additional 12 weeks will be paid at $500 per week, and the remaining 8 weeks will be paid at $300 per week.  All new CRB claimants after July 17, 2021, will receive $300 per week until September 25, 2021.

Canada Recovery Caregiving Benefit (CRCB)

The CRCB will be extended an additional 4 weeks, to a maximum of 42 weeks, at $500 per week.

Further Extensions Until November 20, 2021

As necessary, the government will be able to seek legislative authority to make further extensions past September 25, 2021, until no later than November 20, 2021, to both the CRB suite of supports, including caregiving and sickness benefits, and EI regular benefits.

EI Benefits

Legislative changes proposed to make EI benefits more accessible and simpler for Canadians over the coming year while the job market begins to improve include:

  • Maintaining uniform access to EI benefits across all regions, including through a 420-hour entrance requirement for regular and special benefits, with a 14-week minimum entitlement for regular benefits, and a new common earnings threshold for fishing benefits.
  • Supporting multiple job holders and those who switch jobs, by ensuring that all insurable hours and employment count towards a claimant's eligibility, as long as the last job separation is found to be valid.
  • Allowing claimants to start receiving EI benefits sooner by simplifying rules around the treatment of severance, vacation pay, and other monies paid on separation.
  • Extending the temporary enhancements to the Work-Sharing program such as the possibility to establish longer work-sharing agreements and a streamlined application process.

Consultations will be conducted to:

  • Examine systemic gaps exposed by COVID-19, such as the need for income support for self-employed and gig workers;
  • Determine how to support Canadians through different life events such as adoption; and
  • Determine how to provide more consistent and reliable benefits to workers in seasonal industries.

Any permanent changes to further improve access to EI will be made following these consultations and once the recovery is fully underway.

Amendments to the Canada Labour Code (CLC)

Gig Workers

The government reiterated its commitment to improving labour protection for gig workers, including those who work through digital platforms, and stated that following consultations on this topic, the CLC will be amended accordingly. 

Federal Minimum Wage

A federal minimum wage of $15 per hour will be established, rising with inflation.  Where provincial or territorial minimum wages are higher, that wage will prevail.

Job Protection While Receiving EI Sickness Benefits

The CLC will be amended to ensure that workers in federally regulated industries have the job protection they need while receiving EI sickness benefits.

Job Protection While Receiving Canadian Benefit for Parents of Young Victims of Crime

The CLC will be amended to ensure that employees in the federally regulated private sector have job protection when they avail themselves of the Canadian Benefit for Parents of Young Victims of Crime, which has been made available for parents who experience the death or disappearance of a child. 

Equal Remuneration Protection to More Employees in Air Transportation Sector

The CLC will be amended to extend equal remuneration protection to more employees in the air transportation sector so that when a service contract changes hands, affected employees will not be paid less if they are laid off and rehired to do the same work they were doing before.

Training

Significant funding ($960 million over three years, beginning in 2021-22) will be made available to Employment and Social Development Canada for a new Sectoral Workforce Solutions Program. This funding will be provided to: (a) design and deliver training for businesses and their employees; and (b) help businesses recruit and retain a diverse and inclusive workforce.

Diversity in Corporate Governance

To promote greater gender, racial, ethnic, and Indigenous diversity among senior ranks of the financial sector, a public consultation is proposed on measures that would adapt and apply the Canada Business Corporations Act diversity requirements to federally regulated financial institutions. In addition, Crown corporations will be required to implement gender and diversity reporting, starting in 2022.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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