By Terrance S. Carter, Adriel N. Clayton and Martin U. Wissmath

Federal Government Replaces COVID Relief through Bill C-2

Additional support has been made available to Canadians through COVID-19 relief subsidies introduced through Bill C-2, An Act to provide further support in response to COVID-19. Bill C-2 was introduced to replace the expired Canada Emergency Wage Subsidy (“CEWS”) and Canada Emergency Rent Subsidy (“CERS”) with new subsidy programs that were announced on October 21, 2021, as reported in the October 2021 Charity & NFP Law Update. After its introduction on November 24, 2021, Bill C-2 received Royal Assent on December 17, 2021, replacing the CEWS and CERS with a new Tourism and Hospitality Recovery Program (“Tourism and Hospitality Program”) and Hardest-Hit Business Recovery Program (“Hardest-Hit Program”). It also extends the Canada Recovery Hiring Program (“Hiring Program”), which provides eligible employers who have experienced “qualifying revenue declines” with a subsidy based on eligible salary or wages to help hire new workers or increase their current workers’ hours or wages. Further, in addition to these programs, Bill C-2 also introduces a Local Lockdown Program.

Through the new Tourism and Hospitality Program, qualifying tourism or hospitality entities may apply for wage and/or rent subsidies of up to 75%. Of note, qualifying tourism or hospitality entities would include charities and not-for-profits that earned at least 50% of their revenue through organizing, promoting, hosting, supporting, or participating in events that meet the artistic or cultural interests of their patrons; preserving and exhibiting objects, sites and natural wonders of historical, cultural or educational value (e.g. museums, heritage sites, zoos, botanical gardens, and nature park); or operating or managing a facility or providing services that enable patrons to participate in recreational activities, such as amateur sports clubs. To be eligible, entities would also have to have had at least a 40% revenue decline over the first 13 qualifying periods for the CEWS and have a current-month revenue decline of at least 40%.

Organizations that are not in the tourism, hospitality, arts, entertainment, or recreation sectors may still qualify for relief under the Tourism and Hospitality Program through the Local Lockdown Program. This program allows non-sector specific organizations, including charities and not-for-profits, to qualify for the same relief where they have been affected by a qualifying public health restriction, and where their revenue has dropped at least 40% during a claim period.

To qualify for relief, organizations must be subject to a public health restriction for at least seven days during a claim period, their stopped activities must account for at least 25% of their total eligible revenue during the period prior to the claim period, and they must have had at least a 40% revenue decline for the current claim period compared to the prior reference period. In addition to this relief, pursuant to a news release published on December 22, 2021, the federal government announced its intention to expand the Local Lockdown Program from December 19, 2021 to February 12, 2022, in response to anticipated Omicron variant-related lockdowns, to include employers subject to capacity-limiting restrictions of 50% or more, and to reduce the revenue decline threshold from 40% to 25%, with eligible employers receiving wage and rent subsidies between 25% and 75% depending on their degree of revenue loss.

Organizations, including charities and not-for-profits, that were previously eligible for the CEWS or CERS may alternatively be eligible for relief under the new Hardest-Hit Program, provided that they have a 12-month average revenue drop from March 2020 to February 2021 of at least 50%, and have a claim period revenue drop of at least 50%. Eligible organizations under this program would receive a subsidy up to 50%.

The Tourism and Hospitality Program, Hardest-Hit Business Recovery Program and Hiring Program are all set to terminate on May 7, 2022, unless further extended. Eligible employers would be able to claim relief under one of three programs, whichever gives the highest relief, and cannot receive relief under more than one program.

Ontario to Ease COVID Restrictions through Three-Step Plan

In response to the recent surge of the Omicron variant in Ontario, on January 5, 2022, the provincial government temporarily moved the province into a modified Step Two of its Roadmap to Reopen, set out in greater detail in the May 2021 Charity & NFP Law Update. Further to this, amending regulation
O Reg 2/22, Rules for Areas in Step 2 was filed on January 3, 2022 to amend O Reg 263/20, Rules for Areas in Step 2 under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 (“Reopening Act”).

Among the amendments, provisions concerning vaccination policies and proof of vaccination requirements, as well as modified capacity restrictions were included. Of note, while the original Step 2 capacity restrictions for weddings, funerals and religious services, rites and ceremonies remained unchanged (i.e. no more than 50% of the capacity of a room for indoor gatherings with physical distancing requirements, and no capacity restrictions for outdoor gatherings, with physical distancing requirements), capacity restrictions for related social gatherings were tightened. In this regard, under the “modified Step 2”, social gathering associated with weddings, funerals and religious services, rites or ceremonies are limited to five people for indoor social gatherings, and ten people for outdoor social gatherings. Additional restrictions were also included for gatherings held in motor vehicles for religious services, rites and ceremonies.

Work from home restrictions also remain unamended from the original Step 2 requirements; organizations that are open must ensure that their employees work remotely, except where the nature of their work requires them to be on-site at the workplace.

Further to an announcement by the provincial government, Ontario will be implementing a 3-step plan for lifting capacity limits. Effective January 31, 2022, social gathering limits will be increased to 10 people indoors and 25 people outdoors, and indoor capacity limits will be raised to 50% for meeting and event spaces, as well as museums, galleries, aquariums, zoos, science centres, landmarks, historic sites, botanical gardens and similar attractions.

Effective February 21, 2022, social gathering limits will be further increased to 25 people indoors and 100 people outdoors; organizations and facilities that are permitted to “opt-in” to proof of vaccination requirements will be permitted to operate at 100% capacity; and indoor religious services, rites, and ceremonies will be limited to the number of people that can maintain two metres pf physical distance (with no capacity limits for those that require proof of vaccination for all attendees).

Effective March 14, 2022, capacity limits will be lifted in all public settings; social gathering limits will be increased to 50 people indoors, with no limits for outdoor social gatherings; and remaining capacity limits for religious services, rites and ceremonies will be lifted.

​Read the February 2022 Charity & NFP Law Update