What's new for 2021

In 2021, federally, the Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy programs were continued and the Canada Recovery Hiring Program was introduced.

Certain provincial COVID-19 programs were also extended into 2021. For example, Alberta’s Critical Worker Benefit, the Prince Edward Island Emergency Payment for Workers and the payment deferral options available for Manitoba’s Health and Education Levy and Nova Scotia’s Workers Compensation premiums.

From March until May, there were a number of provincial announcements regarding paid leave programs to permit employees to be vaccinated or absent due to illness or care-taking. The details, features and deadlines of the programs varied by jurisdiction. While some of the programs imposed new employer obligations, participation in others was optional. For details and the most current guidance available, employers should refer to the applicable government agency website.

  • 2021 Tax Form Filing deadline - February 28, 2022

    • T4 Other Information Codes 57 to 60 (employment income - March 15 to September 26, 2020) are not required for 2021 tax forms

  • Taxable Benefit Simplification due to COVID-19

    • Automobile benefits: The same temporary rules available in 2020 for automobile income tax deduction limits and expense benefit rates are also available in 2021 (federal/Quebec)

    • Parking/Equipment/Meals: The agencies have not yet confirmed whether their administrative positions regarding commuting (including parking), home office equipment and meal costs will be available in 2021 (federal/Quebec)

  • T2200 Short / TP-64.3 – The agencies have not yet confirmed the requirements for employees to claim their 2021 home office expenses. For the 2020 tax year, employees working from home due to COVID-19 had been given two federal options, the Short Form Method or the Detailed Method and employers were provided access to an online service for bulk filing Quebec’s TP-64.3-V

Federal - Requirements to Pay are issued by CRA to collect tax debt. In early 2020, CRA suspended their collection activities due to the pandemic. In February 2021, those efforts resumed and new orders were issued to employers

  • Ontario Employer Health Tax (ON EHT) - the temporary 2020 measure increasing the exemption from $490,000 to $1M was maintained in 2021. The $1M exemption is set to continue in place until 2028

  • Manitoba Health and Education Levy (MB HE Levy) - a threshold change was made from $1.25M to $1.5M and from $2.5M to $3.0M

  • Quebec’s Health Services Fund (QHSF) Threshold - The upper total payroll threshold for the Health Services Fund (beyond which the rate is 4.26%) increased from $6.0M to $6.5M

Ontario: In April 2021, the Workplace Safety and Insurance Board confirmed that, effective January 1, 2021, the maximum insurable earnings ceiling for 2021 was reduced to $97,308 (from $102,800)

  • Quebec Fondaction: In June 2021, the rate for the tax credit for the acquisition of Fondaction shares decreased from 20% to 15%

  • Provincial Tax

    • New Brunswick: In July 2021, the tax rate on the first income threshold was reduced, from 9.68% to 9.4%. This value was prorated to 9.12% from July 2021 to the end of December 2021

  • Stock option benefits:

    • New rules are in effect for employee stock options granted on or after July 1, 2021 by non-CCPC (non-Canadian-controlled private corporations) that have annual gross revenues of $500M or more. The employee stock options granted by those companies have an annual limit of $200,000 per employee

    • CCPC companies (and non-CCPC companies with less than $500M in gross annual revenues) are not subject to the limit

September 30, 2021 was announced as a new federal statutory holiday

  • Leading up to the holiday, a number of provincial governments announced they would be extending the holiday to their government employees

  • Prince Edward Island recently announced that an amendment to the Employment Standards Act would be introduced to add September 30 as a provincial statutory holiday

Corrections - The federal budget in 2021 announced a new process intended to simplify how pension administrators and employers correct over or under-contribution errors, starting in 2021