Canada

What to know about Alberta’s Critical Worker Benefit

TAX ALERT  | 

The Alberta government recently introduced the Critical Worker Benefit (CWB), which provides eligible critical workers in the health-care, social services and education sectors with a one-time lump-sum payment of $1,200 paid through their employers. To cover administrative costs related to the CWB, employers will receive an amount equal to 7.66% of the total funds approved for their eligible workers.

Under the CWB program, the provincial government will distribute up to $465 million in funding to up to 380,000 eligible workers. Applications will be assessed on a first-completed, first-approved basis and, therefore, a delay in making an application may result in an application not being approved if the government has already distributed all the CWB funding. There is no limit on the number of eligible workers for which each employer can apply; however, an employer can only receive funds for each worker once. 

Public-sector employers do not need to apply for their employees, as the government will work with them to process the CWB. Private-sector employers will need to submit applications to the government for the CWB. As it is a limited fund, private sector employers should file applications as soon as possible. 

Notwithstanding the eligibility criteria that have been established, all CWB benefits are payable at the government’s discretion. Accordingly, employers should be careful to ensure benefit have been approved before making payments to employees. 

Eligibility for private sector employers and workers

Private sector employers must operate a business in Alberta in an eligible sector, which includes:

  • Private health clinics, e.g., offices of physicians or dentists;
  • Grocery, pharmacy and gas, e.g., food and beverage stores;
  • Food manufacturing;
  • Food and medical supply truck transportation, warehousing and storage; and
  • Private sector workers in First Nations communities. 

The government released Application Guidelines for the Private Sector that provides a complete list of eligible employers (see pages 9 to 13). Employers should confirm whether their specific sector and business are listed, as nuances do exist. For example, food and beverage stores are eligible employers, but full-service restaurants are not.

A private sector worker must satisfy all of the following criteria to qualify:

  • The worker must be located and employed in Alberta in an eligible occupation.
  • The worker must have worked a minimum of 300 hours in Alberta between Oct. 12, 2020 and Jan. 31, 2021.
  • The worker must have earnings of $25 per hour or less.

The following workers and employers are specifically excluded from the CWB program:

  • Health care: management staff, non-front line staff, members of Non-Union Exempt Employees and Professional Association of Resident Physicians of Alberta unions, business owners, contractors, self-employed persons, sole proprietors, physicians, medical residents, health care aides working in Long Term Care (LTC) and Designated Supportive Living (DSL) who are receiving the current $2/hour wage top up.
  • Private sector (other than health care), social services and education workers:  management staff, business owners, contractors, self-employed persons, sole proprietors, municipal and federal governments, political parties, and provincial or federal Crown agencies, boards, and commissions or corporations.

Application deadlines

March 19, 2021 March 31, 2021 No application required

Professionals who have private clinics, such as: 

  • doctors
  • dentists
  • physicians
  • other health care professionals

Private sector employers, including:

  • retail or food manufacturing
  • truck transportation
  • courier and messengers

Employers applying on behalf of healthcare workers in First Nation communities

Private-for-profit and not-for-profit employers in health care settings should apply on behalf of their workers including: 

  • diagnostic imaging clinics
  • continuing care, e.g., LTC, DSL and Licensed Supportive Living 
  • emergency medical services, e.g., air and ground ambulance
  • addiction and mental health
  • home care and hospice 

Employers in public health-care, social service and the education sector do not need to apply for the CWB through either application portal, including:

  • Alberta Health Services (AHS)
  • Covenant Health
  • CapitalCare
  • Alberta Precision Laboratories
  • Carewest 

 

Application procedure

As mentioned above, public-sector employers in the health-care, social services and education sectors do not need to apply, as the government will work with them to process the CWB.

Private-sector employers, including private health clinics, will be required to sign-up at MyAlberta Digital ID Business (MADI-B) and create a username and password prior to utilizing the Private Sector Application Portal.

Private-for-profit and not-for-profit employers in the health-care sector (other than private health clinics), e.g., diagnostic imaging clinics, emergency medical services, home-care, residential hospices, etc., will be required to use a separate application portal. 

Application approval

Once the employer has completed the application for its workers, the employer can expect to receive a decision within approximately two weeks. Prior to issuing a decision, the Minister may contact an employer to gather more information in order to complete Minister’s review. 

Once the Minister accepts an application, the Minister should distribute the funds shortly thereafter by electronic fund transfer directly into the employer’s bank account. 

Audit and compliance

All applications are subject to potential audit by the Government of Alberta. During an audit, auditors may request copies and extracts of the books and records of accounts maintained by the employer, therefore, employers should maintain all documents to support their applications. In the event that the Minister finds the records or accounts to be inadequate to permit a determination of eligibility, the Minister may require that the employer repay the CWB.

The CWB is a taxable benefit to the worker and as such, must be included in the worker’s T4 statement and declared as remuneration on the worker’s annual tax return in the year it is received.

While not discussed in the government guidance, the 7.66% of total CWB paid to employers to cover the administrative cost would likely be included in the employer’s taxable income, and any incremental administrative costs incurred would be deductible business expenses.1

Key takeaways

Eligible employers should apply as soon as possible. Applications are reviewed on a first-completed, first-approved basis and exhaustion of program funding may result in an otherwise-eligible application not being approved.  

Before applying, an employer should ensure the necessary criteria are met, and should document information to support eligibility.

Benefit payments should not be made to employees until the application is approved.

 

1The guidelines do not discuss the tax treatment to the employer for the 7.66% top-up or any implications for being the conduit of the $1,200 CWB distributed to employees. An update to this will be provided once available.

RSM CONTRIBUTORS


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