Wage Subsidy Ontario: A Guide to Government Support for Employers
If you’re a business owner in Ontario, you’re probably looking for ways to support your employees while keeping your costs down. One option to consider is a wage subsidy program, which provides financial assistance to employers who hire and retain eligible workers. By participating in this type of program, you can benefit from reduced payroll costs while helping your employees gain valuable work experience.
In this article, we provide an overview of Ontario’s wage subsidy, explain who qualifies and how to apply, and outline what financial assistance employers can expect to receive.
Whether you’re looking to understand if your business is eligible or simply want to learn about the government aid available, this guide will cover the key details of the province’s wage subsidy and what it means for Ontario employers. Keep reading for everything you need to know about this important economic support program during these challenging times.
Key Takeaways:
What is a Wage Subsidy?
To understand wage subsidies in Ontario, it’s important to know what they are and how they work. Here’s a simple definition:
Definition of a Wage Subsidy: A financial program – often offered by federal and provincial governments – that helps employers offset the cost of hiring and training new employees.
Wage subsidies are designed to encourage businesses to take on workers who may face barriers to employment, such as youth, people with disabilities, and newcomers to Canada. By offering financial support, governments aim to create more job opportunities and strengthen Ontario’s economy.
The Need for Wage Subsidies in Ontario
As a business owner, you are most likely aware of the challenges associated with hiring and retaining employees. The cost of living in Ontario is high, and many workers struggle to make ends meet. This has led to a high turnover rate and difficulty finding qualified workers. One solution to this problem is wage subsidies.
Economic Challenges
Ontario has faced economic challenges in recent years, including a decline in manufacturing jobs and a shift towards service-based industries. This has made it difficult for many workers to find stable, well-paying jobs. Wage subsidies can help bridge this gap by providing financial incentives for businesses to hire and retain workers.
Impact of External Factors
External factors, such as changes in the global economy or shifts in consumer behaviour, can also have a significant impact on businesses in Ontario. For example, the COVID-19 pandemic led to widespread job losses and economic uncertainty. Wage subsidies can help businesses wether these types of challenges by providing financial support during difficult times.
Unemployment Rates in Ontario
Unemployment rates in Ontario have been higher than the national average in recent years. This has made it difficult for many workers to find stable, well-paying jobs. Wage subsidies can help address this issue by providing financial incentives for businesses to hire and retain workers, particularly those who may face barriers to employment.
Common Requirements for Wage Subsidies
1. Business registration in your province of operation
2. CRA payroll account
3. Job description (employee duties; hours of work; pay)
4. Funds to cover employee wages/salary (because a wage subsidy reimburses the employer – the subsidy is not paid upfront)
What Wage Subsidies Cover
Beyond covering a portion of wages or salary (a percentage of salary, or fixed per-hour dollar value), wage subsidies sometimes pay for the following expenses:
What to Use Wage Subsidies for
Smart entrepreneurs look at wage subsidies as more than simply bringing in new bodies – they use wage subsidies in creative ways to grow their business.
Here are some creative ways you can use wage subsidies to grow your business:
While there aren’t many business grants available specifically for marketing, you can use wage subsidies to hire marketing staff. Consider using wage subsidies (like Digital Skills for Youth) to hire staff who have expertise in the following marketing activities:
– Social media marketing
– SEO (search engine optimization)
– Digital marketing
Want to expand into international markets? Hire an employee who speaks the language of your target international market!
Is your business seasonal? Maybe you own a tourism-related business and make most of your money in the summer (or other season). There are wage subsidies available specifically to hire staff for tourism businesses (one example: the Propel Student Work Placement Program).
The beauty of this strategy is that there are also tax credits available for R&D (including the popular SR&ED tax credit). Use a wage subsidy to hire a graduate student to do advanced research for your business, then get a portion of the R&D costs back from the SR&ED program. You’re stacking funding!
Would custom software help your business be more efficient? Are there other technological improvements that your business needs? Some wage subsidies (like the Youth Employment Program) can be used to hire an employee with a technology background to:
– Create custom software
– Implement a CRM (customer relationship management) system
– Custom code a website
– Create an app for your customers
Current Wage Subsidy Programs in Ontario and Canada
There are many wage subsidy programs available to help Ontario businesses hire and train employees. These programs can help reduce the cost of hiring, provide financial assistance for training, and offer support to hire interns in various sectors. Here are some of the existing wage subsidy programs in Ontario:
Ontario Wage Subsidy Programs
As mentioned above, the are many more wage subsidy programs in Canada provided by the federal government that entrepreneurs in any province or territory can apply for (see the next section). But there are three Ontario-specific programs worth your time:
Ontario Job Creation Partnerships
The Province of Ontario’s Job Creation Partnerships funds community‑based projects that provide work experience to job seekers; employers act as project sponsors. Funding amount varies by project and supports participant costs and employer sponsors (no fixed standard amount).
Youth Internships in Northern Ontario
FedNor’s Youth Internships in Northern Ontario funds 6–12‑month internships to hire recent grads and build capacity in Northern Ontario. Youth interns are supported under three funding programs: Regional Economic Growth through Innovation (REGI), Northern Ontario Development Program (NODP) and the Economic Development Initiative (EDI)
CFDC Youth Internship Programs
Community Futures Development Corporations (CFDCs) are a network of 60 offices in rural and northern Ontario supporting local entrepreneurs. They offer youth internship programs in select offices. Contact your local office to see if they have programs.
Canada Wage Subsidy Programs
There are many national programs (i.e. businesses in any province or territory can apply), because they are federal government wage subsidy programs. The section below provides comprehensive information on every wage subsidy program offered nationwide:
Canada Summer Jobs Program
The Canada Summer Jobs program provides wage subsidies to employers from not-for-profit organizations, the public sector, and private sector organizations with 50 or fewer full-time employees, to create quality summer work experiences for young people aged 15 to 30 years. Funded employers are not restricted to hiring students — all youth aged 15 to 30 years may be eligible participants.
Student Work Placement Program (SWPP)
The Student Work Placement Program (SWPP) provides wage subsidies to employers that offer quality student work placements. It gives post-secondary students across Canada paid work experience related to their field of study.
Applications for wage subsidies are made through one of SWPP’s Employer Delivery Partners, a group of recognized associations and organizations that represent the interests of employers in various industries. Here is the complete list of delivery organizations (click on the organization to go directly to their SWPP page):
Science and Technology Internship Program: Green Jobs
The Science and Technology (S&T) Internship Program provides wage subsidies to encourage organizations to hire and mentor interns and invest in the workforce of tomorrow.
It also provides opportunities for youth to gain relevant work experience and skill development in science, technology, engineering and math (STEM) fields in the natural resources sectors: energy, forestry and mining, earth sciences, and clean technology.
Like SWPP (discussed in the previous section), funding to employers is provided by the program’s delivery organizations. So, if you’re a business in the natural resources sector, have a look at the following wage subsidy programs:
Digital Skills for Youth (DS4Y)
The Digital Skills for Youth program allows you to leverage the knowledge of a tech-savvy, educated youth population to future-proof your business.
The Digital Skills for Youth program is a wage subsidy provided to SMEs that covers 80% of wages up to $18,000 for environmental jobs that require digital abilities.
Examples of eligible roles include: digital marketers, developers, GIS specialists, drone operators, data analysts or IT specialists with an environmental focused role.
Funding to employers for DS4Y is also provided by the program’s delivery organizations. Here’s the list of DS4Y’s delivery organizations:
Innovative Work-Integrated Learning (I-WIL) initiative
The Innovative Work-Integrated Learning (I-WIL) is a federal government program that funds organizations to deliver short, tech‑enabled work‑integrated learning experiences for post‑secondary students. Funding varies by call for proposals (there is no fixed employer wage subsidy).
Below are the I-WIL’s delivery organizations:
Science Horizons Youth Internship Program
The Science Horizons Youth Internship Program provides wage subsidies to eligible Canadian employers in the environmental science, technology, engineering and mathematics sectors to hire recent university, college and polytechnic graduates. This program could give you a wage subsidy of up to $25,000 and up to $5,000 for skills development, training, and wrap-around services.
If this sounds interesting, check the following programs to see if you qualify:
Mitacs Wage Subsidies
Mitacs is a nonprofit national research organization that operates research and training programs in fields related to industrial and social innovation. They contribute up to 50% toward innovation project. From college students to undergrads to graduates and postdoctoral fellows, you get to collaborate with the brightest minds, all while maximizing your budget and breaking ground in your sector..
Mitacs has five wage subsidy programs:
IRAP Youth Employment Program (YEP)
The IRAP Youth Employment Program provides funding to hire and train youth, between the ages of 15 and 30, to work on your projects. This program can help you find motivated and innovative young talent for your business, and provide them with the skills they need to succeed. You can receive up to 80% of the wage costs for each employee, up to a maximum of $20,000 per employee.
Opportunities Fund for Persons with Disabilities
The Opportunities Fund for Persons with Disabilities provides funding to help employers hire persons with disabilities. This program can help you find talented and motivated employees with diverse abilities, and provide them with the support they need to succeed. You can receive up to 80% of the wage costs for each employee, up to a maximum of $30,000 per employee.
Discovering Potential Program
The Discovering Potential Program provides funding to help employers hire and train persons with disabilities. This program can help you find talented and motivated employees with diverse abilities, and provide them with the skills they need to succeed. You can receive up to a maximum of $24,000 per participant.
Bonus: Apprenticeship Job Creation Tax Credit
While not a wage subsidy, the Apprenticeship job creation tax credit provides tax credits when hiring eligible apprentices. This program can help you offset the cost of training and hiring apprentices in various trades. You can receive a tax credit of 10% of the eligible salaries and wages paid to eligible apprentices, up to a maximum of $2,000 per year per eligible apprentice.
Tip: Get More Free Money by “Stacking”
Smart entrepreneurs don’t stop at wage subsidies – they “stack” subsidies AND other types of free funding (like grants, rebates, and tax credits).
Pssst: there are businesses in Ontario that get tens (or hundreds) of thousands of dollars in free money year-after-year by following the stacking technique!
Wage Subsidy Reporting and Compliance
If you have received wage subsidies in Ontario, it is important to ensure compliance with reporting requirements. The Canada Revenue Agency requires that employers report the amounts of wage subsidies received for the tax year on both Schedule 1 of your T2 Corporation Income Tax Return (T2SCH1) and the General Index of Financial Information (GIFI) (source). On the GIFI, include the subsidy you received at line 8242. On Schedule 1 of your T2 Corporation Income Tax Return (T2SCH1), report the amounts of wage subsidies you received.
If you are a sole proprietor, Include the total subsidy amount you received for the tax year on line 8230, “Other income” of form T2125, Statement of Business or Professional Activities.
Overall, if you have received wage subsidies in Ontario, it is important to comply with reporting requirements and keep accurate records. By doing so, you can avoid potential penalties and ensure that your business remains in good standing with the CRA. For more info check out the CRA website.
Benefits of Wage Subsidies to Employers
For business owners in Ontario, there are many benefits to taking advantage of wage subsidies. Here are some of the most important ones:
Cost Savings
Wage subsidies can help you save money by offsetting the cost of hiring new employees. For example, the Canada-Ontario Job Grant provides up to 50-100% of the costs of training for your employees. This can help you save a significant amount of money on training costs, allowing you to invest more in other areas of your business.
Improved Productivity
When you hire new employees, it can take some time for them to get up to speed and become productive members of your team. Wage subsidies can help you reduce this ramp-up time by providing funding for on-the-job training. This can help your new hires become productive more quickly, which can help you achieve your business goals faster.
Related Study: Targeted wage subsidies and firm performance
Access to New Talent
Wage subsidies can help you attract and retain top talent by providing financial incentives for them to work for your company. This can be especially beneficial if you’re looking to hire employees with specialized skills or experience in a particular industry. By offering wage subsidies, you can make your job postings more attractive to potential candidates and increase your chances of finding the right person for the job.
Increased Flexibility
Wage subsidies can also provide you with greater flexibility in your hiring decisions. For example, if you’re hesitant to hire a new employee because of the cost, a wage subsidy can help offset some of that cost and make it easier for you to take the leap. This can be especially beneficial if you’re a small business owner with limited resources.
Benefits of Wage Subsidies to Employees
If you are an employee of a business that received the wage subsidy, you may be wondering how it will affect you. The good news is that the subsidy is designed to help employers keep their employees on the payroll, which means that you should continue to receive your regular paycheques.
Increased Job Security
One potential impact of the wage subsidy is that your employer may be able to keep you working even if business slows down. This is because the subsidy can help cover some of the costs of your salary, which makes it more affordable for your employer to keep you on board. This means that you may be less likely to face layoffs or reduced hours as a result of economic downturns.
Additional Job Benefits (Training, Etc.)
Another potential impact of the wage subsidy is that your employer may be able to offer you additional benefits. This is because the subsidy can help free up cash flow for your employer, which can be used to invest in other areas of the business. For example, your employer may be able to offer you a raise, additional vacation time, or training to help keep you motivated and engaged in your work.
Wrapping Up
Wage subsidies are some of the easiest funding programs to qualify for, and you can use the extra staff to boost your business in many ways.
And don’t forget: wage subsidies are just the beginning. There are hundreds of small business funding programs for Ontario entrepreneurs. Get stacking those programs!
Additional Resources for Ontario Entrepreneurs
💰 Funding a Business in Ontario
💼 Business Support Organizations in Ontario