Businesses that have experienced a loss of at least 50 per cent of eligible revenue in 2020–2021 compared to 2019 may be eligible for grants under the new Ontario Tourism Recovery Program.
Funding from the program is based on the percentage of qualifying revenue losses and salary and wage expenditures to determine the maximum potential award amount.
Applications will be assessed on the following criteria:
- Number of employees who work at the business
- Visitors generated (historical)
- Business growth (historical)
- Business re-investment
- Market readiness and reopening plans
Funding decisions will also take into consideration the significance of the applicant’s business to its local tourism region.
Program funding will help successful applicants prepare to reopen safely, develop innovative tourism products, retain, and create tourism jobs, and support tourism recovery in their region and throughout Ontario.
Successful recipients will have the flexibility to apply funds to any eligible expenses and do what makes the most sense for their businesses. Expenses may include reopening and operating costs (such as staff salaries and maintenance), health and safety measures for visitors and workers, tourism product and experience development, and marketing.
Calculating the Funding Formula
To be eligible, applicants must have experienced a revenue decline of at least 50 per cent in the 2020–2021 year (i.e., a period that reflects COVID-related losses) vis-a-vis their 2019 fiscal year-end (a pre-COVID, baseline year).
Businesses that have their applications accepted will be eligible for funding based on the lesser of:
- Up to 20 per cent of the revenue decline; and
- Salaries and wages for the 2019 fiscal year according to the following tiers:
- Tier 1 – More than $4,000,000 in salary and wage expenses in 2019. Funding cap: $1,000,000
- Tier 2 - $2,000,000 to $4,000,000 in salary and wage expenses in 2019. Funding cap: $500,000
- Tier 3 - $1,300,000 to $1,999,999 in salary and wage expenses in 2019. Funding cap: $250,000
- Tier 4 – Less than $1,300,000 in salary and wage expenses in 2019. Funding cap: $100,000
Qualifying Revenue
Qualifying revenue is generally considered to be the total revenue as it appears on the applicant’s annual financial statements, excluding:
- Any revenue from off-site or direct-to-consumer wholesale or retail sales (e.g., grocery, LCBO, online ship-to-home);
- Third-party service agreements;
- Consulting or management fees;
- Government funds (grants and other sources of funding); and
- Interest income.
Businesses that received funding through the Ontario Small Business Support Grant or the Ontario Tourism and Travel Small Business Support Grant will have the amounts received from those programs subtracted from the amount of the Ontario Tourism Recovery Program they would be eligible for.
How to Apply
To apply, the applicant must provide its:
- Articles of Incorporation;
- Audited or Reviewed third-party annual financial statements for the 2018 and 2019 fiscal year-ends, as well as either:
- Annual financial statements for the 2020 or 2021 fiscal year-end; or
- Interim financial statements for the 12-month period identified in the alternate reporting option for 2020-2021;
- Canada Revenue Agency (CRA) business number;
- Legal name and operating business name (trade name), if different;
- Number of visitors in the 2018 and 2019 fiscal year-ends;
- Salaries and wages for the 2019 fiscal year-end; and
- Net income for the 2018 and 2019 fiscal year-end.
Meeting eligibility requirements will not guarantee that an applicant will receive funding. Applications will be evaluated and considered based on funding and assessment criteria.
Applications for the Ontario Tourism Recovery Program open October 13, 2021. Learn more about the program eligibility requirements here. If you believe your business qualifies for the program or if you have any questions surrounding other COVID-19 relief measures, we encourage you to reach out to your Crowe Soberman advisor.
This article has been prepared for the general information of our clients. Specific professional advice should be obtained prior to the implementation of any suggestion contained in this article. Please note that this publication should not be considered a substitute for personalized tax advice related to your particular situation.
