Employer Guide to Reservist Eligibility Under the Compensation for Employers of Reservists Program

When an employee is called away for military service, your business still faces the cost of replacing them or sharing their duties. The Compensation for Employers of Reservists Program helps cover these costs when a reservist employee is deployed on a qualifying operation. This guide explains reservist eligibility, employer requirements, the support you can expect, and the application process, based on current federal program rules.

How the Compensation for Employers of Reservists Program Works

The Compensation for Employers of Reservists Program is a federal funding program provided by Employment and Social Development Canada (ESDC). It offers non-repayable financial compensation to civilian employers when a reservist employee is deployed on active military duty.

Who the Program Is For

You may be eligible as an employer if:

You employ a reservist who is a member of the Primary Reserve or the Canadian Rangers
The reservist was deployed for at least 30 consecutive days
The deployment was part of a Chief of Defence Staff (CDS)–directed operation
The reservist worked for you at least 30 hours per week for three consecutive months before starting their leave
The reservist has returned from active military duty at the time of application

Both small businesses and large employers can apply. There is no industry restriction.

Self‑employed reservists may also qualify under a separate stream, but this guide focuses on employer eligibility.

What Counts as a CDS‑Directed Operation?

A CDS‑directed operation is an official domestic or international military deployment authorized by the Chief of the Defence Staff. Training exercises and voluntary activities do not qualify unless they are part of an approved operation.

How Much Compensation Employers Can Receive

Funding is calculated using a national benchmark tied to pensionable earnings.

Employers can receive up to 40% of the Yearly Maximum Pensionable Earnings (YMPE)
The amount is prorated weekly
The formula is:
40% × YMPE ÷ 52 weeks × number of eligible deployment weeks

This formula means you get a set amount, no matter what your employee earns.

Because the payment is tied to YMPE, the amount changes year to year as pension limits are updated federally.

Tools like GrantHub’s eligibility tool can help you filter programs like this by federal jurisdiction and workforce-related funding in seconds.

Employer Responsibilities During Reservist Leave

Receiving compensation does not remove your obligations as an employer. You are still expected to:

Hold the reservist’s job or a comparable position, where required under provincial or federal employment standards
Maintain accurate payroll and employment records
Provide documentation confirming employment history, deployment dates, and return-to-work status

The compensation is meant to offset operational disruption, not replace wage payments dollar for dollar.

How to Apply

Applying for the Compensation for Employers of Reservists Program involves several steps:

Wait until the reservist returns
Applications can only be submitted after the reservist has finished their deployment and returned to work.
Gather required documents
You will need proof of employment, deployment orders, records of hours worked before deployment, and confirmation of the reservist’s return.
Complete the application form
The form is available on the Government of Canada’s website. Fill it out with accurate information and attach all supporting documents.
Submit your application
Send your completed application and documents to the address provided by Employment and Social Development Canada.
Wait for review and payment
Processing times can vary. Keep copies of all submissions for your records.

Common Mistakes to Avoid

Applying before the reservist returns
Applications are only accepted once the reservist has completed active duty and returned. Submitting early will delay or invalidate your claim.
Assuming all military leave qualifies
Only CDS‑directed operations count. Routine training and short-term exercises are not eligible.
Missing the pre-deployment work requirement
The reservist must have worked 30 hours per week for three consecutive months before leaving. Gaps or reduced hours can make you ineligible.
Confusing this with wage subsidy programs
This is not a traditional wage subsidy. The payment is based on YMPE, not actual payroll costs. See also Federal vs Provincial Wage Subsidy Programs in Canada: Key Differences.

Frequently Asked Questions

Q: Is the Compensation for Employers of Reservists Program repayable?
No. The funding is non‑repayable when eligibility criteria are met.

Q: Can small businesses apply for this program?
Yes. Businesses of any size, including sole proprietorships with employees, can apply if all conditions are met.

Q: Is the compensation taxable income for my business?
Generally, the payment is treated as business income. You should confirm the tax treatment with your accountant.

Q: How long does it take to receive payment?
Timelines vary depending on application completeness and verification. For context, see How Long Do Canadian Grant Programs Take to Pay Out Funds?.

Q: Can I apply if the reservist does not return to work?
No. The reservist must return from active military duty for the employer to be eligible to receive compensation.

Next Steps

If you employ reservists, this program can help reduce the financial impact of extended military leave while supporting Canada’s defence commitments. GrantHub tracks active federal and provincial workforce funding programs across Canada — including employer compensation and wage supports — so you can quickly check which ones match your business profile and location.

Employer Guide to Reservist Eligibility Under the Compensation for Employers of Reservists Program