Canada Emergency Wage Subsidy for Employers
Canada Emergency Wage Subsidy Provides Critical Help to Employers by covering 75% of wages
On March 18, the Government announced a 10% wage subsidy up to $25,000. After Conservatives and business leaders pointed out that 10% wasn‘t nearly enough to help businesses struggling with shut-downs and huge declines in revenue, the government increased its wage subsidy to 75% on April 8.
How much does the new wage subsidy provide?
Between March 15, 2020 and June 6, 2020, the government will provide a wage subsidy for each employee that is 75% of remuneration up to $847 per week. Employers are expected to make “best efforts” to pay employees their full earnings, where possible, and there is no maximum overall limit on the total subsidy that an employer can claim.
Who is eligible?
Employers who experience a reduction in gross revenues of at least 15% in March and 30% in April or May will be able to access the subsidy. Employers have the choice between two methods to show the drop in revenues. They can compare their revenue of March, April and May 2020 to that of the same month of 2019, or they can compare it to an average of their revenue earned in January and February 2020. Employers are also allowed to measure revenues either on the basis of accrual accounting (as they are earned) or cash accounting (as they are received)
The subsidy is available to individuals, corporations, partnerships of eligible employers, as well as non-profit organizations and charities. Public sector entities are not eligible. The Government also announced that it will offer additional flexibility to charities and non-profit organizations on how they calculate the declines in revenue, and they can exclude government funding from those calculations.
How do I apply?
Eligible employers can apply for the CEWS through the Canada Revenue Agency's My Business Account portal. The government expects to have the portal (hopefully) running some time in May. Employers should keep records to verify the decline in revenues and the remuneration paid to employees.