• KD Wray

FOR EMPLOYERS: CANADA EMERGENCY WAGE SUBSIDY (CEWS)


CANADA EMERGENCY WAGE SUBSIDY (CEWS) is for employers, to retain employees and bring back recently laid-off employees.

The following comments are taken from the press conference today by the Prime Minister and the Minister of Finance and posts to www.canada.ca.

Canadian businesses (big and small) qualify for the subsidy such as proprietors (individuals), partnerships, taxable corporations, Canadian based not for profit organizations and registered charities

Publically funded entities such as municipalities, crown corporations, public universities, colleges, schools and hospitals would not qualify

The decline in monthly gross revenue to qualify for the subsidy is a decline of 30% or more

This is determined by comparing 2020 gross monthly revenue to 2019 gross monthly revenue of the particular month in question

Employers have to reapply monthly

The subsidy is for the months of March, April and May

Reapplying ensures the gross revenue decline test is met

Employers will have to attest that they are doing everything they can to pay the remaining 25% of their employee’s wage

The subsidy calculation includes wages from March 15, 2020, and onwards

The federal government policy is designed to have the employers recall recently laid-off employees

The federal government policy is to have employees on the payroll but to stay home, self isolate, not go to work, but be ready to return to work and commence operations immediately upon the passing of the COVID-19 crisis

Due to the nature of the program and the dollars involved (71 billion dollars), the Prime Minister and the Minister of Finance have repeatedly warned employers not to abuse the program. Significant financial penalties will apple to abusers of the program. The wage subsidy is designed to go to the employees.

The employee can not receive the wage subsidy (CEWS) and collect the Canada Emergency Response Benefit (CERB)

The application for the wage subsidy (CEWS) will be an online application through the Canada Revenue Agency website, funds are expected to be available in 6 weeks, it is recommended that businesses establish direct deposit to receive funds sooner

Note that Parliament is being recalled to approve this program due to the significant dollars being committed

Canada Emergency Wage Subsidy (CEWS) cost is estimated to be 71 Billion

Canada Emergency Response Benefit (CERB) cost is estimated to be 21 Billion

The subsidy calculations are complex, refer to the link below for more details

https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html

For an employer who does not qualify for the CEWS, the 10% wage subsidy announced on March 18th is still available

An employer who collects the 10% wage subsidy will generally reduce the amount to be claimed under the CEWS for the same period




10% TEMPORARY WAGE SUBSIDY FOR EMPLOYERS

The link below has the details on the 10% wage subsidy to support employers

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-

update/frequently-asked-questions-wage-subsidy-small-businesses.html




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