Canada Emergency Wage Subsidy Updates: April 22nd

Hi Friends! Welcome back! We’re in a rapidly changing environment as governments base decisions on the latest medical information. These changes can have a direct impact on the supports available to Canadians including the Canada Emergency Wage Subsidy.

But first, here are my disclosures.  I do not work for the government. I work for a non-profit charity called the Credit Counselling Society and we help consumers with their money through free credit counselling, low-cost debt solutions, and financial education. I lead the Education team. As well, it’s important to note that the information I provide in these articles is based on what is available on the government of Canada and Ontario’s websites. The information and details can change quickly. And finally, all government funding decisions are made by government employees so unlike my Dad, who thinks that my brothers should call me because I can help them get Employment Insurance, which obviously, I cannot, I do not have any influence on decisions made by the government.

Here’s some information that may help you:

• What is the Canada Emergency Wage Subsidy? It’s a new program to help businesses keep and return workers to their payroll through this Covid crisis.
• What does it provide? Up to 75% wage subsidy to eligible employers
• How long is the benefit? Up to 12 weeks
• Is it retroactive? Yes, to March 15, 2020.
• When can I apply? April 27, 2020
• How do I know if my organization is eligible?

• Types of organizations: individuals, taxable corporations & partnerships, non-profits, charities Must have a drop of at least 15% revenue in March 2020 and 30% for the following months, and be able to attest to this decrease
• What are the eligibility periods?

• Who is not eligible? Public bodies including municipalities, local governments, Crown corporations, public universities, colleges, schools, and hospitals.
• How do I calculate whether my organization is eligible? According to the government of Canada’s website:

• As of April 22^nd, “calculate your reduction by comparing your eligible revenue for the starting month of the claim period with your baseline revenue. Your baseline revenue is either:

• The revenue you earned in the corresponding month in 2019, or The average of the revenue you earned in January and February, 2020
• You must choose one of these baseline revenue options for your method of comparison and will not be able to change it for your subsequent calculations for the other 2 periods.”
• What is considered eligible revenue? Revenue earned in Canada from selling goods, rendering services, and others’ use of your resources.
• What if I’m a registered charity or non-profit organization? These types of organizations may choose whether or not to include revenue from government sources, such as grants when applying for the subsidy. You must take the same approach for each period you are applying for.
• How much is the subsidy? Up to $847/week per employee.
• Who are eligible employees? An individual employed in Canada by you (eligible employer) during the claim period, except if there was a period of 14 or more consecutive days in that period where they did not receive any pay (eligible remuneration) by you. Employee eligibility is based on whether the person is employed in Canada, not where they live.
• What about the employees I had to lay off or furlough? Employees who have been laid off or furloughed can become eligible retroactively, as long as you rehire them and their retroactive pay and status meet the eligibility criteria for the claim period. You must rehire and pay such employees before you can include them in your calculation for the subsidy.
• Am I allowed to claim this subsidy for new employees? According to the government of Canada’s website on April 2^nd, “employers will also be eligible for a subsidy of up to 75% of salaries and wages paid to new employees.
• What’s included in the wage subsidy? It can include salary, wages, and other taxable benefits, fees, and commissions.
• Do I still have to withhold taxes? Yes
• Is there an overall limit on the subsidy amount that an eligible employer can claim? At this point, no.
• Do I need to top up my employees’ salaries to 100%? You must make your best effort to top up salaries to bring them to pre-Covid levels.
• How do I calculate the subsidy? Click here.
• How does my organization apply? Eligible employers will be able to apply through CRA’s My Business Account portal. This will be available on April 27, 2020.
• What does my organization need to keep in terms of records? You must keep records that show your organization’s reduction in arm’s-length revenues and remuneration paid to employees. There will be more details soon.
• What if I applied for the 10% wage subsidy? Any benefits received through the 10% wage subsidy would reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period.
• What if I have an employee who is eligible for the Canadian Emergency Response Benefit? According to the government of Canada’s website: “Eligibility for the CEWS of an employee’s remuneration, will be limited to employees that have not been without remuneration for more than 14 consecutive days in the eligibility period, i.e., from March 15 to April 11, from April 12 to May 9, and from May 10 to June 6. This rule replaces the previously announced restriction that an employer would not be eligible to claim the CEWS for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit.”
• What if my organization is not eligible for the wage subsidy? You can still furlough (give them leave) and they can apply to the Canadian Emergency Response Benefit for up to $2000/month.
• What if my type of business doesn’t qualify? The government has expanded some of the eligibility to help more businesses. If yours is not part of this, connect with your Member of Parliament to give them feedback.

I know there are a lot of details here and when we’re stressed (or at least when I am), I have a hard time with the details. So take your time, read through the government websites and in time, more information will become available.  Keep well, safe and sane!  Big hug!