Are your COVID-19 government benefits coming to end? We have the information you need to prepare.
Updated On: April 29, 2021 – The federal government has passed the 75% wage subsidy, also knows as the Canada Emergency Wage Subsidy (CEWS). More information coming soon, however below are some resources to get you started:
The Government of Canada has been extending the CEWS since it was first announced in March 2020. As of March 03, 2021, the CEWS has been extended again from the previous cut off date March 14, 2021 to June 05, 2021. This will allows employers to make a claim for the claim periods 14 to 16.
|Time frame||Req’d decline in revenue||Reference period for eligibility|
|Period 1||March 15 – April 11||15%||March 2020 compared to either:|
-March 2019 or
-Average of January & February 2020
|Period 2||April 12 – May 09||30%||Eligible for Period 1 |
April 2020 compared to either:
-April 2019 or
-Average of January & February 2020
|Period 3||May 10 – June 06||30%||Eligible for Period 2|
May 2020 compared to either:
-May 2019 or
-Average of January & February 2020
Visit Canada.ca for more information
The federal government has announced that it will increase the wage subsidy promised in early March from 10% to 75%. Prime minister Justin Trudeau explained, “It’s becoming clear that we need to do more — much more — so we’re bringing that percentage up to 75 percent for qualifying businesses.” Canadian small businesses have been particularly affected by the economic effects of the COVID-19 pandemic. With all non-essential businesses closed in the country’s two largest provinces, Ontario and Quebec, there is simply no revenue to continue to support their employees.
What We Know About The Government Funded Wage Subsidy
As this is breaking news and as the government’s response to the COVID-19 pandemic changes on a daily basis, we’ve put together the main points you need to know about the CEWS.
- March 18, 2020: The Trudeau government announces a 10% wage subsidy to help support Canadian businesses
- March 27, 2020: Trudeau announces during his daily update that the government-funded wage subsidy would be increased to 75%
- The wage subsidy will be backdated to March 15th.
- The government will cover up to 75% of a salary on the first $58,700, which is about $847/week.
- July 13, 2020: On May 15 the government of Canada extended the CEWS by an extra 12 weeks, which made it available for a total of 24-weeks, from March 15, 2020 to August 29, 2020. Today, Trudeau has announced that the CEWS will be extended till December 2.
- In addition to the 75% wage subsidy, the government of Canada has included a “Refund for Certain Payroll Contributions”. This would cover 100% of certain employer-paid contributions to EI, CPP, QPP, QPIP. This refund will cover employer contributions to employees who are on leave with pay.
What We Don’t Know Yet About The Wage Subsidy
As more information is provided by Trudeau and his government, we will continue to update the information provided here. But for now, there are still some unanswered questions concerning the newly increased government subsidy for Canadian businesses.
- Will they change the 30% revenue decline threshold?
Who Can Apply For CEWS?
Private corporations, taxable corporations, and partnerships who see a loss in revenue of at least 15% in March or 30% thereafter can apply for CEWS. The recent extension of the CEWS also extended the eligibility requirements. As a result, the following businesses can also apply for CEWS.
- Private colleges and schools
- Registered Journalism organizations (RJO)
- Registered Canadian Amateur Athletic Associations
- Partnerships where non-eligible members have a 50% or less stake
- Corporations/Partnerships owned by the Indigenous government
Municipalities, crown corporations, hospitals, public schools and other public bodies are not eligible for this subsidy.
Which Employees Can I Claim CEWS For?
Any employee that you have employed and have been paying for is eligible. However, any employee who has not received any pay for 14 or more days cannot be included for the subsidy. Rehired employees are also eligible for the CEWS, however, you will have to pay them yourself first before you can add them to the claim. To determine how much subsidy you qualify for, you must figure out the number of eligible employees you have and what their average pay has been from January 2020 to March 15, 2020.
How Do You Calculate Your Revenue Decline?
There are two ways you can show your decline in revenue. One, you can compare your current month’s revenue to the same month last year. For example, you may compare your revenue in March 2020 in comparison to March 2019. You can also compare your current revenue to your average revenue in January and February 2020. Please check the table above for more details.
How Do You Apply For CEWS?
You can apply for the CEWS in three different ways. Eligible businesses can apply through the CRA’s my business account portal, individuals representing a business can apply using “Represent a Client” or you can apply by simply using a “Web Forms” application the government has set up.
When applying, you will have to provide proof of loss in revenue and remuneration paid to employees. Don’t forget, that you must send an application for each CEWS claim period you are applying for.
How Will They Receive The Money?
If your business has registered with a direct deposit with the CRA, then you can expect to receive your subsidy through direct deposit within 3 – 5 business days after your application has been approved. If you are not registered then you can receive your funds by cheque however, it will take a few more days before you receive it by mail.
What About the 10% Wage Subsidy Program?
The Government of Canada‘s 10% Wage Subsidy program will allow employers to “reduce the amount of payroll reduction required to be remitted to the CRA”. It is a 3-month long program, designed to provide temporary relief. It can be used in combination with the 75% CEWS, however, those that use the 10% wage subsidy benefit for a certain period, will be eligible for less CEWS for the same period.
Main Goals Of The Wage Subsidy
As small and medium-sized businesses in Canada continue to deal with the economic effects of the pandemic, the increase in the wage subsidy is meant to help:
- Allow businesses to keep their employees on payroll
- Maintain relationships with employees so help make the process of reopening as smooth as possible
- Help Canadians employed by small and medium-sized businesses deal with the financial strain of the COVID-19 pandemic
Trudeau Government Announces Canada Emergency Business Account (CEBA)
In addition to increasing the wage subsidy, Trudeau also announced that a new Canada Emergency Business Account would be created in order to provide loans to small and medium-sized businesses in Canada. Businesses will be able to qualify for loans up to $40,000, interest-free for the first year. Moreover, up to $10,000 may be forgiven under certain circumstances. Learn how to apply by clicking here. GST, HST and custom duty payments will be deferred till June in an effort to reduce the financial pressure many businesses are facing.
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