Canada Emergency Wage Subsidy (CEWS) – NEW INFORMATION

UPDATE

  • (Currently Accepting Applications– Direct deposits will begin to appear in employers’ accounts as of May 7th)
  • To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible employers a temporary wage subsidy.
  • The program was originally set to end June 6th. The program will now be extended beyond June (further details to be released in near future).
  • Helpful Infographics:
    1. Are you eligible for the Canada Emergency Wage Subsidy?
    2. How is the Canada Emergency Wage Subsidy (CEWS) calculated?
  • Details:
    • 75% wage subsidy for qualifying businesses retroactive to March 15, 2020.
    • Eligible employers would include individuals, taxable corporations, partnerships consisting of eligible employers, non-profit organizations and registered charities.
    • Public bodies would not be eligible for this subsidy. Public bodies would generally include municipalities and local governments, Crown corporations, wholly owned municipal corporations, public universities, colleges, schools and hospitals.
    • Eligible remuneration may include salary, wages, and other remuneration like taxable benefits.
    • This subsidy would be available to eligible employers that see a drop of at least 15 per cent of their revenue in March 2020 and 30 per cent for the following months.
    • An employer’s revenue for this purpose is its revenue in Canada earned from arm’s-length sources.
    • Would apply at a rate of 75% of the first $58,700 normally earned by employees – representing a benefit of up to $847 per week. viii. The easiest way to apply for the CEWS is through My Business Account or Represent a Client.
    • CEWS claims will be subject to verification by the CRA. Funds for approved applications will begin to be released on May 5th appearing in employers’ accounts starting May 7th.
    • The pre-crisis remuneration for a given employee would be based on the average weekly remuneration paid between January 1 and March 15
    • There would be no overall limit on the subsidy amount that an eligible employer may claim.
    • Eligible employers would include employers of all sizes and across all sectors of the economy, with the exception of public sector entities.
    • Beginning April 27, 2020, certain financial institutions will offer CRA direct deposit online enrolment for business payroll accounts through their websites, helping businesses get their payments quickly and securely.
    • Employers can sign up for direct deposit with their financial institutions even after applying for the CEWS.
    • It is recommended that employers register by May 3 in order to receive their first CEWS payment through direct deposit.
    • Visit ca/cra-direct-deposit or your financial institution’s website for more information.
    • If employers are not registered for direct deposit, they should allow additional time for their cheque to be delivered by mail to the address on their payroll account (RP).
    • Canadians can receive the CEWS wage subsidy or the Canada Emergency Response Benefit (CERB) — not both.
    • 100% refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan.
    • This refund covers 100% of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim the CEWS for those employees. xxi. Employers would be allowed to calculate their revenues under the accrual method or the cash method, but not a combination of both. Employers would select an accounting method when first applying for the CEWS and would be required to use that method for the entire duration of the program.
    • For registered charities and non-profit organizations, the calculation will include most forms of revenue, excluding revenues from non-arm’s length persons. These organizations would be allowed to choose whether or not to include revenue from government sources as part of the calculation. Once chosen, the same approach would have to apply throughout the program period.
  • In order to address the realities faced by the not-for-profit sector, high growth companies and new businesses, the Government has allowed for additional flexibility:
    • To measure their revenue loss, employers have the flexibility to compare their revenue of March, April and May 2020 to that of the same month of 2019, or to an average of their revenue earned in January and February 2020.
    • In recognition that the time between when revenue is earned and when it is paid could be highly variable in certain sectors of the economy, employers be allowed to measure revenues either on the basis of accrual accounting (as they are earned) or cash accounting (as they are received).
  • All employers would be expected to at least make best efforts to top up salaries to 100% of the maximum wages covered.
  • Those organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 10 per cent of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer (see 10% Wage Subsidy for more details).
  • For employers that are eligible for both the CEWS and the 10 per cent wage subsidy, any benefit from the 10 per cent wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the CEWS in that same period.