Current and accurate as of July 22, 2020
On July 13, 2020, Prime Minister Trudeau announced an extension to the Canada Emergency Wage Subsidy Program. On July 21, 2020, the Government passed the extension legislation as well as changes to the criteria for qualifying businesses. This update addresses these changes related to the ongoing Coronavirus pandemic and its effects on businesses and their workforces.
We encourage you to reach out to discuss how these changes will impact your business operations.
The CEWS program is administered based on four-week periods, which are called Qualifying Periods. The new changes extend the program to December 19, 2020 for a 10th Qualifying Period.
The extended Qualifying Periods are:
Previously, the program was available to businesses who could demonstrate a drop in qualifying revenue of 15% or more in March 2020, and 30% or more in April, May, and June 2020. That is no longer the case.
Now businesses that have experienced any revenue drop are eligible for the subsidy, although the subsidy varies based on the amount of their decrease in revenue.
The new CEWS allows businesses to qualify on a sliding scale depending on their losses. The calculation of eligible amounts is based on two amounts and only apply to active employees:
The government has included a “Safe Harbour Rule” to address the above situation. The Rule means that for Qualifying Periods 5 and 6, a business will be eligible for the higher of the amount under the old program rules or the new program rules. In other words, businesses are eligible for a CEWS rate that is not lower than the rate that they would have received if the rules had not changed.
For Qualifying Periods 5 and 6, non-active or furloughed employees would be subject to the same subsidy calculation as under the old rules or in Qualifying Periods 1 to 4. However, starting in Qualifying Period 7, the CEWS support will be brought in line with the benefits provided through the Canada Emergency Response Benefit (CERB) and Employment Insurance (EI) programs. The terms of the applicable regulations have yet to be released.
Feel free to contact us with any questions or if we can be of assistance in any way.
The definition of eligible entities has been expanded to include:
Please note that this is a rapidly changing and evolving situation, and that this information is based on our best knowledge at the current time.
Due to the unique circumstances of every business, not all information is applicable to all employers, so please feel free to contact us with any questions or if we can be of assistance in any way.
Also, we note that this information is current as of July 22, 2020 and will be subject to change following this date.