Many, if not all, Canadian businesses have been affected by the COVID-19 outbreak. However, Canada introduced the Canada Emergency Wage Subsidy (CEWS) to support employers during these troubling times. In short, this subsidy covers 75% of employee wages for eligible employers. Therefore, if you’re interested in finding out more about CEWS including what it is or whether you’re an eligible employer, keep reading below.
What is it?
To reiterate, the CEWS provides eligible employers a subsidy of 75% of each employee’s wages up to a maximum of $847 per week. To be an eligible employer, your business must see at least a 15% drop in qualifying revenue in March 2020 and 30% for April and May when compared to the same period in 2019. For more information on qualifying revenue, being an eligible employer, and how you can apply, see the following subsections.
Why is it important?
The purpose of the CEWS is to provide support to employers whose employees’ work has been affected by COVID-19. Thus, this benefit helps the business and ultimately plays a role in kick-starting the economy as restrictions are lifted. In other words, laid off workers can be rehired and further job losses can be prevented to place businesses in a position where resuming normal operations is easier.
Prime Minister Justin Trudeau has also recently extended the CEWS period to the end of August. Originally, the subsidy was set to expire during the first week of June. By doing this, businesses will be able to channel the necessary resources towards public health prevention measures in order to accommodate the changes imposed by COVID-19.
Who is eligible?
An eligible employer is one that is:
- a corporation
- an individual
- a registered charity
- a person that is:
- an agricultural organization;
- a board of trade or a chamber of commerce;
- a non-profit corporation for scientific research and experimental development;
- a labour organization or society;
- a benevolent or fraternal benefit society or order; and
- a non-profit organization;
- a partnership, each member of which is a person or partnership described in this list
For more details on exemptions and qualifications, please see the following government website here.
Do you meet the requirements?
Although you may be an eligible employer, you must also meet the following conditions for the given claim period.
- Had an open payroll program account with the CRA on March 15, 2020.
- Experienced the required reduction in revenue for the applicable claim period(s).
- Submitted the proper application prior to the deadline.
How is the qualifying revenue reduction determined?
|Claim Periods||Required reduction in revenue||Reference periods for comparison under the general approach||Reference periods for comparison under the alternative approach|
|Period 1||March 15 to April 11, 2020||15%||March 2020 over March 2019||March 2020 over average of January and February 2020|
|Period 2||April 12 to May 9, 2020||30%||April 2020 over April 2019||April 2020 over average of January and February 2020|
|Period 3||May 10 to June 6, 2020||30%||May 2020 over May 2019||May 2020 over average of January and February 2020|
How can you apply?
You may apply online through one of the following:
- My Business Account
- Represent a Client
- Web Forms Application
However, note that you need to submit a new application for every claim period that you are eligible for. Should you require more details or guidance throughout the application process, see the following link. Furthermore, the team at Sodagar & Co. is happy to assist any client with navigating through the entire process. With the many benefits provided by the government, it may get confusing but we pride ourselves in keeping up-to-date with all things pertaining to requirements and eligibility.