What is the Canada Emergency Wage Subsidy (CEWS)?

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As a Canadian employer whose business has been affected by COVID-19, you may be eligible for a subsidy of 75% of employee wages for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020.

This wage subsidy will enable you to re-hire workers previously laid off as a result of COVID-19, help prevent further job losses, and better position you to resume normal operations following the crisis.

Program Highlights

  • Wage subsidies of 75% (up to $847) per week, per employee for the period of March 15th to June 6th, 2020.

  • No overall limit on the subsidy amount that an eligible employer may claim – meaning you can claim the subsidy for all your employees – no matter how many people your business carries on payroll.

  • Amounts are calculated based on the average weekly remuneration paid to the employee between January 1st and March 15th, 2020.

  • CEWS will also refund 100% of employer-paid contributions to eligible employees for EI, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan for each week that those employees are on leave with pay and are covered by the CEWS.

  • Eligible employers must have experienced a year-over-year drop in revenue of at least 15% between March 15th and April 11th, and 30% in the eligible month(s) following.

Who is an eligible employer?

To be eligible to receive the wage subsidy, you must:

  • ·       Be an eligible employer

  • ·       Have experienced an eligible reduction in revenue, and

  • ·       Have had a CRA payroll account on March 15, 2020

Types of eligible employers

  • ·       individuals (including trusts)

  • ·       taxable corporations

  • ·       persons that are exempt from corporate tax (Part I of the Income Tax Act), other than

    public institutions:

    • ·       Non-profit organizations

    • ·       Agricultural organizations

    • ·       Boards of trade

    • ·       Chambers of commerce

    • ·       Non-profit corporations for scientific research and experimental

      development

    • ·       Labour organizations or societies

    • ·       Benevolent or fraternal benefit societies or orders

  • ·       Registered charities

  • ·       Partnerships consisting of eligible employers

Public institutions are not eligible for the subsidy. This includes municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals.

What is an eligible revenue reduction?

You must determine if your reduced revenue makes you eligible to apply for the wage subsidy in a particular period.

If you determine that you qualify for the CEWS for one claim period, you will automatically qualify for the following claim period.

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, 202

Who are eligible employees?

An eligible employee is an individual employed in Canada by you (the 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.

Retroactively hiring and paying employees?

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 include them in your calculation for the subsidy.

How to apply

Beginning April 27, applications will be open for the Canada Emergency Wage Subsidy.

  • ·       Most businesses may apply using My Business Account

  • ·       If you represent a business, you may apply using Represent a Client

  • ·       Alternatively, you may apply using a separate online application form (available April 27)

The CEWS will be processed at the payroll program (RP) account level, so you will have to file a separate application for each RP account.

Find out more about eligible revenue, revenue reduction calculations, eligible renumeration, baseline renumeration, and calculating your subsidy amount at:

https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html

Information provided herein has been taken directly from the CRA website and is up to date as of April 21, 2020.