The Canada Emergency Wage Subsidy
What It Means for Canadian Businesses
It would provide a 75-per-cent wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020. This wage subsidy aims to prevent further job losses, encourage employers to re-hire workers previously laid off as a result of COVID-19, and help better position Canadian companies and other employers to more easily resume normal operations following the crisis.
Eligible employers would include individuals (sole Proprietors), taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities. This subsidy would be available to eligible employers that see a drop of at least 30 per cent of their revenue. In applying for the subsidy, employers would be required to attest to the decline in revenue. An employer’s revenue for this purpose would be its revenue from its business carried on in Canada earned from arm’s-length sources. Revenue would be calculated using the employer’s normal accounting method, and would exclude revenues from extraordinary items and amounts on account of capital.
Amount of Subsidy
The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be
- 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week
There would be no overall limit on the subsidy amount that an eligible employer may claim. Employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.
How to Apply
Eligible employers would be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly. Penalties may apply in cases of fraudulent claims.
Interaction with 10 per cent Wage Subsidy
On March 18, 2020, the Prime Minister announced a temporary 10 per cent wage subsidy. For employers that are not eligible for Canada Emergency Wage Subsidy the 10 per cent wage subsidy for a period, is still available.