By Government of Canada

Keeping the Economy Moving

Extending the Canada Emergency Wage Subsidu

Oct 27, 2020 | 9:03 AM

A proposal has been made to continue the CEWS until June 2021, including possible changes to the rates and top-up calculation. Read the October 14 announcement and check back soon for details.

Applications for claim period 7 (August 30, 2020, to September 26, 2020) are now open.

As a Canadian employer who has seen a drop in revenue due to COVID-19, you may be eligible for a subsidy to cover part of your employee wages, retroactive to March 15. This subsidy will enable you to re-hire workers, help prevent further job losses, and ease you back into normal operations.

Go right to the calculator if you already know how the subsidy works.

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• What the changes are: Canada Emergency Wage Subsidy (CEWS)
  The latest changes, why you should apply, and the basics of how it works
• Who can apply: Canada Emergency Wage Subsidy (CEWS)
  Find out if you are eligible to apply for the subsidy
• Periods you can apply for: Canada Emergency Wage Subsidy (CEWS)
  Claim period dates and which periods you can apply for today
• Which of your employees qualify: Canada Emergency Wage Subsidy (CEWS)
  Which employees you can include in your claim and payroll information you will need
• Calculate your subsidy amount: Canada Emergency Wage Subsidy (CEWS)
  Use our calculator to find out how much your wage subsidy may be
• How to apply: Canada Emergency Wage Subsidy (CEWS)
  How to submit an application for the wage subsidy
• After you apply: Canada Emergency Wage Subsidy (CEWS)
  Getting your payment, reapplying for other periods, changing a claim, and our review of claims
• Contact us about CEWS: Canada Emergency Wage Subsidy (CEWS)
  How to contact the CRA about the wage subsidy

Backgrounder

The Canada Emergency Wage Subsidy (CEWS) has been working to protect jobs and help businesses, charities and non-profits re-hire workers. To date, more than 3.7 million Canadian workers have been supported by this program. Throughout the pandemic, income supports like the wage subsidy have helped families and workers across Canada know where the next paycheque is coming from and keep our communities strong.

The government’s recent Speech from the Throne committed to extending the wage subsidy through to June 2021 as part of its work to create over one million jobs and restore employment to pre-pandemic levels. The government confirmed its intention to extend the wage subsidy until June 2021 and is providing details on the parameters of the wage subsidy that are proposed to apply until December 19, 2020. In addition, other enhancements are being proposed to the program to ensure that it provides continued support to employers and responds to the health and economic situation as it evolves. These changes complement the new Canada Emergency Rent Subsidy.

The wage subsidy consists of a base subsidy for all employers whose revenues have been impacted by the pandemic, as well as a top-up subsidy for employers that are hardest hit. There is a separate rate structure for furloughed workers. It is proposed that the base subsidy rate for September 27 to October 24, 2020 continue to apply from October 25 to December 19, 2020. As such, the maximum base subsidy rate would be set at 40 per cent for this period, and the maximum top-up subsidy rate would remain at 25 per cent.

To make the top-up subsidy more responsive to sudden changes in revenue, the revenue-decline test for the base subsidy and the top-up subsidy would be harmonized from September 27 onward. Instead of using the current three-month revenue-decline test for the top-up subsidy, both the base and top-up would be determined by the change in an eligible employer’s monthly revenues, year-over-year, for either the current or previous calendar month. This means an employer with a 70 per cent or greater revenue loss in a period would be eligible for a 65 per cent wage subsidy. For employers using the alternative revenue-decline test (announced on April 8, 2020), both the base subsidy and the top-up subsidy would be determined by the change in an eligible employer’s monthly revenues relative to the average of its January 2020 and February 2020 revenues.

To ensure that the change in the revenue-decline test does not lead to a less generous wage subsidy, the wage subsidy program would include a “safe harbour” rule applicable from September 27 to December 19, 2020. This rule would entitle an eligible employer to a top-up subsidy rate that is no less than it would have received under the three‑month revenue-decline test.

As of October 25, 2020, the wage subsidy for furloughed employees would be aligned with the benefits provided through Employment Insurance to ensure equitable support to Canadian workers and in accordance with the announcement the government made on July 17 unveiling adjustments to the wage subsidy. This means the subsidy per week in respect of an arm’s length employee (or a non-arm’s length employee who received pre-crisis remuneration for the relevant period) would be: the amount of eligible remuneration paid in respect of the week; or, if the employee receives remuneration of $500 or more in respect of the week, the greater of $500 and 55 per cent of pre-crisis remuneration for the employee, up to a maximum subsidy amount of $573.

The government will issue a technical backgrounder on the extended wage subsidy, including details on eligibility.

The government has revised its 2020-21 estimate of the cost of the wage subsidy program. Taking into account these revisions, it is estimated at $68.5 billion until the end of Period 10 (December 19, 2020).

The government intends to introduce legislation that would implement the extended wage subsidy.