Further details were provided today by Prime Minister Trudeau and Finance Minister Morneau with respect to the 75% wage subsidy announced on Friday (the Canada Emergency Wage Subsidy (CEWS)). The wage subsidy provides government funding for eligible businesses for a period of up to three months, retroactive to March 15. The wage subsidy is equivalent to 75% of the first $58,700 of an employee’s wage, or up to a maximum of $847 per week, per employee.
Eligibility requirements are fairly broad. All businesses, regardless of size, are eligible, including not for profits. Businesses that are publicly funded are not eligible. The eligibility requirement is a 30% decline in revenue. The percentage decline in revenue is determined by comparing March, April and May 2020 to March, April and May 2019.
Applications for the wage subsidy will be made through the Canada Revenue Agency and should be available within 3 – 6 weeks. Employers should register for direct deposit. The application process will involve the Employer:
- Attesting that they are doing everything they can to pay the additional 25%;
- Showing the pre-crisis income of Employee; and
- Prove that the Employee has been paid.
The government has indicated that there will be severe penalties for anyone taking unfair advantage of this program.
Further details were also provided with respect to the Canada Emergency Response Benefit (CERB). This is a taxable benefit of $2,000 per month for a period of up to 4 months for eligible workers who have lost their income due to COVID-19. Applications for CERB online will begin on April 6 on the CRA website, for those individuals who have not already applied for EI. Employees receiving the wage subsidy are not eligible for the CERB. Applicants must attest to their eligibility on a monthly basis. For those who have already applied for EI, there is no need to do anything further. Eligibility requirements for the CERB are as follows:
- Must be a resident in Canada;
- Must be at least 15 years old;
- Must have stopped working because of COVID-19 or be eligible for Employment Insurance regular or sickness benefits;
- Must have had income of at least $5,000 in 2019 or in the 12 months prior to the date of the application; and
- Are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four week period. For subsequent benefit periods you must expect to have no employment income.
As more details become available regarding the CEWS or the CERB we will provide further updates. Read the Federal Government Covid-19 Economic response plan here.
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