April 9 – Update to Emergency Wage Subsidy
POSTED April 09, 2020 BY Yuri Kostowskyj Blog
The federal government continues to provide details on its proposed 75% Canada Emergency Wage Subsidy (“CEWS”) to ensure it benefits as many employers as possible and helps their employees keep their jobs.
On April 8, 2019 the federal government provided the following details:
- Revenue for the purposes of the CEWS can be calculated based on the accrual or cash basis of accounting. This will help businesses that continue to generate revenue but have experienced a significant decline in their cash flow qualify for the CEWS.
- Employers will have to show that their revenue decreased by 15% for March (rather than the initial 30%) to qualify for the CEWS. This change recognizes that the impact of Covid-19 on businesses that started half-way through the month of March.
- Employers will be able to use the average of their January and February 2020 revenue compared to their March, April and May 2020 revenue, to determine the 15% (March) or 30% (April and May) revenue decline if they choose to do so. They still have the option to use March, April and May 2019 revenue and compare to the same month in 2020 to determine the revenue decline.
- Certain employers will receive a refund of the contributions that they make towards Employment Insurance and the Canada Pension Plan on behalf of their employees. The reimbursement will generally be available if the employee is being paid but does not perform any work for the employer.
We continue to wait for the government to release the draft legislation for the CEWS so that we can gain a better understanding of the rules and expect them to do so soon. You can read more about the CEWS here: https://www.canada.ca/en/department-finance/news/2020/04/additional-details-on-the-canada-emergency-wage-subsidy.html
All the best to you and your loved ones,