The Federal Government provided a number of financial aids to Canadian employers to assist with economic challenges during the COVID-19 crisis. In this video, Ron Minken, Founder and Managing Lawyer, covers some of the common questions relating to Bill C-14 – Canadian Emergency Wage Subsidy (CEWS).
$73 Billion Dollar Canadian Emergency Wage Subsidy, referred to as COVID-19 Emergency Response Act, No. 2, became law on April 11, 2020 when our Federal Parliament passed Bill C-14 providing clarity on how the Canadian Emergency Wage Subsidy (CEWS) will help Canadian businesses survive the impact of COVID-19 and is additional to the Temporary Wage Subsidy that became law on March 25, 2020. In this video Ron Minken, Founder & Managing Lawyer at Minken Employment Lawyers, provides some of the answers to the questions posed by many Canadian Employers about the “Largest Economic Policy since World War II” as referred to by our Prime Minister:
- What is the purpose of the wage subsidy?
To rehire workers or continue their employment so that businesses resume to pre-COVID-19 conditions.
- What is the amount of the subsidy?
75% (previously 10%) on the first $58,700 of income to a maximum of $847 per week.
- Which Employers can take advantage of it?
Eligible employers including individuals, taxable corporations, partnerships, non-profit organization and registered charities – this excludes government, otherwise they would have gobbled it all up!!
- Which Employees does it apply to?
Eligible employees employed in Canada. It does not apply to employees who have not been paid for 14 or more consecutive days in the eligibility period.
- What if an Employee is eligible for CERB?
The employer is no longer disqualified from claiming the wage subsidy – they were disqualified before.
- What time period does the subsidy apply to?
March 15th – June 6th. This has been divided into 3 periods – March 15th to April 11th, April 12th to May 9th, May 10th to June 6th.
- What is the criteria?
A revenue drop of at least 15% in the 1st period. It changes to a revenue drop of at least 30% for the following 2 periods.
- How is the wage subsidy calculated?
The period to demonstrate a loss was based on monthly revenues year-over-year for the same month. Now there is an alternative benchmark which considers the average of revenues earned in January and February 2020, as compared to the entire month of March, April and May. If there is eligibility in the 1st period, then there should be eligibility in the 2nd and 3rd periods.
- How do Employers confirm the criteria to apply?
In the application, employers are asked to confirm a decline in revenue. Employers are required to keep records demonstrating their reduction in arms-length revenues and remuneration paid to employees.
- When will the wage subsidy be paid?
Minister of Finance Morneau said it will be paid within 2 – 5 weeks.
- Is there retroactivity?
Yes to March 15th.
- How often should Employers apply?
The Parliamentary debates suggested that an Employer had to reapply each month – more details will be announced.
- What about taxability?
The wage subsidy is taxable. There is a reduction to the amount of remuneration expenses eligible for other federal tax credits.
Great care should be exercised to ensure an accurate understanding of the Canadian Emergency Wage Subsidy and more details will follow. If you have any questions on COVID-19 and your workplace and the new Canadian Emergency Wage Subsidy, please contact Minken Employment Lawyers at email@example.com or call us at 905-477-7011. Sign up for our newsletter to receive up-to-date COVID-19 information, including new legislation and Court decisions impacting your workplace.
Please note that this article is for informational purposes only and does not constitute legal advice.
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