Parliament Approves Canada Emergency Wage Subsidy (CEWS)
Over the weekend, after hours of negotiation between political parties, the House of Commons and the Senate passed legislation which introduced the Canada Emergency Wage Subsidy (CEWS). The CEWS will provide a 75 percent wage subsidy to eligible employers for up to 12 weeks and will be retroactive to March 15.
Companies whose revenue dropped at least 15 percent in March 2020 and 30 percent in April and May can be eligible for the wage subsidy. Revenue is calculated using the employer’s standard accounting method and excludes revenues from extraordinary items and amounts on account of capital. The actual subsidy will cover 75 percent of the first $58,700 earned, up to a maximum benefit of $847 per week per employee. Eligible renumeration can include salary, wages and other benefits.
The CEWS was also expanded to provide a 100 percent refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan and the Quebec Parental Insurance Plan. This refund will apply for each week that the employer is eligible to claim the CEWS.
Businesses will be able to apply for the CEWS through the Canada Revenue Agency’s My Business Account portal once available. The government has signaled that the application process will be available soon and that the subsidies will begin to flow in the next three or four weeks.
For more information, please visit: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html