Wage subsidy structure to stay the same until June but comparator months change
Ottawa has announced it is planning to maintain the rate structures for the Canada Emergency Wage Subsidy (CEWS) until June 5, 2021.
This means that the maximum base wage subsidy rate for active employees would stay at 40 per cent, and the maximum top-up wage subsidy rate for employers most adversely impacted by the pandemic would stay at 35 per cent ― so the maximum combined wage subsidy rate would stay at 75 per cent.
For furloughed employees, the weekly wage subsidy for the period would be the lesser of the following: the amount of eligible remuneration paid in respect of the week and the greater of: $500 and 55 per cent of pre-crisis remuneration for the employee, up to a maximum subsidy amount of $595.
This is to ensure that people’s wage subsidy stays aligned with benefits under employment insurance (EI), says the government.
“Employers would also continue to be entitled to claim under the wage subsidy their portion of contributions in respect of the Canada Pension Plan, EI, the Quebec Pension Plan and the Quebec Parental Insurance Plan for furloughed employees,” according to the government.
In August 2020, the federal government launched an updated CEWS calculator for employers.
Since the wage subsidy program launched, an organization's decline in revenues has generally been determined by comparing its change in revenues with the previous year or early 2020. But since the COVID-19 pandemic has gone on for a year, the government now says the prior reference periods would be based on calendar months from 2019, effective as of the qualifying period from March 14 to April 10, 2021.
Amid the perils of the COVID-19 pandemic, many Canadian employers are taking advantage of CEWS – and finding it effective, according to a survey.
