Employers with less than 30-per-cent revenue loss now eligible for program
The federal government has given Bill C-20 royal assent, ensuring that the Canada Emergency Wage Subsidy (CEWS) program will continue until Dec. 19, 2020.
The bill – An Act respecting further COVID-19 measures – makes employers with less than a 30-per-cent revenue loss eligible for the program amid the pandemic. It also ensures those who have previously benefited could still qualify, even if their revenues recover and no longer meet the 30-per-cent revenue decline threshold.
Bill C-20 also:
- introduces a top-up subsidy of up to an additional 25 per cent for employers that have been most adversely affected by the COVID-19 crisis, particularly those in industries that are recovering more slowly
- ensures that employers that have already made business decisions for July and August will not receive a subsidy rate lower than they would have under the previous rules
- address technical issues with the CEWS identified by stakeholders, for example by providing continuity rules to address circumstances where an employer purchased all or substantially all of another entity’s business assets
- makes the proposed amendments to the CEWS previously introduced in Bill C-17, An Act respecting additional COVID-19 measures
The CEWS provides a subsidy of 75 per cent of an eligible employee's weekly earnings to a maximum of $847 per employee per week. The program was originally set to expire on June 6 and then was extended to Aug. 29
In May, the federal government extended the CEWS by an additional 12 weeks to Aug. 29, 2020. Earlier this month, Prime Minister Justin Trudeau announced it will be extended until December. The government also announced a further expansion of the program earlier this month.
Good news – but complicated
The changes are good news for employers – but also more complex, says Frederick Wong, manager of taxation services at BDO Canada in Vancouver.
“Any revenue decrease now gets you in for the subsidy, which is now geared to the magnitude of your revenue decrease. This opens up eligibility to many organizations and businesses, and is probably a better from a public policy perspective,” he says on LinkedIn.
While the extension of the CEWS program is welcome news for the business community, the amendments for the CEWS program add considerable complexity and risk for employers, says Shelley Ricketts, cloud accounting manager at KWB Chartered Professional Accountants in Edmonton.
“There are a number of calculations and various factors to consider and significant penalties can apply where an employer receives CEWS but is ultimately found not to be eligible.