08 Apr COVID-19: Emergency Wage Subsidy & Canada Summer Jobs

The Federal Finance Minister has announced further details and clarifications on the Canada Emergency Wage Subsidy.

Please read below for the latest information.

Canada Emergency Wage Subsidy (“CEWS”)

• As shared in an earlier update, the CEWS will cover up to 75% of employees’ wages for Eligible Employers. The maximum Subsidy is $847 per week per employee. This is based on 75% of a capped salary of $57,800. There is no Employer maximum.
• Businesses will only need to show a decrease in gross revenues of 15% for March. The 30% test will still apply for the months of April and May.
• Where the year-over-year comparison is not possible or would disqualify them, employers now have the option of comparing their March, April, or May revenues with their revenues for the average of January and February 2020.  Once a calculation method has been determined for applying for CEWS, it must be used for the duration of the program.
• Employers will be allowed to calculate their revenues under either the accrual method or the cash method, but not a combination of both. Again, once a calculation method has been determined for applying for CEWS, it must be used for the duration of the program.
• Charities and non-profits now have the option to either include or exclude their government funding sources in their revenue comparisons when determining their eligibility.
• Employers that are eligible for the CEWS will be eligible for a 100% refund of certain employer portions of the Employment Insurance and Canada Pension Plan. The portion refunded is where the employee is paid for a specific week but does not perform any work for the employer that week. This is in addition to the maximum benefit of $847 per week. Employers would be required to collect and remit for EI and CPPs as normal, but would receive a refund as part of the CEWS.

This legislation will require Parliamentary approval. Therefore, there may be more changes announced prior to the passing of the legislation.

Canada “Summer” Jobs Changes

The Government announced changes to the Canada Summer Jobs program so that businesses can get a 100% subsidy of the minimum wage paid for student workers. The program will now be extended to February 2021. The application process will be re-opened shortly.

For More Information

Please visit: https://www.canada.ca/en/department-finance/news/2020/04/additional-details-on-the-canada-emergency-wage-subsidy.html

If you have any questions about the information outlined above, please reach out to our team at  we_are@clearlinecpa.ca.

We will continue to keep you updated as things unfold.

Team Clearline