Canada Emergency Wage Subsidy (CEWS)
Now that the Federal Government has passed the necessary legislation regarding the Canada Emergency Wage Subsidy, as of April 11th, 2020, further information has come to light on this program. If you would like to read into these updates further, please visit the Government of Canada’s website at the following link: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html. We are outlining some of the key points below.
Please see the list of essential services as per the government of Alberta at this link: https://www.alberta.ca/essential-services.aspx. We are considered an essential service, but we would like to assure you that either way, we have the ability and configuration to work remotely, and therefore we will still be able to operate as normal.
The Canada Emergency Wage Subsidy (CEWS) – A seventy-five percent (75%) wage subsidy for up to 12 weeks, retroactive to March 15th, 2020.
Eligible employers have seen a drop of at least 15% in revenue in March 2020, and 30% decrease for the next months, and include:
- Individuals;
- Taxable Corporations;
- Partnerships consisting of eligible employers, non-profit organizations, and registered charities.
Revenue is calculated using the employer’s normal accounting method, either accrual or cash method, but not a combination. Employers will select an accounting method when they first apply for the CEWS and are required to use that method for the entire duration of the program.
The subsidy amount is for remuneration paid from March 15th, 2020 to June 6th, 2020 and is either (the greater of):
- 75% of the amount of remuneration paid, up to a maximum of $847 per week; or
- The lesser of [1] the amount of remuneration paid, up to a maximum of $847 per week, or [2] 75% of the employee’s pre-crisis weekly remuneration.
Eligible periods are as follows:
- March 15th, 2020 to April 11th, 2020
- 15% reduction in revenue
- Reference March 2020 over March 2019 or average of January and February 2020
- 30% reduction in revenue
- Eligible for Period 1 OR reference April 2020 over April 2019, or over average of January and February 2020
- 30% reduction in revenue
- Eligible for Period 2 OR reference May 2020 over May 2019, or over average of January and February 2020
Eligible employees are individuals who are employed in Canada other than those who have been without remuneration for 14 or more consecutive days in the eligibility period.
Eligible employers will be able to apply for the CEWS through the CRA’s My Business Account portal.
Employers eligible for the CEWS are entitled to receive a 100% refund for certain employer contributions to Employment Insurance (EI), the Canada Pension Plan (CPP), the Quebec Pension Plan, and the Quebec Parental Insurance Plan. This refund covers 100% of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible for the CEWS.
For those employers who are eligible for both the CEWS and the 10% Wage Subsidy, any benefit from the 10% wage subsidy generally reduces the amount available to be claimed under the CEWS in that same period. Calculation of the 10% Wage Subsidy is 10% of the remuneration paid between March 18th, 2020 and June 19th, 2020 to a maximum of $1,375 per employee. The maximum for each employer is $25,000.
It is imperative to keep good and up-to-date records of all benefits received, and calculations made. There will be penalties applied in any cases of fraudulent claims and improper claims. We hope you are all staying safe and well during this time of uncertainty. The King Business Solutions Centre is currently operating within our standard office hours, but our front interior door is locked. You are welcome to drop-off and pick-up from our video monitored front vestibule. We also have a client portal, email, and fax capabilities. Give your bookkeeper a call, we are here to help!