HPAC Magazine

Feds release details of the Canada Emergency Wage Subsidy

The subsidy will apply at a rate of 75% of the first $58,700 normally earned by employees (up to $847/week) lasting for a 12-week period, from March 15 to June 6, 2020. Employers must suffer a drop in gross revenues of at least 30% in March, April or May, compared to 2019, to be eligible.

April 2, 2020   HPAC Magazine

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Following up on the wage subsidy program announced by the Prime Minister to support Canadians and businesses facing hardship as a result of the global COVID-19 outbreak, the Federal Government has announced further details of the proposed Canada Emergency Wage Subsidy:

  • The Canada Emergency Wage Subsidy would apply at a rate of 75% of the first $58,700 normally earned by employees – representing a benefit of up to $847 per week. The program would be in place for a 12-week period, from March 15 to June 6, 2020.
  • Eligible employers who suffer a drop in gross revenues of at least 30% in March, April or May, when compared to the same month in 2019, would be able to access the subsidy.
  • Eligible employers would include employers of all sizes and across all sectors of the economy, with the exception of public sector entities.
  • For non-profit organizations and registered charities similarly affected by a loss of revenue, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their circumstances. The government is also considering additional support for non-profits and charities, particularly those involved in the front line response to COVID-19. Further details will be announced in the near term.
  • An eligible employer’s entitlement to this wage subsidy will be based entirely on the salary or wages actually paid to employees. All employers would be expected to at least make best efforts to top up salaries to 100% of the maximum wages covered.

Eligible employers would be able to access the Canada Emergency Wage Subsidy by applying through a Canada Revenue Agency online portal. Details regarding how to apply are still to come.

Organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 10% of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.

The program is designed to enable employers to re-hire workers previously laid off, and to keep those who are already on payroll, so that Canada’s workforce and supply chains are able to return from this crisis in a strong position.

Other business-related initiatives include:

  • Allow businesses, including self-employed individuals, to defer all GST/HST payments until June, as well as customs duties owed for imports.
  • Launch the new Canada Emergency Business Account. This program will provide up to $25 billion to eligible financial institutions so they can provide interest-free loans to small businesses, including not-for-profits. These loans – guaranteed and funded by the Government of Canada – will ensure that small businesses have access to the capital they need, at a zero-per-cent interest rate, so they can pay for rent and other important costs over the next number of months.
  • Launch the new Small and Medium-sized Enterprise Loan and Guarantee program that will enable up to $40 billion in lending, supported through Export Development Canada and Business Development Bank, for guaranteed loans when small businesses go to their financial institutions to help weather the impacts of COVID-19. This is intended for small and medium-sized companies that require greater help to meet their operational cash flow requirements.
  • Extend the maximum duration of the Work-Sharing program, from 38 weeks to 76 weeks, for workers who agree to reduce their normal working hours because of developments beyond the control of their employers.

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