Understanding The Canada Emergency Wage Subsidy – COV19 Response

April 4, 2020

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Applying for  The Canada Emergency Wage Subsidy 

The financial impact to many businesses, of all sizes, is being felt and with the expectation that businesses will remain at reduced operations which is impacting the ability to maintain payroll and keep employees working, the Government of Canada unveiled The Canada Emergency Wage Subsidy.

The program can be applied for retroactively from March 15, 2020 forward for those who are eligible.

At this time the benefit is expected to be in place for a period of up to 12 weeks with the intention of allowing businesses to maintain the staff required to continue operations.

For businesses who may be seeking assistance for other capital requirements, please visit 

https://www.canada.ca/en/department-finance/economic-response-plan.html to view the entirety of Canada’s Economic Response Plan.

What you need to know:

Revenue 

  • To be eligible your businesses revenue must have declined 30% during the month when you perform a year to year comparison.
  • What does this mean? if in March 2019 your revenue was $100,000 your revenue in March 2020 must be $70,000 or less to meet the revenue requirement to apply.
  • You will be required to attest in your application to this decline in Revenue during the application process.

Use the table above to perform your revenue comparisons to support your application.

Employees

  • If you have advised your employees to apply for the CERB benefit you will NOT be eligible to apply for wage subsidy for the period in which employees are collecting CERB – it is one or the other.  The subsidy is available for ACTIVE payroll periods.
  • If you call employees back and are eligible for the Wage Subsidy, employees should NOT be claiming CERB – employers are responsible for ensuring the messaging is accurate and claims are being made in accordance with the terms of the benefit plans.

Other Important Items:

  • Any business eligible for the 10% Wage Subsidy also being offered by the Government of Canada will have the 75%wage subsidy reduced by amounts received under that benefit.
  • ANY benefit received under these subsidy programs are considered government assistance and considered taxable income.
  • Expenses for renumeration MUST be reduced by any amount of subsidy received by the Government of Canada.

How to Apply: CRA My Business Portal

Disclaimer: If there are any portions of the application determined to be fraudulent or misleading, you will be required to repay a portion of subsidies back to the Government of Canada.

Source: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html

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