75% wage subsidy Key points summarized here (April 8th)
Based on most of your questions I received here is the 75% wage subsidy Key points summarized here (April 8th). This should answer most of your questions as of now.
When can you apply:
Process starts in three weeks
Periods:
Periods applies to March 15 - June 6
Eligibility:
- 15% decline in revenue for month of March (rather than 30% as originally announced) will qualify employers for the subsidy. A 30% decline will still be required for subsequent periods.
- Employers will be allowed to measure revenues either on the basis of accrual accounting (as they are earned) or cash accounting (as they are received). Again, the selected method would be required to be used for the entire duration of the program.
Subsidy amount:
Arm’s length (NAL) employees: the subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:
75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
the amount of remuneration paid, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration, whichever is less.
Non-arm’s length (NAL) employees (ie shareholders), the subsidy would only be available:
- Employee was employed prior to March 15, 2020.
- The subsidy in respect of NAL salaries is also limited to 75% of “pre-crisis remuneration” to a maximum benefit of $847 per week
The pre-crisis remuneration for a given employee would be based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration
Interaction with 10 per cent Wage Subsidy
On March 18, 2020, the Prime Minister announced a temporary 10 per cent wage subsidy. For employers that are eligible for both the Canada Emergency Wage Subsidy and the 10 per cent wage subsidy for a period, any benefit from the 10 per cent wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period.
Interaction with the Canadian Emergency Response Benefit
An employer would not be eligible to claim the Canada Emergency Wage Subsidy for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit.
Employers who are not eligible for the Canada Emergency Wage Subsidy would still be able to furlough employees who will receive up to $2,000 a month.
How to Apply
Eligible employers would be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly
New penalty measures:
25% penalty for “artificial transaction” to reduce revenue, other penalties of up to 225% of the improper claim and up to five years in prison.