April 8 update on 75% Canada Emergency Wage Subsidy (CEWS):

  • 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.

  • Eligibility – Employers may also use the average of their revenue earned in January and February 2020 as the benchmark for decline in revenue.  The selected method would be required to be used for the entire duration of the program.

  • Eligibility - 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. 

  • Eligibility - Special rules would also be provided to address issues for corporate groups, non-arm’s length entities and joint ventures.

  • Eligibility – NPOs and Charities will have the option to include/exclude government funding in calculating revenue. Again, the selected method would be required to be used for the entire duration of the program. 

  • Eligibility – For non-arm’s length (NAL) employees, the subsidy would only be available where the employee was employed prior to March 15, 2020.  The subsidy
    in respect of NAL salaries is also limited to 75% of “pre-crisis remuneration”.
    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.

  • Eligibility – Where individuals may have collected the Canada Emergency Response Benefit, the CEWS may not be available.  Adjustments to how these programs interact are being made to encourage recently laid off workers to be re-hired.

  • For employers and employees that are participating in a Work-Sharing program, EI
    benefits received by employees through the Work-Sharing program will reduce the
    benefit that their employer is entitled to receive under the CEWS.

  • Minister Morneau mentioned in his press conference on April 8, 2020 that penalties would be 225% of funds received.  It is uncertain whether one of the sources made an error, or whether they were referring to different provisions.

  • Additional support – Employers eligible for the CEWS will be entitled to receive a 100% refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. This refund would apply to the entire amount of employer-paid contributions in respect of remuneration paid to furloughed employees (no work whatsoever is being done in the relevant week) in a period where the employer is eligible for the CEWS in respect of that employee.  This refund would not be subject to the weekly maximum benefit per employee of $847 that an eligible employer may claim in respect of the CEWS. There would be no overall limit on the refund amount that an eligible employer may claim.

  • Timing – Aiming to deliver this program within 3 weeks.

  • Timing – Parliament will need to be recalled to pass legislation on this subsidy.


Benefits for Individuals:

  • The Prime Minister repeated his previous comments that the CERB (Canada Emergency Response Benefit), while helping many Canadians, does not reach everyone who needs assistance.

  • The Government is looking at extending support to seniors, students, individuals who experience a drop in income but are still earning limited amounts, and those working in long term care.

  • Enhancements to the Canada Summer Job Program, including:

    • 100% subsidy for students;

    • Extend job placements to winter to consider jobs starting later; and

    • Extend program to allow for part-time workers.

 BIG THANKS to Video Tax News for summarizing and updating us!!

Jane Zhao