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CEWS Subsidy Extended

Huw Evans, Canadian Auto Journal, CEWS, extension, subsidies, restarting the economy, Government of Canada, COVID-19
The Government of Canada has announced changes to the CEWS program including an extension until December 19. PHOTO Shutterstock Studio8

The Government of Canada has announced an extension to the Canadian Emergency Wage Subsidy Program (CEWS) to December 19, 2020.

First announced on April 1, 2020, the program provided employers with a subsidy that covered up to 75 % of an employee’s wages up to $847 per week.

The subsidy was designed to provide financial support for employers hard hit by the COVID-19 to protect jobs, as well as allowing them to re-hire furloughed or laid-off staff and provide workers with a quality income.

Besides extending the CEWS program, the changes instigated on July 21 as part of Bill C-20 (An Act Respecting further COVID-19 measures) also include a number of amendments. Among them are:

  • Base subsidy for all employers impacted by COVID-19: Effective from July 5, 2020, employers are eligible for a base CEWS amount for all their employees. This is a specified amount applied to the level of remuneration paid to an employee for the eligibility period up to an amount of $1,129 per week. Unlike before, the rate of the base CEWS is not based on a specific amount of revenue decline but varies depending on the level of revenue declined experienced by the business. And because it states that revenue declines can be less than 30 percent (employers that have experienced a revenue decline are all now eligible to qualify for the CEWS subsidy).

 

  • Top-up subsidy for the most adversely impacted employers: This provides an additional 25% subsidy to those employers that were hit hardest by the COVID-19 pandemic. The eligibility for this top-up is based on the employer’s revenue drop compared with revenues in the preceding 3 months to the same months during 2019. Those employers that witnessed a 3-month average revenue decline of more than 50 % would be eligible to receive a CEWS top-up of 1.25 times the average revenue drop that exceeds 50%, up to a maximum top-up rate of 25% (achievable if the business witnessed a 70% revenue decline). Along with the CEWS base rate, this top-up rate applies to employee remunerations of up to $1,129 per week.

 

For more details on these CEWS amendments visit canada.ca/department-finance.

 

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