Barbara Green and Samuel Mosonyi.
April 21, 2020 (last updated April 27, 2020)
COVID-19 has changed the landscape for employers and employees. We are writing this article to provide some clarity as well as to inform employers and employees what government support is available to them.
Canada Emergency Wage Subsidy (“CEWS”) (75%)
This subsidy is provided by the federal government to qualifying businesses and is retroactive to March 15, 2020.
Time Period: In effect from March 15 to June 6, 2020.
Amount: 75% on the first $58,700 normally earned by employees, up to $847 per week
Eligible Employee: An individual employed by an eligible entity who has been without remuneration for at least 14 days in the qualifying period
Eligible Entities: Individuals, trusts, taxable corporations, various partnerships, non-profit organizations, registered charities (public bodies are not eligible)
Qualifying Periods: To determine whether an employer is eligible, consult the following chart.
|Claiming period||Required reduction in revenue||Reference period for eligibility|
|Period 1||March 15
|15%||March 2020 over:
|Period 2||April 12
|30%||Eligible for Period 1
April 2020 over:
|Period 3||May 10
|30%||Eligible for Period 2
May 2020 over:
If an employer is found eligible for a specific period, they will automatically qualify for the next period. The employer must requalify for the third period.
Once a reference period is determined (either last year’s revenues or the average of January and February 2020), that reference period must be used for the calculation of all periods.
There are further criteria regarding eligible remuneration and other conditions.
Temporary Wage Subsidy (“TWS”) (10%)
The TWS was announced prior to the CEWS. Employers who do not qualify for the CEWS can apply for the TWS, and vice-versa. Amounts given as part of one subsidy will claw back any amounts that can be received from the other subsidy.
Eligible Employer: An individual (other than a trust), various partnerships, non-profit, registered charity, or certain Canadian-controlled private corporations (CCPC) that have an existing business and payroll program account with the CRA on March 18, 2020 and that pay salary, wages, or other remuneration to an eligible employee
Eligible Employee: An individual who is employed in Canada
Amount of Subsidy: 10% of the remuneration paid between March 18, 2020 and June 19, 2020, to a maximum of $1,375 per employee and $25,000 for the employer
Canada Emergency Response Benefit (“CERB”)
This program provides support to workers who have stopped working and are without employment income.
Amounts: $500 per week for up to 16 weeks
Eligible workers: Those who reside in Canada, are at least 15, have stopped working for reasons related to COVID-19 for at least 14 consecutive days within a 4-week period, had employment or self-employment income of at least $5,000 in the 12 months prior to the date of the application, and have not quit their job voluntarily
Time of Availability: Available from March 15, 2020 to October 3, 2020.
Other Programs Available
Please contact us for information about any of the following programs:
- Canada Emergency Business Account: interest-free loans may be available of up to $40,000 for certain small businesses and not-for-profits
- Federal Work-Share Program: this is a three-way agreement between an employer, employees, and Service Canada where employees work 40-90% of a regular work week and Service Canada supplements some of the employees’ lost income. Available from 6-76 weeks
- Supplementary Unemployment Benefit Plans: this is established by an employer to top up an employee’s EI benefits during unemployment; the plans must be registered with Service Canada
- Canada Emergency Business Account: interest-free loan of up to $40,000 for eligible small businesses and not-for-profits. Repaying the loan on or before December 21, 2022 will result in loan forgiveness of 25% (up to $10,000)
- BDC Working Capital Loans: up to $2 million with flexible repayment terms for qualifying businesses
- Business Credit Availability Program: Loan Guarantee for Small and Medium-Sized Enterprises (SMEs) and Co-Lending Program for SMEs, available through Business Development Bank of Canada (BDC) and Export Development Canda (EDC)
- WSIB Premium Payment Deferral: deferring premium reporting and payments until August 31, 2020
- Ontario Employer Health Tax Exemption: increased exemption amount from $490,000 to $1 million and a five-month relief period for Ontario businesses who are unable to file or remit their provincial taxes on time due to the special circumstances caused by COVID-19
- Ontario-Canada Emergency Commercial Rent Assistance Program: an eligible commercial landlord can apply for a forgivable loan equal to 50% of the landlord’s profit before costs if it enters into a rent forbearance agreement with its qualifying tenant that decreases the amount of rent payable by the tenant to 25% of the landlord’s profit before costs and includes a prohibition on evictions. Further conditions apply.
Original post here.