Skip to main content

Update on the Proposed Canada Emergency Wage Subsidy (CEWS)

The federal government revealed more details about the Canada Emergency Wage Subsidy (CEWS), a subsidy that will be provided to Canadian businesses to relieve some of the stress felt as a result of the slow-down in business because of COVID-19. This blog post contains information provided by Bill Morneau, the federal Minister of Finance, in a press conference held April 1, 2020.

The Subsidy

Eligible businesses will receive 75% of the first $58,700.00 of employee wages, per employee. That equates to a total of up to $847.00 per week, based on a yearly salary of $58,700.00. When the subsidy rolls out in approximately 6 to 8 weeks, it will be back-dated to March 15, 2020. The CEWS is available in addition to the previously announced 10% subsidy on payroll deductions for certain eligible businesses (NOTE: a previous version of this post incorrectly stated that the CEWS was to replace the previously announced 10% subsidy).

Notably, since the CERB is an employment insurance benefit, employees cannot receive the CERB while their employer receives the CEWS. See our blog post about the CERB for more information about that benefit.

Eligibility and Requirements

In order to be eligible, a business must demonstrate a 30% decline in gross revenues as compared to gross revenues from the same month in the previous year. Businesses will have to re-apply for the subsidy every month. It also appears that businesses will need to prove that they have already paid each employee their full wage for the given month in order to receive the subsidy. Thus, it seems that the subsidy will effectively reimburse eligible employers for a portion of their payroll expenses in any given month.

The only other requirement announced at this time is that the employer will have to attest that it is doing everything it can to pay the balance of each employee's wage not covered by the subsidy.

The subsidy will be available to all non-publicly-funded businesses, including charities and not-for-profit organizations, regardless of size and number of employees.

How to Apply

A portal will be set up with the Canada Revenue Agency in the next 3 to 6 weeks for businesses to apply for the CEWS online. It is therefore important that your business set up a CRA online portal account and arrange for direct deposits if it has not already done so if you would like to take advantage of this program and to expedite payment of the subsidy.

Start-Ups

Unfortunately, the way the CEWS is currently structured means that many new businesses may be ineligible if they cannot show revenue in any given month the previous year. When asked about this, Mr. Morneau recognized this difficulty and suggested that the government may consider allowing certain businesses to use a different eligibility test (e.g. demonstrating a 30% drop in gross revenue as compared to the month immediately before losses due to COVID-19, rather than as compared to the previous year).

More Details Expected

As this is a "proposed" plan, there will likely be more details to come. It is not clear what tool the government will use to implement this plan, however, if the CERB is any indication, there may be some legislation with respect to the CEWS in the coming days. More details will be posted to this blog when available.

Note: while this blog and the information above provides general information, it does not constitute legal advice. The best way to get guidance on your specific legal issue is to contact a lawyer. For more information about the CEWS, or if you have any other questions regarding your employment issue, please contact our office for a consultation with one of our lawyers.

Popular posts from this blog

GSPC in the News

Last week, GSPC lawyer Daniel Mauer commented on the case of a fallen tree in St. Catharines. The segment, which aired on September 11, 2020, can be found on the CHCH website .  This case brings forward some important considerations with respect to municipal liability and insurance generally.  Notice under the Municipal Act It is important to remember when suing an Ontario municipality that a potential claimant must provide the municipality with notice of a claim arising out of any alleged failure to properly maintain a municipal highway or bridge within 10 days of the damage or injury occurring. Section 44 of the Municipal Act, 2001 sets out the requirements for such notice. While a party who fails to give notice within the 10-day period may apply to the court for relief from compliance, it is advisable to provide the proper notice to avoid potential issues in any ensuing litigation.  Insurance Regardless of whether you have a negligence claim, it is always advisable to...

To Evict or Get Vacant Possession? That is the Question

The Ontario Court of Appeal's decision in Van Decker Estate v Van Decker , 2022 ONCA 712 serves as a reminder that not every type of eviction case is restricted to a hearing in the Landlord and Tenant Board ("LTB").  In that case, an estate trustee brought a motion for directions after one of the estate's beneficiaries and his spouse refused to vacate a property the deceased owned at the time of his death. The motions judge had granted the estate trustee's request for an order declaring that the property's occupants were not tenants of and had no interest in the property, that they vacate the property, and that they pay occupation rent arrears at fair market value to the estate. Although not framed in this way, the estate trustee essentially sought what is commonly referred to as an order for vacant possession of the house. At first glance, it may seem as though the LTB should have determined the issues in this case, but the Superior Court of Justice has juri...

Canada Emergency Student Benefit Update

New regulations under the Canada Emergency Student Benefit Act were recently published which apply retroactively to May 10, 2020. These regulations provide some clarity about the CESB application period, eligibility, the benefit amount, and the benefit duration. For more information about the CESB, including more information about eligibility, please see our previous blog post on this subject . The CESB application is available through the CRA My Account online portal. Students who want to apply should visit the government's information web-page to determine when to apply. Application Period The relevant application period depends on a few factors. Nothing has changed for students enrolled in a post-secondary program between December 31, 2019 and August 31, 2020: such individuals can still apply for the benefit for the period of May 10, 2020 until August 29, 2020. However, the application period for students graduating from secondary school who will commence a post-second...