Changes to the Canada Emergency Wage Subsidy (75% Subsidy)
The government has announced changes to the Canada Emergency Wage Subsidy (75% subsidy), with the enactment of legislation on April 11, 2020. See below for details. This is what we know as of April 14, 2020.
Canada Emergency Wage Subsidy (75% Subsidy)
- Employers are eligible if their revenue for March 2020 has decreased by 15% to either March 2019 or an average of revenue for January and February 2020.
- For the months of April or May 2020 the revenue must have decreased by 30% to a comparison of April or May 2019 or an average of revenue for January and February 2020.
- This change was to account for the fact that the main issues with COVID-19 occurred mid-way through March 2020.
- The business can use either the accrual or cash method of accounting to determine if they have decreased revenues by enough to qualify.
- Once a business chooses either of the accounting methods it must continue to use that method for the duration of the program.
- The subsidy is 75% of wages to a maximum benefit of $847 per week per employee or based on 75% of an annual salary of $58,725.
- Special rules are in place for employees that don’t deal at arm’s length with the business (typically the owners of the business and their families).
- The non-arm’s length employee had to be employed by the company prior to March 15, 2020 and being paid a wage prior to that time.
- For non-arm’s length employees, the subsidy is the lower of:
- $847 per week
- 75% of the employee’s average weekly employment income from the company for the period January 1 – March 15
- The amount of eligible remuneration paid to the eligible employee for the current week
- The government will also fund 100% of the employer portion of EI and CPP for employees that are eligible for the subsidy.
Please continue to monitor the government websites as more details are provided and changes are made. Contact Apex Accounting, Chartered Professional Accountants if you have any questions on these and other measures the government has put in place to try and assist businesses impacted by the COVID-19 crisis.