Member Update: April 2, 12:00PM

Federal Government Announces Emergency Wage Subsidy Information

Finance Minister Bill Morneau recently announced additional information about the Canada emergency wage subsidy (CEWS), a program designed to discourage companies from laying off workers. The program is retroactive to March 15.

The CEWS is also designed to encourage employers who already have laid off workers to put them back on the payroll, with direct payments from Ottawa to cover a significant portion of most wages for the next three months.

The federal government will offer a 75 per cent wage subsidy to all businesses losing 30 per cent of their revenue as a result of COVID-19 pandemic.

To qualify, companies must show their revenue in March 2020 was 30 per cent less than it was in March 2019.

The program will be in effect for three months and companies must reapply each month — demonstrating revenues in April 2020 are also 30 per cent less than they were in the same month the year prior.

The 75 per cent wage subsidy will cover annual earnings up to $58,700 — or $1,129 a week in pre-crisis earnings. Maximum subsidies for each employee would be $847 a week.

Which businesses qualify?
The benefit is not limited to small and medium-sized enterprises; it is offered to all companies that have seen that 30 per cent drop in gross revenue.

It also doesn't matter how many people are on staff. Sole proprietorships and partnerships are also eligible.

The subsidy is available to all types of corporations in Canada, with the exception of non-taxable corporations and public sector entities like municipalities, public schools and hospitals. Bars and restaurants can qualify.

How do employers apply?
The wage subsidy will be administered by the Canada Revenue Agency (CRA) through the My Business Account portal on the agency's website.

Money will flow to businesses within the next three to six weeks, depending on how quickly the government can make the necessary technical and bureaucratic adjustments to get the money out the door.

Do not-for-profits and charities qualify?
Yes. Non-profits and charities are eligible for the same subsidy.

Morneau told reporters he recognizes non-profits may find it harder than businesses to demonstrate revenues have declined by 30 per cent year-over-year.

Ottawa will work with the sector in the days ahead to find consistent criteria with the ones businesses have to follow. Charities may be asked to show that donations, for example, have dipped.

Beyond wage subsidies, the government is also considering additional support for non-profits and charities, particularly those involved in the front line response to COVID-19.

The government announced a 10 per cent wage subsidy earlier this month for small businesses. What happened to it?
It is still in effect. Small businesses can continue to claim the 10 per cent benefit.

However, if they also qualify for the larger 75 per cent subsidy — the CEWS — then the money Ottawa sends will be adjusted downward to account for any payments made through that separate program.

Unlike the CEWS, small businesses can claim the 10 per cent subsidy even if they haven't seen a drop in revenue in recent weeks.

The maximum subsidy for that previously announced program is $1,375 per employee and $25,000 per employer.

Can I receive the Canada emergency relief benefit (CERB) and still collect a subsidized paycheque from my employer?
No. The CERB is available only to workers, including the self-employed, who are collecting no income ($0) as a result of COVID-19.

If you are still being paid by an employer, or picking up the occasional shift, you are not eligible for the relief benefit. Workers who quit or voluntarily leave their jobs are also ineligible for the CERB.

The CERB will temporarily replace standard employment insurance (EI) benefits. It is $2,000 a month and will be paid for four months as long as a worker isn't collecting any income.

Other EI benefits, like maternity and parental leave, will be unchanged.

What can I do now?
Members can ensure they’re prepared to apply by reviewing the Federal Government’s information page.

You can also e-mail ONPHA today at member.support@onpha.org.