Area of Law: Coronavirus COVID-19
Answer # 7250
Canada Emergency Wage Subsidy (CEWS)Region: Ontario Answer # 7250
The Canada Emergency Wage Subsidy (CEWS) is a Federal Government program available to businesses experiencing financial hardship during the pandemic. Specifically, employers who have seen a drop in revenue due to the COVID-19 pandemic may be eligible for a subsidy to cover part of employee wages, retroactive to March 15. 2020. It is meant to enable employers to re-hire workers and help prevent further job losses.
Amount of subsidy
The subsidy amount for each eligible employee (on eligible wages paid) depends on the claim period (see below).
The benefit is available to both large and small businesses. Eligible employers include:
- individuals / sole proprietors,
- taxable corporations,
- partnerships consisting of eligible employers,
- non‑profit organizations, and
- registered charities.
Public bodies, such as governments and publicly funded organizations, such as public universities, colleges, schools and hospitals are not eligible for this subsidy.
As per the Government of Canada,
“An eligible employee is an individual employed in Canada by you (the eligible employer) during the claim period, except if there was a period of 14 or more consecutive days in that period in respect of which they were not paid eligible remuneration by you.”
- Claim period 1: March 15, 2020 – April 11, 2020
- Claim period 2: April 12, 2020 – May 9, 2020
- Claim period 3: May 10, 2020 – June 6, 2020
- Claim period 4: June 7, 2020 – July 4, 2020
- Claim period 5: July 5, 2020 – August 1, 2020
- Claim period 6: August 2, 2020 – August 29, 2020
- Claim period 7: August 30, 2020 – September 26, 2020
- Claim period 8: September 27, 2020 – October 24, 2020
- Claim period 9: October 25, 2020 – November 21, 2020
- Claim period 10: November 22, 2020 – December 19, 2020
How to apply
Employers can apply for the CEWS through Canada Revenue Agency’s in three ways:
1. Most businesses may apply online using the My Business Account portal.
2. Business representatives may apply online using the Represent a Client option.
3. Through a web-based application.
Employers have to keep records showing the reduction in revenues and wages paid to employees.
Changes to CEWS as of November 2020
As of November 19, 2020 (Bill C-9):
- the subsidy is extended to June 2021
- the maximum subsidy rate for periods 8 to 10 will remain at 65% (40% base rate + 25% top-up)
- beginning in period 8, the top-up rate and base rate are is now calculated using the same one-month revenue drop
- for periods 8 to 10, use the new top-up calculation or the previous 3-month average drop, whichever works in your favour
- the deadline to apply is January 31, 2021, or 180 days after the end of the claim period, whichever comes later
- starting in period 9, the calculation for employees on leave with pay now aligns better with EI benefits
- you can now calculate pre-crisis pay (baseline remuneration) for employees who were on certain kinds of leave, retroactive to period 5
- the Canada Emergency Rent Subsidy (CERS) has been introduced for businesses, non-profits, and charities
- the maximum subsidy rate beginning Sunday, December 20, 2020, until March 13, 2021 will be raised to 75%
Employers will be required to repay amounts paid under the Canada Emergency Wage Subsidy if they do not meet the eligibility requirements.
Penalties, which may include both fines and imprisonment, may apply in cases of fraudulent claims.
For detailed information and up-to-date changes regarding CEWS, visit canada.ca. For information on other available supports for businesses and individuals, visit the Government of Canada Economic Response Plan website.
Provincial relief programs for businesses: There may also be financial relief programs and incentives for businesses available from provincial governments. For more info, visit our related links and resources for what is available where you live.
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