The Government of Canada has created a 75% wage subsidy for eligible employers for up to 12 weeks called the Canada Emergency Wage Subsidy ("CEWS"). The CEWS is retroactive to March 15, 2020. Eligible employers include individuals, taxable corporations and partnerships of eligible employers, non-profit organizations and registered charities. The purpose of the CEWS is prevent further job losses, encourage the rehiring of previously laid off workers and assist businesses with resuming normal operations. The CEWS will be treated as government assistance and will be included in an employer's taxable income.
The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020 is the greater of:
- 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
- the amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of the employee's pre-crisis weekly remuneration, whichever is less.
Employers may apply for the CEWS through the Canada Revenue Agency's My Business Account portal.
The Government of Canada is considering measures to avoid duplication between the Canada Emergency Response Benefit ("CERB") and the CEWS. Duplication could occur where a laid off employee is receiving the CERB and that same employee is rehired by an employer receiving the CEWS. Accordingly, it would be prudent for employers to confirm that newly rehired employees have terminated their CERB claim.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.