On April 2, 2020, we summarized the Federal Government’s initial announcements regarding the Canada Emergency Wage Subsidy (CEWS), which will provide a 75% wage subsidy to eligible employers for the period between March 15, 2020 to June 6, 2020. That summary can be found here.
On April 8, 2020, the Government revised the eligibility criteria in order to make the benefit more widely available, and in particular:
- In order to be eligible for the CEWS for the period between March 15 and April 11, an employer must now demonstrate a 15% reduction of revenue rather than a 30% reduction; and
- The Government has introduced an alternative benchmark for businesses to compare their revenue. Instead of using the March, April or May 2019 as the basis of comparison, employers may alternatively use the average revenue from January and February 2020 as the comparator. Employers select whether they will be using the general year-over-year approach or the January/February approach when first applying for the CEWS and are required to use the same approach for each of the three months.
The reference period and the required revenue reduction for each of the claiming periods is now as follows:
In calculating their revenues, employers must include revenue earned from arm’s-length sources and must use its normal accounting method (i.e. either the accrual method or the cash method, but not a combination of both). Employers will be required to select an accounting method when first applying for the CEWS and must continue to use that method for the entire duration of the program.
We anticipate that the legislation for the CEWS will be introduced soon and we will provide another update once that has occurred.
We know that the number of potential employer and employee government benefit plans makes it difficult to remember the details of each of the plans. As a result, we have created a summary document outlining each plan and its eligibility criteria. View our COVID-19 Benefits Options Summary.
For more information on this article or the benefits overview document, please contact Ilan Burkes, Sari Wiens, Nicole Toye or Jessica Fairbairn.
Note to our Readers: Information regarding COVID-19 is rapidly evolving. We are working to bring you up-to-date articles as the legal issues develop and to keep our previous posts updated. Given that the legal issues related to COVID-19 are constantly changing, if you are looking for legal advice or are dealing with an issue in relation to COVID-19, please contact your Harris lawyer or a member of our COVID-19 response team: Sari Wiens, Ilan Burkes, Nicole Toye or Jessica Fairbairn.
To read our most recent articles and other updates on COVID-19, visit our COVID-19 Updates page.
