On May 14, 2020, CEO Tim Hudak wrote a letter to the Honourable Bill Morneau, Canada’s Finance Minister, asking him to consider extending the Canada Emergency Wage Subsidy Program (CEWS) into September to allow Member brokers to qualify for financial assistance.
OREA’s message was certainly heard as on July 17, 2020, the Government of Canada released new details on the Canada Emergency Wage Subsidy (CEWS), the financial aid program aimed at helping businesses who have seen a revenue reduction due to COVID-19.
The aim of the proposed changes is to broaden the reach of the program and provide better targeted support to those businesses that have been affected by the COVID-19 pandemic. By broadening the application criteria, more workers will be able to return to their jobs and get back on the payroll, regardless of the percentage of revenue loss experienced by their employer.
The program specifically offers a 75 per cent wage subsidy to eligible employers to prevent further job loss and encourage employers to re-hire workers who were previously laid off as a result of the pandemic. The wage subsidy is available retroactive from March 15, 2020 to December 19, 2020.
So how does my business qualify?
Previously, brokerages were eligible for the wage subsidy program if they had seen at least a 30 per cent reduction in revenue in April and May due to COVID-19. The recent update for the current period now consists of two parts:
- A base subsidy is available to all eligible employers experiencing a decline in revenues, with the subsidy amount varying depending on the overall percentage of revenue decline; and,
- A top-up subsidy will now be available to an additional 25 per cent of businesses that have shown more than a 50 per cent revenue decline due to COVID-19.
How do I apply for the CEWS?
An application portal will be launched by the Canada Revenue Agency (CRA) and businesses can apply through their CRA My Business Account, or through an online application form that is live on the government’s website.
How much money will my business receive?
Previously, the subsidy covered 75 per cent of an employee’s normal wages, up to $847 per week.
The new CEWS rules will now calculate the subsidy provided to businesses proportional to revenue declines. The maximum pay used to calculate the per-employee subsidy will be $1 129 per week.
The government has stated that employers who have already made business decisions for July and August will not receive a subsidy rate lower than they would have had under the previous rules.
The wage subsidy will gradually decrease with each new period until December 19, 2019. More information on how the wage subsidy will be calculated can be found on the government’s website.
Can my employees receive the wage subsidy and the CERB at the same time?
No. The CERB requires you to have lost income as a result of COVID-19 or be earning less than $1000 a month in order to receive the payment. If an employee is rehired using the wage subsidy and is making more than $1000 a month, they will no longer qualify for the CERB.