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For example, if revenues in March 2020 were down 50% compared to those in March 2019, the employer would be allowed to claim the CEWS (as calculated below) on remuneration paid between March 15 and April 11, 2020. When applying for the subsidy, employers will be required to attest to the decline in revenue.
Calculating Revenues
An employer’s revenue for this purpose will be its revenue from its business carried on in Canada earned from arm’s-length sources, calculated using the employer’s normal accounting method, excluding revenues from extraordinary items and amounts on account of capital. For non-profits and charities, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their specific circumstances.
For non-profits and charities, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their specific circumstances.
Amount of Subsidy
The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020, will be 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.
Further guidance with respect to how to define pre-crisis weekly remuneration for a given employee will be provided in the coming days.
As described above, employers may be eligible for a subsidy of up to 100% of the first 75% of pre-crisis wages or salaries of existing employees, and such employers will be expected where possible to maintain their existing employees’ pre-crisis employment earnings. The CEWS will also be available for salaries and wages paid to new employees.
Eligible remuneration may include salary, wages, and other remuneration. These are amounts for which employers would generally be required to withhold or deduct amounts to remit to the Receiver General as payroll taxes. However, it does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.
Furthermore, a special rule will apply to employees who do not deal at arm’s length with the employer, such as owner-managers. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75% of the employee’s pre-crisis weekly remuneration.
There will be no overall limit on the subsidy amount that an eligible employer may claim. Employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.
Application Process
Eligible businesses will be able to apply for the CEWS online through a Canada Revenue Agency online portal. The application system is expected to be live in approximately six weeks. More details regarding how to apply for the program will follow as soon as they become available.
Businesses’ Responsibilities
In order to maintain the integrity of the CEWS program and to ensure that it helps Canadians keep their jobs, employers will be required to repay amounts received under the CEWS if they do not meet the eligibility requirements and pay their employees accordingly. Penalties may apply in cases of fraudulent claims and anti‑abuse rules will be proposed to ensure that the subsidy is not inappropriately obtained, and to ensure that employees are paid the amounts they are owed.
Those organizations that do not qualify for the CEWS may continue to qualify for the previously announced wage subsidy of 10% of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Employers who are not eligible for the CEWS would still be able to furlough employees who may receive up to $2,000 a month under the CERB.
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