In its Speech from the Throne on September 23, 2020, the Government of Canada announced that it will be extending the Canada Emergency Wage Subsidy (CEWS) program until the summer 2021.
The CEWS was introduced in April, 2020 as a measure to help employers keep employees on the payroll during the COVID-19 crisis, and to encourage the re-hiring of laid off workers. It was also intended to reduce reliance on the Employment Insurance program, which was not designed to deal with huge volumes of applications in a short period of time.
Initially, the CEWS was put in place to provide eligible employers with a 75 percent wage subsidy for a 12-week period ending June 6, 2020. In May, the program was extended by an additional 12 weeks to August 29, 2020. In July, the program was again extended to November 21, 2020, and significantly modified in the following ways:
- Starting in Period 5 (July 5 to August 1), all employers that experienced any decline in revenue became eligible for the CEWS. Previously, only employers that experienced at least a 30% drop in revenue were eligible.
- Starting in Period 5, the amount of subsidy available to eligible employers began to gradually declined. Previously, the subsidy was slated to have an immediate and complete end on August 29, 2020.
- A “safe harbour” provision allowed employers that experienced at least a 30% revenue decline in Periods 5 and 6 (Aug 2 to August 29) to receive least a 75% CEWS rate.
- Starting in Period 7 (August 30 to September 26), the CEWS rate for temporarily laid off (i.e. furloughed) employees was adjusted to align with benefits provided under the Canada Emergency Response Benefit, and/or Employment Insurance.
- The CEWS was divided into two rate categories: a base CEWS rate (for most employers), and a top-up CEWS rate (for employers with large declines in revenue).
Details on any possible new changes to the CEWS were not mentioned in the throne speech, and at the time of this writing have not been subsequently announced. Any such changes would require legislative approval.
A newly-released survey by KPMG has found that 76 percent of Canadian business leaders believe that the CEWS is a good investment for getting people back to work, and helping the overall economy rebound after an unprecedented plunge during the spring and summer. Overall, 44 percent of business leaders have a positive view of the re-designed CEWS, 24 percent rate the program as average, and 17 percent rate the program as below average or poor. Fifteen percent are undecided or have no opinion on the program.
At PIVOTAL, web have extensive experience working with organizations to help them understand their eligibility, entitlements, obligations, and revenue projections under the CEWS program. To learn more contact us today at (855) 407-3921 or send us a message.