Canada Emergency Wage Subsidy
On Friday, March 27, 2020, Prime Minister Justin Trudeau announced the Canada Emergency Wage Subsidy. Initially, he indicated that the subsidy would be for 75% of wages retroactive to March 15th and that it would be available to businesses of any size as well as to non-profit organizations and charities.
On Monday, March 30, 2020, Prime Minister Trudeau provided further details indicating that:
- Organizations whose revenues decreased by at least 30% as a result of COVID-19 would qualify;
- The number of employees would not matter;
- The subsidy would cover 75% of the first $58,700 of wages or a maximum of $847 per week;
- The government was trusting business not to “game” the system and that there would be penalties for any abuse; and
- Further details would be coming soon.
Today, Finance Minister, Bill Morneau announced further details indicating that:
- In order to qualify for the subsidy organizations would need to show a decrease in revenues of 30% or more for the month in comparison with the same month in the prior year. There may be further developments in this area as the government is considering what would happen in respect to new companies or other situations in which the organization cannot provide information for the prior year;
- Organizations would need to reapply for each month (March, April and May);
- The subsidy will cover the first $58,700 of normal wages to a maximum of $847 per week per employee. The business will be required to show payment of such amounts in order to receive subsidy;
- The subsidy will be available to large and small companies, non-profit organizations and charities which are not publicly funded and he specified that the hospitality industry will be included;
- Employers will be required to attest that they are doing all they can to pay the remaining 25% of employees wages;
- Organizations should get ready to rehire employees;
- Organizations will be able to apply online through a CRA portal which will launch soon (3 to 6 weeks);
- It will take approximately 6 weeks for funds to become available;
- This is a high trust system and there will be severe consequences for abuse of the system;
- The administrative details will be made available as rapidly as possible; and
- The cost of this subsidy is estimated to be $71 billion and it is expected to reduce the cost associated with other benefit programs previously announced.
Eligible small employers which do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 10% of wages paid from March 18th to before June 20th, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Qualifying businesses may reduce their remittances of income tax withheld from employees’ remuneration.
To learn more or if you have any questions regarding the above information, please contact your Facet Advisors professional, or call us at 604-534-3004.