The purpose of this communication is to provide you with the most recent update in relation to the 75% Canada Emergency Wage Subsidy (CEWS). This subsidy provides employers who have experienced a significant loss of revenue or cash flow to claim a wage subsidy of up to 75% of eligible wages. You can read our previous bulletin about this subject HERE.
More than a month ago the government announced that the CEWS was being extended from its original June 6th end date to August 29th. They also indicated that the previous requirement that there be a 30% decrease in revenue may be relaxed. As the original program ended two weeks ago, we have been waiting to hear what the criteria for the program after June 6th would be.
On June 16th the Canada Revenue Agency added the following note to their website:
“The Government announced on May 15, 2020 that the CEWS would be extended by an additional 12 weeks, to August 29, 2020. The eligibility criteria will apply for the current period (period 4; June 7 to July 4). Any potential changes would commence as of periods 5 (July 5 to August 1) and/or 6 (August 2 to August 29).
More information about the announced CEWS extension to August 29 will be coming soon.”
At a high level, this presumably means that a 30% drop in revenue is still needed and all the per-employee rules and calculations are the same as the first three periods. Any changes to those criteria will only impact the periods that have not commenced yet.
There are some technical issues that need to be clarified in the actual legislation for the fourth period, for example the legislation only allows employers to compare to January & February average revenue for the original three periods and not for any subsequent periods.
We will continue to provide updates as they come available. If you have any questions about these matters, please contact us.
To review any of our previous updates on COVID-19 please see our website.
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