Canada Emergency Wage Subsidy
If you are a Canadian business who has seen a drop in revenue due to the COVID-19 pandemic, you may be eligible for the Canada Emergency Wage Subsidy (CEWS) from the government, in relation to wage expenses. This subsidy is retroactive to March 15th, 2020 and was intended to help businesses re-hire employees, prevent further job losses, and to allow you to ease back into normal operations.
Businesses that are eligible for CEWS must have the following:
Have had a payroll account on March 15, 2020
Be a certain type of employer
individual
corporation
registered charaties
persons that are exempt from Part I of the Income Tax Act
non-profits
agricultural
chambers of commerce, etc.
partnerships
and a few others
public institutions are not eligible for the subsidy
Have experienced a drop in revenue
Eligible revenue is defined as selling goods, rendering services, and others’ use of your resources.
The drop in revenue has two different calculation periods.
For claim period 1, which is March 15, 2020 to April 11, 2020 you must have experienced a revenue drop of at least 15% to be eligible for this claim period. For claim periods 2 to 4, which is April 12, 2020 to July 4, 2020 you must have experienced a revenue drop of at least 30% to be eligible for these claim periods. For the first four period claims, there are differing baselines that can be used to determine revenue drop. This can either be a certain month or an average of certain months.
For claim periods of 5 onwards, which is July 5, 2020 to March 13, 2021, there is no minimum revenue drop required to be eligible. Instead, the rate that your revenue has dropped is used to determine how much subsidy you will qualify for. The CRA has provided an online calculator and spreadsheet to help with this type of calculation.
More information on eligibility and access to the CRA’s online calculator can be found here: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html