Saturday, April 11th of 2020 was the day the government of Canada passed legislation creating the expanded Canada Emergency Work Subsidy (CEWS) in response of the COVID-19 outbreak. On July 13th the Government of Canada extended the length of the program to November 21st with the possibility of it extending into December 2020.
CEWS was created with the intension to prevent layoffs, encourage re-hiring of laid off employees, retrain, and even hire new workers. Its intention is to provide a direct payment to employers who apply and qualify for it. Essentially, the subsidy was created to help businesses of all sizes who have been faced with a significant drop in revenue.
As of September 2020, CEWS is currently in its 7th claim period (August 30th to September 26th), meaning the subsidy remuneration is capped at 75% for up to $847 maximum per week per eligible employee. However, the subsidy is determined on a sliding scale; the best way to determine how much can be paid would be to use the CEWS calculator on the CRA website.
For period 8 - September 27th to October 24th - the subsidy is determined to be capped at 65% or $734 maximum per week per eligible employee. By period 9 (October 25th to November 21st), the subsidy will be capped at $45% for $508 maximum per week per eligible employee.
Determining eligible employee pay is based on the type of employee pay you would make payroll deductions on, including salary, wages, certain tax benefits, commissions, and fees. This does not include severance pay, stock option benefits, dividends, tips that costumers would give to an employee, and non-cash taxable benefits (a good example is the use of a corporate vehicle). Whether an employee is related to the owner or an employee is a landed immigrant, all factors matter when is comes to claiming CEWS. In cases of fraudulent claims, penalties will include fines and even imprisonment. Using the CRA calculator or speaking with a CRA representative will ensure you will get the best out of your claim.
The future of work is uncertain, as COVID-19 has revealed to us what we have taken for granted, staggering the entire world with its impact. With this unpredictability, what matters most is that we take one day at a time and take care of each other. Remember, there are options to help, whether its CEWS or CERB, you and your business does not have to suffer.