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COVID-19 Wage Subsidy Update

Apr 1 2020

Today Finance Minister Bill Morneau provided some additional details related to the Canada Emergency Wage Subsidy program previously announced by the Government of Canada. These details include:

  • The wage subsidy will be available to all non-publicly funded companies, charities, and not for profits – however only employers who suffer a drop in gross revenues of at least 30% in March, April or May, when compared to the same month in 2019, would be able to access the subsidy. Employers must reapply each month to confirm they meet the criteria for that month.
  • The wage subsidy applies at a rate of 75% of the first $58,700 normally earned by employees – representing a benefit of up to $847 per week.
  • Eligible remuneration may include salary, wages, and other remuneration. However, it does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.
  • The program will be in place for a 12-week period, from March 15 to June 6, 2020.
  • For non-profit organizations and registered charities affected by a loss of revenue, the government has indicated that they will work with the sector to ensure the definition of revenue is appropriate to their circumstances.
  • Employers are expected to at least make best efforts to top up salaries to 100% of the maximum wages covered.
  • The application will be made online on a CRA portal that will be launched soon. It is expected that funds will be made available in approximately 6 weeks.
  • The government has indicated that there will be severe penalties for those that take advantage of the system.
  • Those organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 10 per cent of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer provided they meet the previously announced criteria.

Additional details can also be found on the Government of Canada website.

As always, please contact your trusted advisory at Mowbrey Gil if you need any assistance or have further questions on the wage subsidy program.

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