In what will undoubtedly be good news for many employers across the country, Prime Minister Trudeau announced on Friday that Canada’s Emergency Wage Subsidy program (the “CEWS”) will be extended until August 29, 2020. Prime Minister Trudeau also announced that the federal government is considering adjusting the current 30% revenue loss eligibility threshold for the CEWS so that businesses will be able to continue receiving the subsidy as they begin to re-open and grow. He explained that the federal government will be consulting with relevant stakeholders over the course of the next month or so to see whether such an adjustment to the eligibility threshold, or to other aspects of the program, might be needed.
The CEWS was initially put in place for a three-month period ending in June. It provides eligible employers with a subsidy of 75% of an employee’s first $58,700 of wages, up to a maximum of $847 per week per employee. For more information on the CEWS program, please refer to our previous blog post on the subject, which can be accessed here.
When the CEWS program was first announced, news outlets reported that Canada Revenue Agency expected to receive around 1 million applications for the program. However, the CRA has only received around 132,000 applications for the CEWS to date. By contrast, the CRA has received double the projected 4 million applications it expected to receive for Canada’s Emergency Response Benefit (the “CERB”). It remains unclear whether the federal government will extend the CERB beyond its initial 16-week period. When asked about a possible extension of the CERB program during today’s daily briefing, Prime Minister Trudeau would not commit to such an extension for the CERB. However, it was clear from his comments during today’s briefing that the hope is that, by extending the CEWS program to the end of August, more employers will apply for the CEWS program and re-hire their workers, which will effectively transition more workers from the CERB to the CEWS.
In follow up to Prime Minister Trudeau’s announcement, Finance Minister Bill Morneau provided some further details on some of the adjustments that have recently been made to the CEWS program. For example, Minister Morneau announced that the types of employers who are eligible for the subsidy has now been expanded to include more organizations, including: registered journalism organizations, registered athletic organizations, tax exempt indigenous corporations, non-public colleges and schools, and certain partnerships. Minister Morneau also reiterated Prime Minister Trudeau’s assurances that more adjustments would likely be made to the CEWS program following consultations with stakeholders.
We continue to monitor developments on this program and will provide further updates as more information becomes available.
Disclaimer: As always, this post does not constitute legal advice and we would encourage you to seek professional legal advice from one of our knowledgeable lawyers before making any decisions with respect to your own case.