Canada Emergency Wage Subsidy

The Canada Emergency Wage Subsidy: How the Canadian Government is Helping Business During the COVID-19 Pandemic

The COVID-19 pandemic has tested the people of Canada in a variety of ways. Millions of people worldwide have gotten sick with this illness, including many Canadians. Another unfortunate victim of this virus is the Canadian economy. Many people and businesses have felt the wrath of this the Coronavirus. While the government of Canada attempts to curb the spread of the Coronavirus, many people and businesses are trying to find ways to make ends meet until some normalcy is restored. One of the ways that the Canadian government is attempting to assist the business sector get through this difficult time is with the Canada Emergency Wage Subsidy (CEWS).
How Long Has the Canada Emergency Wage Subsidy Been in Place and Why is it Necessary?

Simply put, the Coronavirus outbreak has sent many Canadian businesses reeling. While Canadian citizens practice social distancing in an attempt to curb the spread of the Coronavirus, many establishments are seeing a steep drop in revenue. To prevent these businesses from going out of business, to assist employees who work for these companies, and to put them in a better position once the outbreak ends, the government of Canada has put forth the Canada Emergency Wage Subsidy (CEWS).

The CEWS pays up to 75% of an employee’s pay for a period of up to 24 weeks.

This program was announced by Prime Minister Justin Trudeau on March 27th, 2020, and applications were being accepted for periods retroactive to March 15th.

Which Employers Are Eligible for the Canada Emergency Wage Subsidy?

One of the main questions that is often asked about the CEWS is about which employers are eligible to take advantage of this benefit. Luckily, the list is extensive. Some of the institutions eligible to take advantage of the CEWS include:

  • Individuals who are themselves employers (this includes trusts)
  • Taxable corporations
  • People, other than public institutions, that aren’t exempt from corporate tax, like chambers of commerce, non-profits, agricultural companies, boards of trade, scientific research and development non-profit organizations, labor societies, and fraternal benefit orders.
  • Charities that are registered with the Canadian government
  • Government-owned indigenous corporations
  • Registered amateur Canadian athletic associations
  • Journalistic organizations that are registered with the Canadian government
  • Private schools and colleges
  • Some examples of public institutions that are not covered by the CEWS include public schools and universities, local governments, and hospitals.

Which Employees Are Eligible for the Canada Emergency Wage Subsidy?

The main goal of the CEWS is to lessen the impact of the COVID-19 pandemic on businesses, so they can stay afloat. It is also to encourage these companies to keep as many workers employed as possible.

The CEWS is an incentive for businesses to rehire workers who previously lost their employment with them.

Eligible employees are those who were employed in Canada during the claim period, except if the person was not paid eligible remuneration for a period of 14 or more consecutive days.
Employees who previously lost their job, or were furloughed, can also be eligible provided that the employer rehires them at the same pay and status. Their rehire and pay dates must also be during an eligible period.

How Do You Calculate the Canada Emergency Wage Subsidy?

Many employers may be wondering exactly how they will be able to calculate what kind of subsidy they will be receiving. After all, this kind of information is key in the trying times that the coronavirus outbreak has brought upon them. To determine the amount of subsidy an employer is going to receive, they must first determine what kind of eligible remuneration an employee is getting from their employment. Eligible remuneration (https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-frequently-asked-questions.html#h_5) is defined as the amount that is paid to an employee as salary, wages, taxable benefits, and commissions. In essence, if an employer is required to make payroll deductions to the Canada Revenue Agency (CRA) for the amount, it is more than likely an eligible remuneration. The eligible remuneration will help you figure out the baseline remuneration.

The baseline remuneration is the average weekly eligible remuneration for an employee from January 1st, 2020 to March 15th, 2020. Once you have figured out the baseline remuneration for your employees, there is a wage subsidy calculator on the website (https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-calculate-subsidy-amount.html) that you can use to get an estimate of your benefit. In essence, the math behind the calculation is determined by the total number of eligible employees you have and the amount and type of wages they received both before and during this outbreak.

How Do I Apply for the Canada Emergency Wage Subsidy?

Applying for the CEWS benefit is meant to be a streamlined process. All your information will be verified by the Canada Revenue Agency, so make sure it is accurate before it is submitted to avoid any issue with processing.You can even register your payroll accounts for direct deposit to make the process even easier.

There are three main ways to apply. The first is to log into your My Business account. If that is not an option for you, employers may also use the “Represent a Client” option. Only certain representatives will be allowed to use this choice. The last option is to use the Web Forms Application with your web access code. Those who don’t have their code will need to provide their registration date or their total income tax from their 2018 tax summary.

How Long Will the Canada Emergency Wage Subsidy be Available?

Currently, the plan is for the CEWS to be in place until August 29th, 2020. Since the Coronavirus pandemic is rapidly evolving, that date could change. It is a good idea for employers to try and stay up to date with any changes that occur to this program.

Get the Relief You Need with the Canada Emergency Wage Subsidy

The CEWS benefit is set in place to assist businesses, and their employees, tread water while the Coronavirus pandemic is being dealt with. The CEWS is also expected to prevent many Canadians from losing their job. It is also the hope of the Canadian government that the CEWS will help companies emerge from this outbreak in a strong position when it ends. Apply for the CEWS today and get the assistance you need to keep your business strong during this tough time.

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