What is the Canada Emergency Wage Subsidy?
The newly created Canada Emergency Wage Subsidy (CEWS), will provide financial support to businesses that have seen a 30% loss in revenue, as compared to the same time last year, and aims to assist those businesses in retaining their employees, or even re-hiring those they’ve laid off.
This program is separate from the Temporary Wage Subsidy previously created. The benefits, eligibility, and processes differ. For more information on if you are affected by the Temporary Wage Subsidy, click HERE.
This subsidy amount will be, up to, 75% of the remuneration (salary and wages) paid between the period of March 15 and June 6, to a maximum of $847 per week.
What Businesses will be eligible?
CEWS will benefit many Canadian businesses who:
- Demonstrate that they have sustained a decrease in revenue of at least 30%, as compared to the same period in 2019
- Are eligible employers including self-employed individuals, taxable corporations, partnerships, non-profits, and registered charities; public bodies are not eligible
How to apply for the CEWS?
Eligible businesses interested in applying for the CEWS will apply through their CRA My Business Account. More details on the administration and processes will be made available shortly. We will advise as soon as possible once the federal government releases more information.
Provided below is a table from the CRA note on CEWS regarding claiming periods.
How does this impact other benefits, such as TWS or CERB?
For those businesses that may qualify for both the Temporary Wage Subsidy (TWS) and the CEWS, the subsidy received from the TWS will reduce that amount that can be claimed under the CEWS, for the same period.
If an employee is eligible for the Canada Emergency Response Benefit (CERB), then the employer would not be eligible for the CEWS for that same employee for the 4-week period in question.
NOTE: Like other government assistance, a subsidy received under this benefit is considered taxable income for the employer.
For more details on income support and other benefits as part of the Federal Government’s Economic Response Plan for COVID-19, click here.
See also our COVID-19: Tax Info Centre, from our TurboTax Support team, answering many FAQs on this topic and more.
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Susan has been an accounting professional for over 20 years, and has been working with businesses and individuals and their taxes for the past 12. Education is a passion for Susan, and when not writing or talking about tax for TurboTax Canada, she can be found speaking at events, teaching at Mohawk College, and working with many businesses and entrepreneurs through her own accounting advisory practice. Susan is known to be approachable but pulls no punches when it comes to the reality of business finance and taxes.