Canada Emergency Wage Subsidy: For Employers
On April 1st, Canada’s Minister of Finance held a press conference to provide additional information regarding the new Canada Emergency Wage Subsidy which will provide a 75% wage subsidy to eligible businesses in Canada.
Read the full release here provided by the Department of Finance for additional details and information.
- The subsidy will be available to companies whose gross revenues have decreased by 30% in comparison to the same month last year to be determined monthly for each of March, April and May (e.g. 30% decrease in gross revenues in March 2020 relative to those seen in March 2019)
- The subsidy will apply to the first $58,700 of each employee’s salary and up to $847 per week per employee
- Businesses will be required to reapply each month to qualify. It is anticipated that business will be required to submit information relating to the application including, but not limited to, the pre-crisis wage of the employee, the wage being paid during the application period and certification that the revenues of the business have decreased by at least 30%
- Businesses will be able to submit applications through CRA My Business Account
- It is expected to be six weeks before these subsidies will be paid to business owners – any businesses that are not registered for direct deposit and will be applying for this subsidy are encouraged to register for direct deposit as soon as possible
- Businesses must attest that they are doing everything in their power to pay employees the remaining 25% of their wages. Although there will be cases where this is not possible, it is expected that businesses will make all efforts to do so.
- Morneau has warned that there will be severe consequences for anyone who tries to take advantage of the system so it is expected that at a later date, additional information will be required to be submitted to CRA
- At this point it has been announced that this subsidy will be available for March, April and May 2020 wages
- For new corporations that are unable to provide a comparative of gross revenues for the same month in 2019, the details regarding qualification are still under development and are expected to become available in the coming days
- The previously announced 10% wages subsidy which allowed business to reduce payroll remittances is still available and will reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period
Canada Emergency Response Benefit: For Employees
On April 1, 2020, Employment and Social Development Canada released further details regarding the Canada Emergency Response Benefit (CERB) in response to the COVID-19 pandemic.
This Government release provides important information regarding the application process for this $2,000/month temporary income support and confirms the eligibility requirements for CERB.
- The application will be available starting April 6, 2020 by going to Canada.ca/coronavirus and selecting CERB. Individuals will be asked a few questions in order to direct them to either Service Canada or the Canada Revenue Agency website for the balance of the application. A toll-free number (1-800-959-2019) will also be active as of April 6.
- The application website is asking individuals to apply on a specific day based on their birth month in order to not overwhelm their system. The release site linked above and below lists your earliest application date.
- If you have stopped working because of COVID-19 and applied for EI regular or sickness benefits on March 15, 2020 or later, your claim will automatically be processed through CERB.
- Individuals still unable to work due to COVID-19 after CERB benefits end and who are eligible for EI regular and sickness benefits can still access those EI benefits at that time
The government release includes a comprehensive Q&A section.
Ford Keast LLP will continue to monitor government releases and will share information that impacts your personal and business income tax matters. We encourage clients to continue submitting documents to us ELECTRONICALLY, where possible. Our staff remain working on files and we will process your documents as timely as possible.
Please contact your Ford Keast representative to discuss this article or address any other concerns you may have at this time.