Today, Finance Minister Bill Morneau provided details about the Canadian Emergency Wage Subsidy relief plan for businesses. The information provided was, essentially, an outline of the plan with more details to be provided in the near future.
Basis for Wage Subsidy
Commencing March 15, 2020, a 75% subsidy will be paid to employers based on wages paid to employees. The first $58,700 of remuneration paid per employee is covered to a maximum of $847 per week. For March 2020, the subsidy will be backdated.
The subsidy will be available for March, April and May 2020 and could be extended if economic conditions do not improve.
Qualification and Eligibility
All private businesses, non-profit organizations, and charities will qualify regardless of size. Entities are eligible for the subsidy if their gross revenues for March 2020 declined at least 30% when compared to March 2019. The same holds for each of April and May 2020 as compared to April and May 2019.
There is no cap on the number of employees or size of payroll.
The Federal Government will require an entity to attest that it is doing everything possible to pay employees the remaining 25% of qualifying salaries not being subsidized, though there is no legal requirement to do so.
They have emphasized that there will be severe penalties should an entity be subsequently found ineligible for the subsidy when they had applied with false or misleading information or misused the funds under the program.
Entities need to apply through the CRA My Business Account. If you do not already have access to the My Business Account and you are considering applying for the subsidy, we suggest you sign up in advance of next week. The application must be made on a monthly basis with specific forms completed on account of payroll information and business revenues for the month in which the subsidy is requested.
The subsidy will be like a rebate and paid within 6 weeks of submission of information.
A-R Partners Insight
This subsidy appears to be an extension of the 10% wage subsidy previously announced by the federal government so now there are 2 programs in place. In the press conference, Mr. Morneau stated that if an entity does not qualify for the 75% subsidy, it can apply for the 10% subsidy as there are no qualifications for the lower based program. However, this is likely subject to change. Anything received under the 10% program will reduce the amounts to be received under the 75% program.
All employee wages will qualify for the subsidy. There does not appear to be any restrictions for remuneration paid to business owners.
Please contact us if COVID-19 has impacted your business and to see if you would qualify for this wage subsidy. We can work with you to make that determination and to assist with the application process.