After a lengthy period of debate on Saturday at an emergency sitting of parliament, the $73-billion wage subsidy was passed. With normal parliamentary procedures being waived to get the bill through the House of commons in a single day, the bill is being designed to help companies avoid laying off staff during the COVID-19 pandemic.

The new Canada Emergency Wage Subsidy provides a 75% wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15th. The CEWS aims to prevent further job losses, encouraging employers to re-hire workers previously laid off as a result of COVID-19, and looks to help better position Canadian companies and other employers to more easily resume normal operations following the crisis.

Eligible employers includes:

• individuals
• taxable corporations
• partnerships consisting of eligible employers, nonprofit organizations and registered charities. Those that see a drop of at least 15% of their revenue in March 2020 and 30% for eligible periods.

The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020 is the greater of:

• 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
• the amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of the employee’s pre-crisis weekly remuneration, whichever is less.

The government has expanded the CEWS by introducing a new 100% refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. This refund covers 100% of employer-paid contributions for eligible employees for each week which employees are on leave with pay and for which the employer is eligible to claim for the CEWS for those employees.

The federal government explained that eligible employers will be able to apply for the CEWS through the Canada Revenue Agency’s My Business Account portal. Employers will need to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly.

View Full Details on the Wage Subsidy Here