The Federal government has proposed significant changes to the Canada Emergency Wage Subsidy (“CEWS”) to expand the scope and reach of the program. The government has been under pressure to make changes by, in particular, loosening the 30% reduction in revenue threshold. The government has released a Backgrounder and a News release.
As of July 13, 2020, 262,200 companies were approved for the CEWS, with 675,530 applications received and 667,400 approved. The government has paid out $20.38 billion under the program (Claims to date – Canada emergency wage subsidy (CEWS)).
A summary of some of the changes is found in the News Release:
- Allow the extension of the CEWS until December 19, 2020, including redesigned program details until November 21, 2020.
- Make the subsidy accessible to a broader range of employers by including employers with a revenue decline of less than 30 per cent and providing a gradually decreasing base subsidy to all qualifying employers. This would help many struggling employers with less than a 30-per-cent revenue loss get support to keep and bring back workers, while also ensuring those who have previously benefited could still qualify, even if their revenues recover and no longer meet the 30 per cent revenue decline threshold.
- Introduce a top-up subsidy of up to an additional 25 per cent for employers that have been most adversely affected by the pandemic. This would be particularly helpful to employers in industries that are recovering more slowly.
- Provide certainty to employers that have already made business decisions for July and August by ensuring they would not receive a subsidy rate lower than they would have had under the previous rules.
- Address certain technical issues identified by stakeholders.
The Backgrounder provides considerable information about the proposed changes and the consultation process and findings leading to the proposed amendments including examples of CEWS calculations.