Federal Government Announces Changes to the Canada Emergency Wage Subsidy (CEWS) to Allow Greater Access by Employers
On July 17, 2020, the Government of Canada announced proposed changes to the Canada Emergency Wage Subsidy (CEWS). The aim of the proposed changes is to broaden the reach of the program and provide better-targeted support so that more workers can return to their jobs quickly as the economy restarts. The proposed changes loosen eligibility requirements and allow employers to receive wage subsidy amounts in proportion to any revenue loss.
The proposed changes in the Government’s draft legislative proposals would:
- 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 percent and providing a gradually decreasing base subsidy to all qualifying employers
- introduce a top-up subsidy of up to an additional 25 percent for employers that have been most adversely affected by the pandemic (50 percent or more loss in revenue)
- 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 changes, if passed, will be effective retroactive to July 5, 2020 for the fifth claim period.
The previous CEWS scheme was put in place for a 12-week period from March 15 to June 6, 2020, providing a 75 percent wage subsidy to eligible employers. It was later extended by an additional 12 weeks to August 29, 2020. The proposed changes would extend the program until November 21, 2020, with the intent to provide further support until December 19, 2020.
Please note that we have based this article on press release material from the Department of Finance and will be updated with further details once the draft legislation is released.
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