COVID-19 Updates to Important Subsidy Programs
“75%” Canada Emergency Wage Subsidy (CEWS)
The Federal government has passed into law the Canada Emergency Wage Subsidy (CEWS) as well as the 10% Temporary Wage Subsidy. As we noted before, the CEWS provides for an amount to employers equal to 75% of employees’ remuneration paid, up to a maximum of $847 per week per employee, from March 15, 2020 to June 6, 2020.
Employers that qualify for the CEWS in one period will now automatically qualify for the NEXT claiming period. See our April 8, 2020 Blog for the details on the revenue reduction qualification thresholds.
It’s important to note that where an employee’s pre-crisis wages were below the threshold of $58,700 the CEWS does in fact provide a subsidy of 75% of the pre-crisis’ wages. In the event that post-crisis wages for that employee are reduced, the CEWS in effect starts to provide a subsidy that is greater than 75%. Read details of this program here.
Remember that for the employers who don’t qualify for the CEWS, the 10% Temporary Subsidy may be available to them – see our April 2, 2020 Blog.
Canada Emergency Business Account (CEBA)
An important criticism of this program was the eligibility criteria of requiring 2019 total payroll between $50,000 and $1M. In response, the government has widened the eligibility range so that employers with payrolls in calendar 2019 of between $20,000 and $1.5M are now eligible. The commercial banks are managing this program, and we have seen these loans be processed within about 5-7 banking days after applications were completed. Read details on this program here.
Canada Emergency Response Benefit (CERB)
On April 15, the government announced changes to the eligibility rules of this program as follows:
Allow people to earn up to $1,000 per month while collecting the CERB.
Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.
Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
Read details of this program here.
National Research Council IRAP Innovation Assistance Program
This program assists start-ups during the COVID-19 crisis as follows:
This program is for small and medium-sized enterprises with less than 500 employees in the innovation industry. You may qualify if you are in the pre-revenue, high growth, enterprise SaaS and tech space.
The focus is on labour costs (i.e. salaries and benefits) with the goal of helping companies retain highly skilled labour. The scale of support is based on the number of skilled labourers.
There will be $250 million funding with built-in scalability components. The funding is not tied to COVID-19.
If you qualify for the wage subsidy and take advantage of the 75% wage subsidy, you do not qualify for this program.
Speaking with the ITA Advisor is required as part of the application process. Unlike the typical IRAP application, this program will not look at the tech component.