Our priority at Elementus Wealth has always been providing financial plans and strategies to maintain financial health and well being in your personal life and in your business throughout all stages of business development and in all market conditions.
During these uncertain and unprecedented times we are keeping our clients up to date with government relief for those individuals and businesses affected by Covid19.
Canadian Emergency Wage Subsidy (CEWS)
Recently, Ceridian Canada had a webinar about the Canadian Emergency Wage Subsidy (CEWS) available. They answered many of the questions we all have. See below.
What is the CEWS?
- The new Canadian Emergency Wage Subsidy (CEWS) provides a 75% wage subsidy eligible to employers for up to 12 weeks, retroactive to March 15th, 2020. The CEWS is intended to prevent further job losses, encourage employers to re-hire workers previously laid off as a result of Covid19 and help employers resume normal operations following the crisis
Who is a qualifying employer?
- Essentially all taxable corporations (other than public institutions such as crown corporations, universities, and hospitals) including public corporations and Canadian corporations controlled by one or more non-resident persons
- The employer must have experienced a revenue reduction based on two options
- Employer must have experienced a 15% reduction in qualifying revenue for March 2020 compared to March 2019 and a 30% reduction in qualifying revenue In April and May 2020 compared to April and May 2019 respectively
- Employer can rely on average revenues earned in January and February 2020 as the baseline used instead of March, April, May 2019
What are the 3 time/ claim periods of the CEWS
- There are 3 relevant time periods for the purpose of the CEWS
- March 15- April 11
- April 12- May 9
- May 10- June 6
- Eligibility must be established for each of the three 4 week claim periods
- Any employer that qualifies in one time/ claim period is “deemed” to qualify for the next time/ claim period
- Bill C-14 permits additional time/ claim periods to be added by regulation until September 30, 2020
Is an eligible employer entitled to the wage subsidy employees?
- No- it is not available in respect of those employees who were without remuneration for 14 or more consecutive days in the applicable time/ claim period
- By way of example; for the first 4 week period of March 15- April 11 if any of the employers employees were without remuneration for 14 or more consecutive days then the employer cannot claim the CEWS for these employees in this period
Do employees have to perform actual work during the time/ claim period?
- No- the intent of the CEWS is to enable the employers to re-hire workers previously laid off and to keep those already on payroll.
How much does an employer receive from the CEWS?
- The CEWS amount for a given employee on eligible remuneration paid of 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 baseline weekly eligible remuneration whichever is less
- In effect employers may be eligible for a subsidy of up to 100% of the first 75% of pre-crisis wages or salaries of existing employees up to $847 per week
Is there a limit on the CEWS amount?
- No limit but:
- Any benefit received from the 10% Temporary Wage Subsidy paid in a specific period would reduce the amount claimed for the CEWS for that period
- For those employees participating in the EI Work Sharing Program, EI benefits received by the employees through the work-sharing program will reduce the CEWS wage subsidy benefit
- The government backgrounder reminds employers to make “best efforts” to top up employees wages to pre-crisis levels
How do employers apply?
- Applications must be made before October 2020
- Via the CRA web portal or through a web-based app
- No *paperwork is required to be submitted in support of the application but employers must keep records to support any future audit by CRA
Are there any penalties in the Bill?
- Employers participating in artificial transactions to reduce revenues will be subject to a penalty of 25% of the value of the CEWS amount claimed; in addition to the requirement to repay in full the CEWS amount
- Although not a penalty, employers should be aware the legislation gives the Minister of National Revenue the authority to publicize the name of any person who has claimed the CEWS.
Canadian Emergency Commercial Rent Assistance
Prime Minister Justin Trudeau announced on Friday, April 24, 2020 they had reached agreements with all provinces and territories to lower rent by 75% for small businesses impacted by Covid19- relief program set to launch mid- May 2020.
Which small businesses are eligible?
- Paying less than $50,000 a month in rent
- Temporarily ceased operations or at least a 70% drop in pre- Covid19 revenues
What are the time/ claim periods
- April, May and June 2020
When is the program open?
- Mid May 2020
How much is the commercial rent relief?
- Canadian Emergency Commercial Rent Assistance (administered by Canada Mortgage and Housing Corp.) will provide forgivable loans to qualifying commercial property owners to cover 50% of three monthly rental payments payable by eligible small businesses suffering hardship during April, May, and June. The loans will be forgivable if the mortgaged property owner agrees to reduce the eligible small business tenants rent by 75%- which will include a pledge not to evict the tenant while the agreement is in place.
- The small business tenant will then cover the remaining 25%