With many Canadian provinces moving on to the next phase of opening businesses back up as COVID-19 cases continue to drop, the federal government has acknowledged many employers are relying on the Canada Emergency Wage Subsidy (CEWS) to fund up to 75% of their employees’ wages while their businesses recover from novel coronavirus impacts.
The CEWS wage subsidy covers up to 75% of the first $58,700 earned per employee. This equates to a subsidy of up to $847/week per employee.
When the Canada Emergency Wage Subsidy (CEWS) was originally announced back in March of 2020, it was intended for non-profit organizations and small businesses, with the eligibility criteria being opened up to more businesses as the government-mandated shutdown of non-essential businesses continued on. According to CBC, CEWS has paid out $18.01 billion to 252,370 companies as of July 6, 2020.
Can I Still Apply for the Canada Emergency Wage Subsidy (CEWS)?
Yes. The CEWS program is currently accepting applications for employees that will be brought on, as well as providing retroactive funding for employee wages earned from March 15, 2020 to August 29, 2020. This program was designed to encourage employers to re-hire workers previously laid off as a result of COVID-19, as well as help to prevent further job losses and put business owners in a better position to resume normal operations following the crisis.
Apply for the Canada Emergency Wage Subsidy (CEWS) on Canada.ca.
Is My Business Eligible for CEWS?
Over time the federal government has expanded their eligibility criteria for CEWS to be more inclusive for Canadian businesses that are struggling with revenues during the pandemic. Businesses must fit within each of the three main eligibility criteria: (1) Be an eligible employer, (2) Have a reduction in revenue related to COVID-19, (3) have a CRA payroll account on or before March 15, 2020.
1. The Full List of Eligible Employers:
- Individuals (including trusts);
- Corporations that are not exempt from income tax (Part I of the Income Tax Act);
- The following persons that are exempt from income tax (Part I of the Income Tax Act):
- Non-profit organizations;
- Agricultural organizations;
- Boards of trade;
- Chambers of commerce;
- Non-profit corporations for scientific research and experimental development;
- Labour organizations or societies; and
- Benevolent or fraternal benefit societies or orders.
- Registered charities;
- Certain Indigenous government-owned corporations that carry on a business;
- Partnerships consisting of eligible employers and certain Indigenous governments;
- Registered Canadian amateur athletic associations;
- Registered journalism organizations;
- Private schools or private colleges; and
- Partnerships consisting of eligible employers (including partnerships where at least 50% of the interests in the partnership are held by eligible employers).
Canada.ca warns that public institutions such as municipalities, local governments, Crown corporations, public universities, colleges and schools, and hospitals are not eligible for this subsidy.
View the full list of eligible employers on Canada.ca.
2. Reduction in Revenue
In order to be eligible for the Canada Emergency Wage Subsidy (CEWS), there are multiple claim periods for which a business must prove they had a drop in revenues when compared to their revenues of the same time period in 2019. The current list of claim periods is shown in the chart below, with future claim periods being added to Canada.ca at a later date.
Reduction in your business’ revenues can be calculated by comparing your eligible revenue for the starting month of the claim period with your baseline revenue. Your baseline revenue can be calculated as either (1) the revenue you earned in the corresponding month in 2019, or (2) the average of the revenue you earned in January and February 2020.
Learn more about calculating your business’ revenue reduction and future claim periods on Canada.ca.
3. Having a CRA Payroll Account on or Before March 15, 2020
To prevent individuals from abusing the Canada Emergency Wage Subsidy (CEWS), the federal government requires all applicants to have already had an existing CRA payroll account in use before they apply. Businesses who initiated a CRA account from March 16 onward will be ineligible to receive funding.
Which of My Employees Are Eligible for this Wage Subsidy Program?
Canada.ca defines eligible employees as individuals employed in Canada by you (the eligible employer) during the claim period, except if there was a period of 14 or more consecutive days in that period in respect of which they were not paid eligible remuneration by you.
Retroactive funding for employees who have been laid off or furloughed can become eligible, as long as your business rehires them at their retroactive pay level and their status meets the eligibility criteria for the claim period. You must rehire and pay such employees before you include them in your calculation for the subsidy.
Read more information on employee eligibility for the CEWS program on Canada.ca.
What COVID-19 Support Programs Should I Apply for if I Am Not Eligible for CEWS?
Businesses not eligible for the Canada Emergency Wage Subsidy (CEWS) can look at the following Canadian federal and provincial COVID-19 financial support programs:
This program provides interest-free loans to support Ontario SMEs ineligible for other COVID-19 funding programs. Funding for this program is limited and we strongly encourage you to reach out to a member of the Mentor Works team to begin the application process.
The government of Canada has increased support and flexibility to the Work-Sharing (WS) program to support families and businesses throughout COVID-19.
The CECRA program will lower small businesses’ rent by up to 75% for three months if their revenue has decreased by 70% when compared to pre-COVID-19 revenues.
This federal loan program is for large businesses with over 500 employees that require financial support from the Canadian government in response to the COVID-19 pandemic.
We’ve put together a list of the top Canadian government funding programs related to COVID-19, as well as other ongoing loans/grant programs for business cash flow. Read more.
The Ontario provincial government has allocated $50M in funding towards the Ontario Together Fund, which seeks to provide medical grade equipment to healthcare workers.
If you are interested in finding out which Canadian government funding programs your business may be eligible for, both related to COVID-19 and for growth projects, contact a member of the Mentor Works team to start the application process. Find out the latest news about funding programs related to the coronavirus by visiting our COVID-19 support page.