As Canada starts to open back up after the third wave of COVID-19, many businesses across the country are relying on the Canada Emergency Wage Subsidy (CEWS) to partially fund their employees’ wages. With coronavirus variant cases on the rise in many provinces and the threat of another lockdown looming over businesses, many Canadian employers are relying on the 75% wage subsidy to prevent layoffs and keep their business afloat. According to Canada.ca, CEWS has approved 3,800,000+ applicants and paid $85.08 billion in wage subsidies since the program started in March of 2020.
CEWS covers 75% of an employee’s first $58,700 earned, which equates to a subsidy of up to $847/week per employee.
The CEWS program was originally announced in March of 2020 and put in place until August 29, 2020. An announcement was made mid-July 2020 that the CEWS program would be receiving its first extension until December 2020, and later received its second and longest extension to date until June 2021, and its third and final extension until September 2021. As it stands, the CEWS program will be in effect for at least 18 months in total.
Businesses who are not eligible for CEWS can look into the recently announced Canada Recovery Hiring Program (CRHP) which provides up to 50% of employees’ wages to a maximum of $1,129 per week.
Use the following hyperlinks to jump to the designated categories below:
- Can I Still Apply?
- Is My Business Eligible?
- Are My Employees Eligible?
- How Do I Calculate How Much I Am Eligible for?
- Alternatives to CEWS
- Income Support Options
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. 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 two main eligibility criteria. Click the links below to scroll down:
1. The Full List of CEWS-Eligible Employers:
- Corporations and trusts 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. CRA Payroll Account in Place on or Before March 15, 2020
To prevent abuse of the Canada Emergency Wage Subsidy (CEWS), the federal government requires all applicants to have already had a CRA payroll account in use before they apply. Businesses who initiated a CRA account from March 16 onward will be ineligible to receive funding.
3. Reduction in Revenue
CEWS allows businesses to retroactively claim wage subsidies for previous periods if they met the eligibility criteria during those periods. View all upcoming and previous CEWS periods and their required reductions in revenues on the Canada.ca page.
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.
How Do I Calculate How Much I Am Eligible for?
Canada.ca has an easy-to-use CEWS Wage Subsidy Calculator that can tell you exactly how much your business will be eligible for during each claim period.
What COVID-19 Support Programs Should I Apply for if I Am Not Eligible for CEWS?
We strongly urge all businesses not eligible for the Canada Emergency Wage Subsidy (CEWS) to view our COVID-19 Canadian business support page. We have summarized a few of the top COVID-19 financial support programs below:
The hiring program provides up to 50% of employee wages to a maximum of $1,129 per week for businesses that have been hit the hardest by the pandemic. This program will offset a portion of the extra costs employers must take on as they reopen. These costs could include increased wages, hours worked, or hiring more staff.
The government of Canada has increased support and flexibility to the Work-Sharing (WS) program to support families and businesses throughout COVID-19.
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.
The Ontario provincial government has allocated $50M in funding towards the Ontario Together Fund, which supports manufacturing and innovation for goods and services critical to the health, safety, and security of Ontarians.
What to Do if You Cannot Bring Your Employees Back
Layoffs should always be a last resort option and we strongly encourage you to research the programs listed above to help bring your workforce back. If your business remains unable to bring its employees back to work, you can help them navigate their income support options after CERB, including the Canada Recovery Benefit (CRB).
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.