COVID-19: Updates to the Canada Emergency Wage Subsidy

As  part of our series of publications aimed at keeping you, and your business, informed with respect to Federal and Provincial responses to the COVID-19 pandemic, we provide a brief update in respect of the Canada Emergency Wage Subsidy (“CEWS”) and the Federal government’s recently announced changes to eligibility.

Today, April 8, 2020 the Prime Minister announced changes to the upcoming CEWS to make it more widely available to businesses in need. Previously, it was anticipated that the CEWS would be available to those businesses that demonstrate a 30% decrease in revenue over the same month in 2019. For more information about  CEWS, generally, and the eligibility requirements, please see our previous article.

This morning’s announcement introduced two changes to the eligibility requirements of the CEWS; both making it easier for businesses to qualify.

First, businesses need now only demonstrate only a 15% decrease in revenues in March 2020, given that the COVID-19 impacts were not realised by most businesses in Canada until mid-March. However, businesses will still need to demonstrate a 30% decrease in revenue in April and May 2020 to remain eligible for continued access to the CEWS.

Second, businesses will now be permitted to use their revenue from January and February of 2020 as comparators to demonstrate the required loss of revenue in March 2020.

Moreover, registered charities and NGO’s will have the option to include or exclude government funding from their revenue calculations when applying for the CEWS.

The Prime Minister stated that the government’s rationale was based on dialogue with stakeholders and businesses which urged that  a degree of flexibility be added to the CEWS in order to make the benefit more accessible to small businesses, new businesses, rapidly expanding businesses, start-ups, and charities and non-profit organizations.

The CEWS has already inspired confidence in many businesses, as major employers such as Air Canada have recently announced that they will be rehiring thousands of employees with the anticipated assistance of the CEWS.

Finally, Prime Minister Trudeau announced that a cabinet meeting will be convened today, April 8, 2020, to discuss the updates to the CEWS and that Parliament will be called to vote on the legislation very soon. While we do not yet know the anticipated rollout date for the CEWS, we so know that it will be retroactive to March 15, 2020. In the interim, we will continue to monitor the legislation as it moves through parliament to ensure that we can advise you, and your business, of any additional changes to the proposed legislation and the available benefits and, most importantly, on how and when your business can apply.