On April 1, 2020, the federal government provided more detailed information about the augmented wage subsidy plan that was announced on March 27, including the maximum covered earnings and the eligibility criteria for employers.
Key points to know about the Canada Emergency Wage Subsidy program include:
- There is a cap of $58,700 on the earnings that will be subsidized at the previously announced rate of 75 percent (this is an annualized figure corresponding to a payment of $847 per week);
- The plan will be in place for 12 weeks, retroactive to March 15 and expiring on June 6;
- To be eligible, an employer must have experienced a 30% decline in its gross revenues in March, April or May, when compared to the same month in 2019;
- There are no size or sectoral restrictions on eligibility (other than public sector entities that are not eligible);
- Entitlement to subsidies will be based on salary, wages and other remuneration actually paid by the employer (such remuneration being the amounts for which the employers would be required to withhold or deduct amounts under its income tax obligations), but excludes items such as severance pay and vehicle allowances and the remuneration paid to an employee eligible for the Canadian Emergency Response Benefit announced on March 20;
- Employers will be expected to make best efforts to top-up salaries to 100% of the maximum wages covered;
- Employers that are not eligible for the subsidy may continue to qualify for the 10 percent Wage Subsidy that was announced earlier and which is in effect from March 18 to June 20 and would be able to furlough employees who are eligible for the Canadian Emergency Response Benefit;
- Employers eligible for both the Canada Emergency Wage Subsidy and the 10 percent Wage Subsidy will see a reduction in the amount available to be claimed by Canada Emergency Wage Subsidy by the amount received under the 10 per cent Wage Subsidy for a given period;
- Details with respect to non-profits and charities for which revenue is not an appropriate criterion will be announced later.
The Canada Revenue Agency (CRA) will administer the program. Employers that are eligible to participate will apply via an online portal. Additional information about the application process and the portal will be released in the near future. Also to come are the regulations that will officially establish the wage subsidy program.