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Canada’s wage subsidy now enacted – KPMG

Canada’s wage subsidy now enacted - KPMG

Author:  KPMG Canada

The Canada Emergency Wage Subsidy (CEWS), which helps businesses protect workers’ jobs during the COVID-19 pandemic, was further clarified in Bill C-14, the COVID-19 Emergency Response Act, No. 2. The Bill received royal assent on April 11, 2020, bringing this measure into law. The CEWS is a temporary government subsidy that will generally provide an amount to eligible employers of all sizes and sectors (with a few exceptions) equal to 75% of employees’ remuneration paid, up to a maximum of $847 per week. This is equivalent to 75% of an annual salary of $58,700. The CEWS is currently available for three qualifying periods, from March 15, 2020 to June 6, 2020.

Finance stated that employers will now only have to show that they have experienced a 15% reduction in revenue in March 2020 to claim the subsidy (instead of a 30% reduction), and indicated that, in certain circumstances, employers can also choose to use an average of revenue for January 2020 and February 2020 to compare to their revenue for March, April and May 2020, instead of the equivalent month from 2019. The government also noted that it will offer additional flexibility for the revenue loss calculation to registered charities and non-profit organizations.

As well, employers that qualify under the CEWS will be eligible to receive a refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan.

Download the latest edition of the KPMG TaxNewsFlash to learn more.

For more information on the updated Canada Emergency Wage Subsidy, please contact:

Torran Jolly, Partner
Corporate Tax, KPMG LLP

Sebastian Elawny, Partner
Business Law, KPMG Law LLP

Jenna Kirk, Lawyer
Employment & Immigration Law, KPMG Law LLP

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