The Canada Emergency Wage Subsidy (CEWS) program has opened for applications.
A central pillar of the federal government’s COVID-19 Economic Response Plan, CEWS consists of a 75 per cent wage subsidy on the first $58,700 of employees’ wages for three months, retroactive to March 15, 2020. This subsidy is available to qualifying businesses, charities and not-for-profit organizations that have experienced at least a 30 per cent decline in revenue due to COVID-19.
Eligibility for the Canada Emergency Wage Subsidy
Eligibility for the program is simple. Businesses must full into one of the following categories:
- individuals (including trusts)
- taxable corporations
- persons that are exempt from corporate tax (Part I of the Income Tax Act), other than public institutions:
- non-profit organizations
- agricultural organizations
- boards of trade
- chambers of commerce
- non-profit corporations for scientific research and experimental development
- labour organizations or societies
- benevolent or fraternal benefit societies or orders
- registered charities
- partnerships consisting of eligible employers
Public institutions are not eligible for the subsidy. This includes municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals.
Establishing Eligible Revenue Reduction
Businesses must assess whether they are eligible to receive CEWS within a particular period. If you determine you qualify for CEWS for one claim period, you will automatically qualify for the following claim period.
Calculate your reduction by comparing eligible revenue for the starting month of the claim period with your baseline revenue. This figure can be established in one of two ways:
- Revenue earned in the corresponding month in 2019, or
- Average of the revenue earned in January and February
Refer to the graphic below for guidance:
What is Considered Eligible Revenue?
For the purposes of the Canada Emergency Wage Subsidy (CEWS), eligible revenue is classified as revenue earned from:
- Selling goods
- Rendering services
- Others’ use of your resources
You can use the cash method or accrual method to calculate revenue, but you must use the same approach throughout.
How to Apply
Applications for the Canada Emergency Wage Subsidy (CEWS) are now open. Employers can apply for the CEWS through My Business Account or through the CRA’s online application portal, and their representatives can apply through Represent a Client. The Government of Canada has also prepared a handy calculator for establishing the subsidy amount your business will receive.