The Government of Canada has created a revised criterion for applicants of the Canada Emergency Wage Subsidy (CEWS) program. For eligible businesses affected by COVID-19, this subsidy works to cover 75% of employee wages for up to 12 weeks between the periods of March 15th, 2020 and June 6th, 2020.
When can businesses apply?
From April 27th businesses can begin applying for CEWS through their CRA My Business Account.Until this program becomes available on April 27th, businesses can ensure that their information is up to date in their CRA account.
To assist businesses, the government has provided a new online calculator to estimate the amount of subsidy they can expect to receive. In order to use this, an eligible employer will need their total number of eligible employees and their gross payroll.
An eligible employer includes individuals, taxable corporations, persons exempt from corporate tax, registered charities and partnerships that have experienced the revenue reduction mentioned below and have had a CRA payroll account as of March 15th, 2020.
To qualify for this subsidy, a business must demonstrate a minimum of 15% decline in revenue for the month of March and a minimum 30% decline for the months of April and May. This decline will be determined by a comparison of March, April, or May 2020 revenues to the same months in 2019 or by comparing them against January 2020 or February 2020 revenues. For this comparison, businesses can use either a cash or accrual method, however, the chosen method must stay consistent throughout the duration of the program.
The government expects to process 90% of applications by May 5th, after which direct deposits and cheques should follow. More information regarding CEWS and how to apply, please visit CRA’s website.