On April 1, 2020, the federal government disclosed additional eligibility and coverage information on its proposed Canada Emergency Wage Subsidy (CEWS), the preliminary details of which were introduced in announcements made on March 27, 2020, and on March 30, 2020. Prime Minister Trudeau has indicated that Parliament will be recalled with the purpose of adopting enabling CEWS legislation, but as disclosed in briefings and government publications on April 1, 2020, key parameters for the proposed CEWS are as follows:
The CEWS would be available to a broad swath of employers, including individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities. However, the CEWS will not be available to public bodies, including municipalities, Crown corporations, public universities, colleges, schools and hospitals.
To receive the CEWS, eligible employers would have to attest that they have experienced a drop in revenue of at least 30 percent in March, April or May, when compared to the same month in 2019, determined as follows:
| Period | Reference Period for Reduction in Revenue |
| March 15 – April 11 | March 2020 over March 2019 |
| April 12 – May 9 | April 2020 over April 2019 |
| May 10 – June 6 | May 2020 over May 2019 |
Revenue for this purpose would be the revenue from the employer's business carried on in Canada, earned from arm's-length sources.
The government intends to work with the not-for-profit and charitable sector to ensure that the definition of revenue is appropriate to their specific circumstances. Also, for eligible employers established after February 2019, eligibility would be determined by comparing monthly revenues to a reasonable benchmark.
For eligible employers, the CEWS will cover up to 75 percent of salaries and wages paid to new hires (up to a maximum benefit of $847 per week). For current employees, the amount of the CEWS for a given employee would be the greater of:
For an employee who does not deal at arm's length with their employer, the CEWS would be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75 percent of the employee's pre-crisis weekly remuneration.
Employers would be required to make best efforts to top-up employees' remuneration to pre-crisis levels. It is presently unclear whether (or to what extent) employers will be required to demonstrate the efforts undertaken to top-up employees' remuneration.
The CEWS would be in place and provide subsidy payments covering a period of up to 12 weeks, from March 15 to June 6, 2020.
Eligible employers would be able to apply for the CEWS through the Canada Revenue Agency's My Business Account portal as well as a web-based application (to be established).
The CEWS or 10 percent subsidy would be considered government assistance and included in the employer's taxable income. Either subsidy would reduce the amount of remuneration expenses eligible for other federal tax credits calculated on the same remuneration.
Employers receiving the CEWS that are determined to be ineligible would be required to repay CEWS amounts received. Penalties may apply in cases of fraudulent claims, and the government has indicated that anti-abuse rules will be introduced to ensure that the CEWS is not inappropriately obtained and to ensure that employees are paid the amounts that they are owed.
The government has estimated the cost of the CEWS at $71 billion dollars.
We will be monitoring for additional updates on the CEWS and will update you as more information is made available. If your business or organization has questions in respect of the CEWS or other employment-related matters, please contact a member of the Bennett Jones Employment Services group. In addition, please visit our COVID-19 Resource Centre for other COVID-19-related materials.