Canada Emergency Wage Subsidy Phase-out

Posted
April 20, 2021
in

The 2021 Federal Budget proposes that CEWS will be extended to September 25, 2021, but will start phasing out after July 3, 2021. Only employers with more than a 10% decline in revenues will be eligible for the wage subsidy as of that date.

CEWS Base and Top-up Rates, Periods 17 to 20

Period 17Period 18Period 19Period 20
Date RangeJune 6 - July 3July 4 - July 31Aug 1 - Aug 28Aug 29 - Sep 25
Maximum weekly benefit per employee*$847$677$452$226
Revenue Decline:
70% and over75%60%40%20%
50-69%40% + 1.75 x (revenue
decline -
50%)
35% +
1.25 x
(revenue
decline -
50%)
25% +
0.75 x
(revenue
decline -
50%)
10% + 0.5
x (revenue
decline -
50%)
>10-50%0.8 x
revenue
decline
0.875 x
(revenue
decline -
10%)
0.625 x
(revenue
decline -
10%)
0.25 x
(revenue
decline -
10%)
0-10%0.8 x
revenue
decline
0%0%0%
*The maximum weekly benefit per employee is reached when eligible remuneration paid to the employee for the qualifying period is at least $1,129 per week.

Reference Periods
The reference periods for determining the revenue decline are as follows:

Period 17
Jun. 6 –
Jul. 3
Period 18
Jul. 4 –
Jul. 31
Period 19
Aug. 1 –
Aug. 28
Period 20
Aug. 29 –
Sep. 25
General ApproachJun. 2021
over Jun.
2019 or May
2021 over
May 2019
Jul. 2021
over Jul.
2019 or Jun.
2021 over
Jun. 2019
Aug. 2021
over Aug.
2019 or Jul.
2021 over
Jul. 2019
Sep. 2021
over Sep.
2019 or Aug.
2021 over
Aug. 2019
Alternative ApproachJun. 2021
or May 2021
over
average of
Jan. and
Feb. 2020
Jul. 2021
or Jun. 2021
over
average
of Jan. and
Feb. 2020
Aug. 2021
or Jul. 2021
over
average of
Jan. and
Feb. 2020
Sep. 2021
or Aug. 2021
over
average of
Jan. and
Feb. 2020
The approach chosen in the prior periods must be maintained.

Baseline Remuneration
An employer’s entitlement to CEWS in respect of an employee may be affected by their baseline remuneration, also known as pre-crisis remuneration. Absent an election, baseline remuneration is calculated using the period beginning January 1, 2020 and ending March 15, 2020. Budget 2021 proposes to allow an eligible employer to elect to use the following alternative baseline remuneration periods:

  • March 1 to June 30, 2019 or July 1 to December 31, 2019, for the qualifying period between June 6, 2021 and July 3, 2021; and
  • July 1 to December 31, 2019, for qualifying periods beginning after July 3, 2021.

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