As of Monday, August 17th, eligible employers can apply for Period 5 of the Canada Emergency Wage Subsidy (CEWS), which is the first Period where the newly updated subsidy rules are applicable. The changes to the CEWS are complex and numerous. The most relevant changes include:
- A revenue decline of any amount qualifies a business for CEWS
- Instead of a flat subsidy, there is now a sliding scale subsidy dependent on the percentage of revenue lost
- If revenue loss is greater than 50%, a Top-Up subsidy also applies
The expanded eligibility allows for the vast majority of businesses to be eligible for the CEWS. If you have seen any revenue loss in July 2020 or June 2020 compared to the same month in 2019 or the average of your January and February 2020 revenues, you are likely eligible to receive the CEWS for Period 5.
The Canada Revenue Agency (CRA) has updated its application webpage to include an online calculator for companies with a small number of employees and a calculation spreadsheet for larger companies. Remember that there is a “Safe Harbour” provision that enables employers to receive the same subsidy amount for Periods Five and Six as they would have under the previous rules if the new rules result in a lower subsidy. The new online calculator and spreadsheet issued by the CRA considers both the previous and new rules to determine which is better for your business. Inputting employee remuneration in this new calculation is similar to the previous calculation. However, businesses now have to input monthly revenues in order for the calculation to determine the optimal subsidy rate for your business.
With the significant increase in complexity, we recommend that all clients view our recent CEWS webinar before applying. If you are looking for further guidance or help with the new CEWS, please reach out to your Bateman MacKay LLP Account Manager.