Canada Emergency Wage Subsidy

Affinity

In response to the difficulties Canadian businesses are facing the Canadian Government announced the Canada Emergency Wage Subsidy Program. We have highlighted some of the key elements below.

The Government is constantly changing the program as they work through the different scenarios and implications of the program.

Eligibility

  • The purpose of the subsidy is to prevent further job losses, encourage employers to re-hire workers previously laid off as a result of COVID-19.
  • This program provides a 75-per-cent wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020.
  • This subsidy would be available to eligible employers (defined as individuals, taxable corporations, and partnerships consisting of eligible employers as well as nonprofit organizations and registered charities) that see a drop of at least 30 per cent of their monthly revenue, year over year.
    • Revenue for this purpose is any revenue from an arm’s length source and would exclude revenues from extraordinary items and amounts on account of capital.
    • The table below outlines each claiming period and the period in which it has a decline inrevenue of 30 per cent or more.
Wage Period to be Claimed Reference Period for Eligibility
Period 1 March 15 – April 11 March 2020 vs March 2019
Period 2 April 12 – May 9 April 2020 vs April 2019
Period 3 May 10 – June 6 May 2020 vs May 2019

  • For new businesses established after February 2019, eligibility would be determined by
    comparing monthly revenues to a reasonable benchmark. Details of what constitutes a
    reasonable benchmark have not been provided at this time.
    • At this point there has also been no discussion about high growth companies with
      increase in revenue since prior year.  Such businesses may have invested towards future
      growth by hiring additional staff and are now facing mass layoffs. As of now Ottawa has
      not announced any eligibility exceptions for such businesses. We hope this will be
      addressed soon.

Amount of Subsidy

  • The subsidy amount for a given employee (including new employees) on eligible remuneration
    paid between March 15 and June 6, 2020 would be the greater of:
    • 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per
      week; and
    • the amount of remuneration paid, up to a maximum benefit of $847 per week or 75 per
      cent of the employee’s pre-crisis weekly remuneration (further details coming on what
      this means), whichever is less.
  • This means employers may be eligible for a subsidy of up to 100 per cent of the first 75 per cent
    of pre-crisis wages or salaries of existing employees. These employers would be expected where
    possible to maintain existing employees’ pre-crisis employment earnings. There is no overall limit
    on the subsidy available to each employer.
  • There are special rules for employees who do not deal at arm’s length with the employer. The
    subsidy amount will be:
    • maximum of $847 per week; or
    • 75 per cent of the employee’s pre-crisis weekly remuneration. Although, not clearly specified yet, it will likely be the lessor of the two.

Applying

More details about the application process are forthcoming. However, the following is known as of now:

  • Application will occur through CRA My Business Account Portal or a web-based application
  • Records have to be maintained of both the reduction in revenues and the amounts paid to
    employees

Other notes

  • For companies that are not eligible for this enhanced wage subsidy, the original subsidy of 10%
    remains available.
  • An employer would not be eligible to claim the Canada Emergency Wage Subsidy for
    remuneration paid to an employee in a week that falls within a 4-week period for which the
    employee is eligible for the Canadian Emergency Response Benefit.

As previously noted, the program is ever evolving as the Government works through the nuances and
details of the program. Please continue to re-visit this post for further updates.

If you have any questions or would like to discuss further, please feel free to contact us.

What our clients had to say

I have to say the most professional, prompt, precise service you can receive from an Accountant. We’ve had a few and have found the right one. Mandeep and Rubal have really helped me get things done and I couldn’t be more appreciative. The whole staff is very friendly and their communication is fluid. Highly recommend.
Premier Tires and Wheels
Premier Tires and Wheels
19:45 04 Dec 19
We have used Affinity for our small business and personal taxes and they have been excellent. Great service. Iqbal looks after us.
Robert Napoli
Robert Napoli
22:31 22 Mar 19
HIGHLY RECOMMEND for small businesses or just starting out!! Just got off the phone with Mandeep and I couldn't be happier. She answered all my questions and told me about things I never even thought of. We are a new, small business and she informed me in all the ways I could make it easier and more cost efficient. SO looking forward to meeting with her next week, she was my first call and she will be my last! Thanks for everything Mandeep!!
Nimphus 2000
Nimphus 2000
16:59 10 Aug 18
I contacted Mandeep Tung to solicit some tax advice. Mandeep instantly understood and dissected the situation and provided clear and valuable advice which was tailored to my situation. I unhesitatingly recommend her services.
Martin Sheard
Martin Sheard
16:58 10 May 18
I was introduced to Affinity Accounting through a friend. I had such a great experience working with a Mandeep! I highly recommend working with Affinity Accounting. She made it so simple. I only had to pop in the office once! The office was beautiful.
Prem Dhesi
Prem Dhesi
05:21 17 Apr 18
Modern office is nice to visit, helpful staff. My tax return was handled efficient for a fair price. I’ll be back next year.
D Johnson
D Johnson
19:47 12 Apr 18
We are very happy with the firm particularly with Iqbal Shanghera. This is our first year with them. He has done a fantastic job of filing our returns both personal and corporate. He is always prompt, timely and goes out of the way to accommodate us. He is very friendly and very knowledgeable. I will strongly recommend the firm to anybody without hesitation.
Ramani Ramaseshan
Ramani Ramaseshan
04:50 08 Apr 18
Excellent informative service.I would for sure use them again.
douglas wang
douglas wang
14:00 17 May 17
Very knowledgeable and easy to talk to.Definitely coming back next year for my taxes.
Ravi Reddy
Ravi Reddy
16:56 08 May 17
This is the second year that Iqbal did my taxes, he is very professional and did everything quickly.He answered many of my questions throughout the year as I sold a rental property.
Harry D
Harry D
16:09 08 May 17
i really like the service that they provide . they are very polite and helpful and they have a solution for every question..
Manjinder Singh
Manjinder Singh
16:00 08 May 17
The expertise of the Tung Shanghera firm has provided me with tax planning strategies that not only save me money but have provided me with guidance in how to best proceed with aspects of my investment and business interests. The service standard was also excellent and the firm always addressed my inquiries thoroughly and promptly. Highly recommended!
J.S Gill
J.S Gill
00:04 04 Mar 17

Let's Get Started!

14 + 9 =

Call Us

PHONE

604-364-9060

When

HOURS

Monday - Friday
9am - 5pm

Visit Us

Address

212 - 6678 152 St.
Surrey, BC
V3S 7J2