Canada Emergency Wage Subsidy


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.


  • 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.


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

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.

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