Update April 8, 2020: The federal government has announced further details of its plan for additional support for businesses in the hopes of encouraging employers to keep employees on payroll, or re-hire employees who have been laid off, during the downturn resulting from the measures to reduce the spread of COVID-19. The Canada Emergency Wage Subsidy includes a 75% wage subsidy for employees. Once active, the subsidy will be applied retroactively to March 15, 2020.
All of the details of the subsidy have not yet been disclosed, and changes to the proposal have already been made. However, we do know that it will be available to all Canadian businesses, non-profits, and registered charities. The employer will be required to demonstrate a decrease in gross revenue of 15% in March, 30% in April, or 30% in May from 2019. For non-profits and registered charities, the government has said it will work with the sector to ensure the definition of revenue is appropriate to their circumstances. Once the threshold is met, the employer will qualify for coverage up to 75% of wages for the first $58,700 an employee earns, with a maximum of $847 per week for up to 12 weeks between March 15th and June 6th. The organization is expected to make its best efforts to cover the remaining amount to bring the employees’ wage up to 100%.
The government is also proposing that eligible employers be entitled to a 100% refund for certain employer contributions to Employment Insurance and Canada Pension Plan in respect of employees who are on leave with pay.
Applications for the wage subsidy program will become available through the Canada Revenue Agency portal sometime in the next two to six weeks. More details regarding how to apply are to come. We will continue to keep you updated as things progress.
If an organization does not qualify for the 75% wage subsidy; an alternate, 10% wage subsidy may be available, up to a maximum of $1,375 per employee and $25,000 per employer.
This article is intended to be an overview of the law and is for informational purposes only. Readers are cautioned that this article does not constitute legal or professional advice and should not be relied on as such. Rather, readers should obtain specific legal advice in relation to the issues they are facing.