WHITEWATER REGION — The government will expand access to the proposed Canada Emergency Wage Subsidy program, providing greater flexibility for businesses, non-profits and charities to access to it. This was confirmed by the Minister of Finance Bill Morneau, the Minister of Small Business, Export Promotion and International Trade Mary Ng, and the Minister of Innovation, Science and Industry Navdeep Bains . These new measures come almost a week after the initial eligibility details were released by the government and, according to Ministers Morneau and Ng, after extensive consultation with many across the country. There have also been significant consultations with the federal opposition parties.
Further eligibility requirements announced include that to measure revenue loss, all employers will have the flexibility to compare revenues from March, April and May 2020 to those of the same months in 2019, or to an average of their revenue earned in January and February 2020; for March 2020, the government proposes to make the subsidy more accessible than originally announced by reducing the 30 per cent revenue drop requirement to 15 per cent, in recognition of the fact that many businesses did not begin to experience the effects of the COVID-19 crisis until partway through the month; recognizing that the time between when revenue is earned and when it is paid could be highly variable in certain sectors of the economy, the government is proposing that employers be allowed to measure revenues either on the basis of accrual accounting [as they are earned] or cash accounting [as they are received]. Special rules would also be provided to address issues for corporate groups, non-arm’s length entities and joint ventures.
Registered charities and non-profit organizations would also be able to benefit from the additional flexibilities being provided to employers with respect to the revenue loss calculation. In addition, recognizing that different types of organizations are experiencing different types of funding pressures, it is proposed that charities and non-profit organizations be allowed to choose to include or exclude government funding in their revenue calculation for the purposes of applying the revenue reduction test. As well, the government is proposing that employers eligible for the wage subsidy will be entitled to receive a 100-per-cent refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. This refund would apply to the entire amount of employer-paid contributions in respect of remuneration paid to furloughed employees in a period where the employer is eligible for the wage subsidy.
With these new proposed changes, the total cost of the program is expected to be $73 billion, up from the original $71 billion earmarked last week.
For employers that are eligible for both the wage subsidy and the temporary 10 per cent wage subsidy that already received Royal Assent, any benefit from the 10 per cent wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the new Canada Emergency Wage Subsidy in that same period. For employers and employees that are participating in a Work-Sharing program, EI benefits received by employees through the Work-Sharing Program will reduce the benefit that their employer is entitled to receive under the CEWS. Applications will be made through the Canada Revenue Agency’s “My Business Account” portal as well as a web-based application. Employers will have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees.
In terms of timelines for businesses to receive the wage subsidy, the Minister of Finance was adamant that the program would not be able to be delivered without the quick passage of legislation by Parliament. Minster Morneau also confirmed small businesses will be able to apply to the Canada Emergency Business Account. As a reminder, the Account will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced. To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. In order to apply, the Minister encouraged businesses to reach out online or over the phone to their banks or credit unions.
The Prime Minister announced temporary changes to the Canada Summer Jobs program that will help employers hire summer staff and provide young Canadians access to the jobs they need during this unprecedented time. The program is expected help to create up to 70,000 jobs for youth between 15 and 30 years of age. The temporary changes to the program for this year include an increase to the wage subsidy, so that private and public sector employers can also receive up to 100 per cent of the provincial or territorial minimum hourly wage for each employee; an extension to the end date for employment to February 28, 2021; allowing employers to adapt their projects and job activities to support essential services; and allowing employers to hire staff on a part-time basis.
