COVID-19 Tax Update: B.C. announces CEWS-like employment incentive

On September 17, 2020, the government of British Columbia announced that it would introduce the B.C. Increased Employment Incentive (BCIEI).  The BCIEI is a refundable tax credit with criteria similar to the federal Canada Emergency Wage Subsidy (CEWS); see our latest detailed blog on the CEWS here.  Although legislation for the BCIEI has yet to be released, the B.C. government confirmed that employers will be able to receive assistance under both the federal and provincial programs. Public institutions, such as municipalities, schools, school boards, public post-secondary institutions, hospitals, and health authorities, will not be eligible for the BCIEI.

An employer’s entitlement to the BCIEI is based on the increase, if any, in remuneration it pays to employees during the period from October 1 – December 31, 2020 as compared to the period from July 1 – September 30, 2020.  In essence, the BCIEI measures the increase in employee remuneration between Q3 and Q4 2020.

The tax credit itself is calculated as 15% of the amount by which an employer’s “qualifying B.C. remuneration” exceeds its “base B.C. remuneration”.  Qualifying B.C. remuneration means the total B.C. remuneration paid to eligible employees from October 1 – December 31, 2020 (i.e., Q4 2020), and base B.C. remuneration means the total B.C. remuneration paid to eligible employees from July 1 – September 30, 2020 (i.e., Q3 2020). Each calculation is capped at a maximum of $1,129.33 per employee per week.  Employers can increase the remuneration they pay during the fourth quarter of 2020 either by hiring new employees or increasing the salary/wages paid to existing employees; both new and continuing employees qualify.

As noted above, legislation for the BCIEI has not yet been released.  The B.C. government intends for the application period to begin in March 2021.

 

Prepared by: Tyler Berg

Tyler is an Associate working in the Vancouver office. During his law degree, Tyler participated in the Law Students’ Legal Advice Program and the UBC Law Review, and played intramural ice hockey for the UBC Law Legal Eagles. Tyler also… more »

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