On October 14, 2020, the Department of Finance released a backgrounder providing additional details on the proposed extension to the Canada Emergency Wage Subsidy (the “CEWS”) program, as first announced in the Speech from the Throne. Read our detailed blog post on the previous amendments to the CEWS here.
Notable takeaways from the backgrounder include:
- The CEWS will be extended until at least June 2021. This is significantly later than the end date of November 21, 2020 as currently set out in the legislation.
- The maximum base percentage will remain at 40% until December 19, 2020.
- For qualifying periods beginning on or after September 27, 2020, employers will be able to calculate their top-up revenue reduction percentage using a year-over-year monthly revenue comparison, rather than the rolling three-month average as currently set out in the legislation. This new formula is intended to harmonize the calculation with the revenue reduction percentage “Safe harbour” rules will allow employers to choose between the current formula and the new formula for the September 27 – December 19, 2020 qualifying periods (to ensure the change does not lead to a less generous wage subsidy).
- For qualifying periods beginning on or after October 25, 2020, the formula for calculating the subsidy in respect of wages paid to a furloughed employee will be aligned with the employment insurance (EI) program. The subsidy for such employees will generally be equal to their eligible remuneration, up to a maximum of $573 per week.
Legislation implementing the above amendments has not yet been released. In the meantime, Finance plans to issue a more detailed technical backgrounder in the near future.