COVID-19 Tax Update: Government Extends CEWS until December 2020 and Revamps Eligibility Criteria

On July 17, 2020, the Department of Finance released draft legislative proposals (link) providing further relief related to COVID-19. Included were extensive revisions to the CEWS rules to, among other things:

  • extend the CEWS program until at least November 21, 2020;
  • extend the application deadline from September 30, 2020 to January 31, 2021;
  • ease the revenue reduction percentage required to access the program (with the subsidy amount calculated on a sliding scale);
  • gradually phase-out the maximum subsidy rate;
  • add continuity rules regarding mid-year business acquisitions and amalgamations;
  • introduce rules for “payroll service providers”; and
  • going forward, remove the requirement that eligible employees not be without remuneration for 14 consecutive days.

The proposed amendments are highly complex and represent a substantial revamp of the CEWS program. We are preparing a blog post with additional details regarding the proposals. In the meantime, read our earlier in-depth blog on the CEWS here.

Finally, the draft legislative proposals also resurrect the provisions originally contained in Bill C-17 providing for the suspension or extension of certain time limits under, among other statutes, the Income Tax Act (Canada) – see our earlier blog including a discussion of those measures here.

Prepared by: Alexander Demner

Alexander is a partner practicing in the firm’s Vancouver office. Alexander’s practice covers several areas of taxation, including owner-manager remuneration, estate planning, pre-sale and divestiture structuring, and taxpayer representation (both at the administrative appeal stage and in front of the… more »