COVID-19 Tax Update: Wage Subsidy Legislation Updated

The federal government yesterday released amendments to the Income Tax Regulations relating to two of its COVID-19-induced wage subsidy programs.

First, new section 8901.1 of the Regulations expands the eligibility for the Canada Emergency Wage Subsidy (the “CEWS”) in section 125.7 of the Income Tax Act. Newly-eligible entities include:

  • Municipal corporations and partnerships controlled by Indigenous bands
  • Partnerships whose interests are at least 50% owned by other “eligible entities”
  • Registered Canadian amateur athletic associations
  • Registered journalism organizations
  • Persons that operate private schools or colleges

These amendments are retroactive to April 11, 2020.

Second, section 111 of the Regulations outlines the amount of the 10% temporary wage subsidy in subsection 153(1.02) of the Act. The amount of that subsidy is equal to the lesser of 10% of the remuneration paid to employees (unless the employer elects a lower percentage) and $1,375 times the number of employees employed in Canada during the applicable period, up to a maximum of $25,000 per employer. The government had informally been using those figures for weeks.

Separately, the Prime Minister announced that the CEWS will be extended to the end of August. Further details have not yet been released.

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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