Update on Federal Government COVID-19 relief programs

Apr 09, 2020  |   Compensation and Benefits

On April 8, 2020 the Federal Government provided several important updates regarding previously announced programs designed to help employers and employers weather the COVID-19 storm.

Update on the Canada Emergency Wage Subsidy Program (CEWS)

The eligibility criteria has been clarified and employers will now need to show a decline in revenue of 15% in the month of March to be eligible for the 75% wage subsidy. For April and May thes requirement remains at 30% decline in revenue.

The program provides for up to $847 per week, per employee, for up to 12 weeks. It will run from March 15 to June 6, and may be extended but no such commitment has been made.

Further, March, April, and May revenue loss can be measured against the same month in the previous year, or against the average revenue earned in January and February of this year.

Additionally, revenue may be calculated in one of two ways:

  • Revenue as it is earned during the month (monthly billing), or
  • Revenue as it is received (monthly receipts)

Not-for-profits and charitable organization can include or exclude government funding in their revenue for the purpose of calculating revenue lost.

For companies looking to rehire employees, the Government is considering allowing firms to receive a 100% subsidy for employer-based contributions such as Employment Insurance, CPP.

This program is yet to receive Parliament’s approval and the hope is to have the program in place in the next 3 to 6 weeks.

For now, employers continue to be eligible for the 10% wage subsidy program which was previously announced under the Emergency Response Act.

Employers who qualify for both programs will see their payments adjusted once the CEWS program is running.

Update on the Canada Emergency Business Account

The Federal Government previously announced this program which will provide interest-free loans of up to $40,000 to small businesses and not-for-profit organizations, with the possibility of having up to $10,000 of the loan forgiven.

Applications for this program will begin on April 9, 2020 and will be managed through small and large Canadian banks.

Update on the Canada Summer Jobs Program

Also, on April 8, the Prime Minister announced temporary changes to the Canada Summer Jobs Program. They include:

  • An increase to the existing wage subsidy of up to 100% of the provincial or territorial minimum wage for each employee
  • The Program will extend the end date for employment to February 2021
  • Employers will be allowed to hire staff on a part-time basis as well.

This program’s wage subsidy is separate from the CEWS.

The Canada Summer Jobs call for applications for the 2020 season closed on February 28, 2020. The Government will work with Members of Parliament to identify organizations that provide essential services in the community and could provide youth jobs but did not apply for the Canada Summer Jobs program in 2020.