On April 1, 2020, the Government of Canada provided some additional details regarding the Canada Emergency Wage Subsidy. This program was initially announced on March 27th and the Canadian business community has been anxiously waiting for further information. Although the specific details of the program will likely not be known until legislation is released, the government provided some initial guidance.
Businesses, including non-profit organizations and charities, regardless of size or number of employees, will be entitled to the subsidy where there has been a 30% decline in revenue in March , April and May 2020 relative to the same month in 2019. This subsidy will be a maximum of 75% of the employee’s salary provided that the employee’s salary does not normally exceed $58,700 on an annual basis. The maximum subsidy is $847 per week per employee and will be in place for a 12 week period beginning on March 15 and ending on June 6. Each month will be considered separately and the employer will need to reapply each month.
For non-profit organizations and registered charities similarly affected by a loss of revenue, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their circumstances.
Although it is expected that the program will have broad application, we anticipate that further guidance on which businesses and organizations qualify and the method of calculating revenue will be provided with the upcoming legislation. The government has issued stern warnings that there will be penalties for those who manipulate the program.
Businesses will apply for the program on-line using its CRA business account and payments will be administered via direct deposit. It is anticipated that businesses will be able to access the portal to the program in 4 to 6 weeks.
It is important to note that this is a separate program from the 10% Temporary Wage Subsidy that was previously announced and therefore employers who do not qualify for the 75% Canada Emergency Wage Subsidy may still qualify for the 10% Temporary Wage Subsidy. We expect that the government will provide further guidance on the interaction of these two programs.
We have summarized the COVID-19 assistance available for Alberta small businesses which include:
- Temporary Wage Subsidy (10%)
- Canada Emergency Wage Subsidy (75%)
- Tax filing and payment deadline deferral
- Property tax and utilities deferral
- WCB premium deferral
- Financial institution assistance
- Assistance for your employees
More details about these measures can be found at this link.
Your KMSS advisory team is here to assist you and your business through this evolving pandemic. Please note that our office is primarily working remotely and we encourage clients to send us their tax and other financial information electronically. Although our office doors are locked, if you are healthy and would prefer to drop off the information or send it to us by courier, we continue to accept deliveries and couriers on business days between the hours of 9:00am and 4:00pm.