Every Friday, we publish a weekly update on COVID-19 and its effect on business. 

More Support Announced for Canadians Through the Safe Restart Agreement

The Federal government has revealed details about the Safe Restart Agreement, which includes an investment of more than $19 billion to help Canadians restart the economy and build resilience against potential future waves of COVID-19.

Per the Government of Canada’s website, details of the Safe Restart Agreement include:

  • New federal funding will address seven priority areas:
    • enhanced capacity for testing, contact tracing, and data management and information sharing to mitigate future outbreaks.
    • investments in health care to respond to the pandemic, including support for Canadians experiencing challenges with substance use, mental health, or homelessness.
    • support for vulnerable Canadians – including those in long-term care, home care, and palliative care – who are at risk of more severe cases of COVID-19.
    • funding to secure a reliable source of personal protective equipment, and to recover some of the costs from previous investments made by provincial and territorial governments.
    • support to ensure that safe and sufficient child care spaces are available to support parents’ gradual return to work.
    • joint funding with the provinces and territories to support municipalities on the front lines of restarting the economy, including by putting in place precautions for public spaces and essential services to reduce the spread of the virus, as well as a dedicated stream of funding for public transit.
    • a temporary income support program that will provide workers who do not have paid sick leave with access to 10 days of paid sick leave related to COVID-19.

For more information about the Government of Canada’s initiatives to assist Canadians, click here.

The Federal Government Proposes Changes to the Canadian Emergency Wage Subsidy (CEWS)

Fruitman Kates – Chartered Professional Accounting firm dedicated to serving individuals and privately owned businesses – recently summarized upcoming changes to the Canadian Emergency Wage Subsidy (CEWS):

On July 17, 2020, the Federal government proposed significant changes to the Canadian Emergency Wage Subsidy (CEWS), including extending the CEWS until at least November 21, 2020. Draft legislation was released and if passed, these new rules will come into effect for the periods noted below.

Beginning July 5, 2020, the 30% revenue decline criteria will be eliminated and the CEWS will be available to any eligible employer that has experienced a revenue decline.  The amount of the CEWS will vary depending on the amount of an eligible employer’s revenue decline.  There is a special rule for periods 5 and 6 that allow employers who would be better off under the old CEWS rule, to use the old CEWS rules for these 2 periods only.

The CEWS will now have two components:

  1. The base subsidy will be available to all eligible employers who have a revenue decline based on the percent of their revenue decline; and
  2. A top-up subsidy will be available for eligible employers who have experienced more than a 50% revenue decline.

Base Subsidy

The base CEWS is calculated on the remuneration of up to $1,129 per week and the percentage of the CEWS will be based on the amount of an eligible employer’s revenue decline for either the current or previous month (whichever is greater) compared to the same month in 2019 (or the average of January and February 2020 revenue if that method is chosen) as outlined in the below chart:

* Employers that have experienced a revenue decline of 30% or more and that are better off under the old CEWS rules can claim the 75% CEWS for periods 5 and 6 (i.e. still claim CEWS under the old rules for those periods).  

Top-up Subsidy

The maximum top-up subsidy is 25% and will be available to eligible employers who have a three-month average revenue decline of 70% or more compared to the same 3 month average for the same months in 2019 (or the average of January and February 2020 if that is the method chosen).  The top-up subsidy is only available to employers that have experienced more than a 50% decline in revenue for the relevant period as summarized in the below chart:

Other Changes

  • Eligible remuneration – Will no longer be based on baseline remuneration except for non-arms length employees.  Non-arms length employees can use periods in 2019 to determine their base line remuneration if the eligible employer elect to do so.
  • Eligible employees – Beginning in period 5, employees without remuneration in respect of 14 or more consecutive days are considered to be eligible employees.
  • Furloughed Employees – Beginning in period 7, CEWS support for furloughed employees will be adjusted to align with the benefits provided under Employment Insurance and / or the Canada Emergency Response Benefit (CERB).
  • Revenue decline –Employers who elected to use the average of their January and February revenue for purposes of determining their revenue decline can re-elect to use this method for periods 5 onwards or change to use the revenue for the same month in 2019 to determine their revenue decline.  Conversely, employers that used the month in 2019 to determine their revenue decline can continue to use this method or elect to use the average of their January and February 2020 revenue to determine their revenue decline for periods 5 onwards.
  • Filing due date – The filing due date for all CEWS claims is January 31, 2021

Remember…

While the coronavirus continues to spread quickly, it is important to remember that only a small percentage of patients need special treatment to recover. Trusted health experts continue to emphasize that the general population shouldn’t panic and should instead focus on practicing proper hygiene, such as hand-washing and refraining from touching the facial area.

Stay up to date on the coronavirus disease (COVID-19) by visiting the World Health Organization and the Government of Canada website.

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