NEW CHANGES TO THE WAGE SUBSIDY – 30% RULE GONE – NEW SLIDING SCALE APPLIES – TOO LITTLE, TOO LATE FOR OUR CKL BUSINESSES?
The requirements for the Canadian Emergency Wage Subsidy have been loosened for employers in the CKL.
They no longer need to prove a 30% or greater revenue setback or reduction to qualify for the CEWS. We are now in period 5 of the CEWS.
Rather, a new sliding scale approach will prevail.
What you need to know:
- the CEWS program is extended to December 19, 2020;
- it is now available to any qualifying employer that experiences any level of reduction in revenue (not only a 30% reduction); ;
- employers are eligible for a base subsidy amount proportional (or of equal value) to their revenue decline, up to the maximum subsidy rate;
- the maximum base subsidy rate is reduced from 75% to 60% for periods 5 and 6 and will continue to decrease gradually to 20% by period 9 (note: this is period 5);
- however, employers that qualified for the 75% subsidy under the current/existing program rules will remain entitled to that higher rate for periods 5 and 6, respectively;
- employers experiencing a reduction of more than 50% in their three-month, rolling average of revenue are entitled to an additional CEWS “top-up” rate of up to 25%;
- employers may reelect between the year-over-year and alternative revenue drop methods.
More details are promised.Regrettably they are scant at this time.
These changes are expected to co-ordinate upcoming announcement to phase out the Canada Emergency Response Benefit, shifting the focus more on subsidizing employers to re-start or continue employ, rather than individuals, some of whom may prefer to remain on the CERB rather than return to work.
July 19th, 2020
Posted in COVID-19