As of March 30, 2020, businesses and organizations in the City of Kawartha Lakes who suffer a loss of not less than thirty per cent of revenue related to, or arising from, COVID-19, are now eligible for a wage subsidy of up to seventy-five per cent of each employee’s wages.
This program is called the “Canada Emergency Wage Subsidy” (the “Program”).
According to the federal Government’s announcements for the Program:
[1] it will provide a subsidy of up to seventy-five per cent of an employee’s wages (up from ten per cent, previously announced);
[2] it will apply to and extend to charities, non-profit organizations and both “large and small” businesses (before this, the only business corporations eligible were Canadian-controlled, private corporations that qualify for the small business deduction);
[3] it will benefit employers that have experienced a revenue decrease of at least thirty per cent due to, or arising from, COVID-19;
[4] apply to the first $58,700 earned per employee, being equivalent to up to $847 per week per employee (there is no longer any cap at the lesser of $1,375 per employee and $25,000 per employer); and
[5] be retroactive to March 15, 2020.
It is anticipated that the wage subsidiary will be available to businesses and organization by allowing an eligible employer to reduce the amount the employer would otherwise have to remit to the Canada Revenue Agency for payroll withholdings. In other words, it is an indirect wage subsidy, rather than a direct payment from the federal Government, at least for now.
Legislation will also have to be enacted by the federal Government to solidify the Program, which hopefully will be tabled and passed promptly. It will need to be retroactive, too.
The Program, as it currently stands, does not mean that employers pay employees only the seventy-five per cent the covered by the Program.
Rather, employers may only claim a credit for seventy-five per cent of what they actually pay their employees.
Claiming a tax credit under false pretences is an offence under the federal Income Tax Act.
The Program may continue to change and evolve as the pandemic continues.
