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Canada Emergency Wage Subsidy


75% Wage Subsidy for Businesses

The government announced details for a 75% wage subsidy on April 1. The program will provide a 75% wage subsidy for businesses experiencing a revenue decrease of 30% or more compared to the same period last year (March, April, May). Any business that is not publicly funded can apply. Eligibility will not be tied to number of employees. Big corporations, SMEs, not-for-profit organizations and charities alike will all qualify for the subsidy.

The 10% subsidy already in place for small businesses will continue. Businesses already receiving the 10% subsidy can also apply to the 75% subsidy. If they are approved for the new subsidy, the 75% subsidy will be reduced by the 10% subsidy they are already receiving.

The government wants businesses to rehire employees now, and businesses will be reimbursed by the CRA later.

How to Apply

Business owners will be able to apply through a CRA portal that will be launching on April 27 2020.

An eligible employer’s entitlement to this wage subsidy will be based entirely on the salary or wages actually paid to employees.

What does it cover?

The subsidy itself will cover up to 75% of the first $58,700 of an employee’s annual salary, up to $847 per week (backdated to March 15, 2020) whether a business is currently open or not. Businesses in a position to top up the remaining 25% of the wage for employees are encouraged to do so. The program is intended to be in place for a 12-week period, from March 15 to June 6, 2020.

Additional Information

All employers would be expected to at least make best efforts to top up salaries to 100% of the maximum wages covered.

The federal government has stated that any abuse of the wage subsidy program will be severely penalized.

The government is still trying to determine what to do for businesses that cannot compare revenue to this period last year (e.g. Business that are less than a year old or were not generating revenues last spring).

This is the program will cost an estimated $71 billion.

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CLEMENT CHUNG, CFP, CLU

Certified Financial Planner

Fee-Based Financial Planning
Burnaby & Metro Vancouver

©2018 by Clement Chung.