CEWS - CERS Update
The government recently passed into law some changes to the Canada Emergency Wage Subsidy (“CEWS”) including:
• Extending the CEWS program to June 2021.
• Providing a maximum subsidy for period 8-10 (October to December) of 65% of wages paid up to $1,129 per employee per week (40% base subsidy + 25% top-up subsidy). Details for Period 11 – 17 (January to June 2021) have not been released.
• The calculation of revenue decline for purposes of the top-up subsidy has been changed and will be calculated based on the current or prior month revenue decline. For period 8-10 there is a safe harbor rule to ensure the subsidy calculated is the greater of the amount determined under the new revenue decline rules and the amount determined under the prior revenue decline rules that were based on the prior 3 month average revenue decline.
• Deadline for CEWS applications is the later of 180 days after the qualifying period end and January 31, 2021. This means that period 1-5 are due on January 31, 2021 and that there will be a deadline each month thereafter for the CEWS period ending 180 days prior until the CEWS program ends.
• Adding the ability to amend and revoke elections.
• The wage subsidy for furloughed employees would be adjusted to align with the benefits provided through Employment Insurance (EI) to ensure equitable treatment of employees on furlough between both programs for period 9 and 10.
• Special baseline remuneration period for employees returning from leave.
• More information on these changes can be found here - https://www.canada.ca/en/department-finance/news/2020/11/details-on-the-canada-emergency-wage-subsidy-extension.html
The government also introduced the new Canada Emergency Rent Subsidy (“CERS”) including:
• New subsidy that provides rent and mortgage support from September 27, 2020 to June 2021.
• The rent subsidy would be provided directly to tenants, while also providing support to property owners.
• The new rent subsidy would support businesses, charities, and non-profits that have suffered a revenue drop, by subsidizing a percentage of their eligible expenses, on a sliding scale, up to a maximum of 65 per cent of eligible expenses until December 19, 2020. The revenue decline is generally calculated in the manner it is calculated under the CEWS program.
• No details on how to apply have presently been released but applications are expected to open November 23. For more details on this program please visit - https://www.canada.ca/en/department-finance/news/2020/11/canada-emergency-rent-subsidy.html
• A top-up Canada Emergency Rent Subsidy of 25 per cent for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65 per cent subsidy. More details on this program top-up subsidy can be found here https://www.canada.ca/en/department-finance/news/2020/11/lockdown-support-for-businesses-facing-significant-public-health-restrictions.html
The government also proposed to change the Canada Emergency Business Account (“CEBA”) as follows:
• An additional interest-free loan of up to $20,000 will be available (in addition to the original CEBA loan of $40,000). Half of this additional financing would be forgivable if repaid by December 31, 2022.
• The application deadline for CEBA is being extended to December 31, 2020.
• Further details of the expanded program, including the launch date and application process will be announced soon. An attestation of the impact of COVID-19 on the business will be required to access the additional financing.
• Allow businesses operated through a personal bank account to be eligible to qualify for the CEBA as long as they set up a business bank account.
• More details, when available, can be found here - https://ceba-cuec.ca/
Other important changes since our last message
• If you were eligible for the 10% Temporary Wage Subsidy, you need to file form PD27, 10% Temporary Wage Subsidy Self-Identification Form for Employers. It is recommended that you file this form by the end of the year in order to avoid a discrepancy notice being issued by the CRA. More details can be found here - https://www.canada.ca/en/revenue-agency/services/subsidy/temporary-wage-subsidy/tws-reporting.html
• All employers are required to fill out enhanced T4 reporting this year to assist the government. More details can be found here - https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/support-employers-cra-covid-19.html
• Introduction of the Canada United Small Business Relief Fund which provides a grant of up to $5,000 to cover the costs of personal protective equipment, make physical modifications to businesses to meet local health and safety requirements, and enhance digital or e-commerce capabilities. More details can be found here - https://www.canada.ca/en/innovation-science-economic-development/news/2020/10/minister-ng-announces-support-for-small-businesses-through-the-canada-united-small-business-relief-fund.html
Please reach out to your Roth Mosey contact to determine how this new legislation will impact you and to assist in calculating the subsidy. We are here to help!