Canada Emergency Wage Subsidy Details Released
April 1, 2020 – Read the full Press Release Here
This afternoon, Finance Minister Bill Morneau, along with his colleagues the Minister of Small Business, Export Promotion and International Trade Mary Ng and Minister of Innovation, Science and Industry Navdeep Bains, outlined further details on the newly enhanced Canada Emergency Wage Subsidy Program. The initial announcement of the program was made by the Prime Minister on Monday.
Eligibility details announced today included:
•Eligible employers who suffer a drop in gross revenues of at least 30 per cent in March, April or May, when compared to the same month in 2019, would be able to access the subsidy.
•Eligible employers would include employers of all sizes and across all sectors of the economy, with the exception of public sector entities.
•For non-profit organizations and registered charities similarly affected by a loss of revenue, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their circumstances. The government is also considering additional support for non-profits and charities, particularly those involved in the front line response to COVID-19. Further details will be announced in the near term.
•An eligible employer’s entitlement to this wage subsidy will be based entirely on the salary or wages actually paid to employees. All employers would be expected to at least make best efforts to top up salaries to 100% of the maximum wages covered.
•Will apply at rate of 75 per cent of the first $58,700 normally earned by employees – representing a benefit of up to $847 per week. The program will be in place for a 12-week period, from March 15 to June 6, 2020.
•Businesses can apply online for the subsidy program through a CRA portal that will be made available soon (approximately three weeks), with money flowing in approximately six weeks.
•Anyone who chooses to use this money for fraudulent purposes will be subject to severe penalties/sanctions.
•Those organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 10 per cent of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
•Total cost of the subsidy program will be $71-billion dollars and will help reduce the cost of the Emergency Response Benefit to $24 billion.
In his comments after the announcement, Minister Morneau recognized that there would be businesses that may not be able to demonstrate a 30 per cent drop in revenues from the same time last year (i.e. a start-up business that has just begun making revenue). To that end, he noted that the government is first trying to get the administrative details out for the large majority of businesses across Canada; however, for those that cannot demonstrate that year-over-year revenue drop because of particular situations, they are still working on those details and solutions, which will be released in the near term.
For more information, please see the news release here.
Canada Emergency Response Benefit – Update
Additional details were also provided around the Canada Emergency Response Benefit this morning by Prime Minister Trudeau, namely that the benefit will officially be available as of April 6th at Canada.ca/coronavirus.
A reminder, the CERB will support Canadians who have lost their income because of COVID-19 by providing $2,000 a month for up to 4 months. All eligible workers, whether or not they are eligible for Employment Insurance, will apply through a simplified application process. There is no waiting period and direct deposit payments will be delivered into accounts within three business days of applicants being eligible to receive it, and cheques within 10 days.
For more information, please see the news release here.
What to Expect Next
Parliament to be Recalled, Again
The Parliament of Canada will have to be recalled once again to pass legislation for the newly expanded measures as part of the enhanced wage subsidy program. While a specific date has not been provided, senior government officials have indicated that it will likely happen early next week.
There were conflicting views on whether Parliament would have to be recalled in the first place; however, the Conservatives were quick to jump on the government by emphasizing that the new subsidy program did not match the legislation they passed as part of the initial $82-billion recovery package last week.
Expect the same process to unfold as last week: 32 members of parliament from close Ottawa-riding areas will attend along with opposition party leaders. There is perhaps the chance that the Prime Minister himself will make an appearance should public health officials give him the all clear.
Sector Relief Coming
As has been the topic of some conversation for well over a week now, every expectation remains that the government is working on, and will soon be delivering upon, tailored aid packages for the energy sector, tourism and airline industry, and likely the infrastructure sector as well. A reminder that the latter was a large focus of the Harper government’s stimulus plan after the 2008 recession.
The oil and gas package is expected to be released first, with Finance Minister Bill Morneau saying just last week that they were only days away. There have been growing calls for details on the relief package from the sector over the last number of days, with government indicating they wanted to ensure they had the Emergency Wage Subsidy program and Canada Emergency Response Benefit in place before releasing sector-specific relief.
Federal Essential Services and Functions
As provinces and territories across the country continue to release their lists of essential services during the COVID-19 pandemic, all expectations are that the federal government will soon release its own essential services list. It is anticipated that the guidance document will closely align with what the provinces have already released and draw from the 10 critical infrastructure sectors outlined by Public Safety Canada and: Energy and Utilities, Information and Communication Technologies, Finance, Health, Food, Water, Transportation, Safety, Government and Manufacturing.
Our understanding is that this list would be released as guidance for now, on the assumption the federal government does not need to trigger the federal Emergencies Act somewhere down the line.
To read the full release, please click here.