The Canada Emergency Wage Subsidy

Things to note

The "wage subsidy" legislation is better understood as a "wage-determined subsidy" for business rather than a direct wage subsidy to workers. The subsidy simply supports businesses who choose to employ workers during this time with a subsidy of 75% of pay. It does not over-ride any other legislation when it comes to protections of workers.

  • The Collective Agreement applies
  • Dues are still collected.
  • There is nothing about the wage subsidy that allows the employer to reduce benefits or pension contributions unilaterally for workers who are employed.
  • Employment standards acts, labour relations acts, collective agreements, LOUs, and MOAs are intact.

If the terms of employment need to change, then the employer must negotiate an LOU with the union and the union must agree in writing to any changes to standards set in signed CA/LOUs.

Eligible Employers

  • individuals
  • taxable corporations
  • and partnerships consisting of eligible employers
  • non‑profit organizations
  • registered charities

This subsidy would be available to eligible employers that see a drop of at least 30 per cent of their revenue and/or 15% of revenue in March. In applying for the subsidy, employers would be required to attest to the decline in revenue.

  • The 10% per-employee subsidy for small employers who do not meet the 30% reduction in revenue still exits.

Ineligible Employers

Public bodies would not be eligible for this subsidy including:

  • municipalities
  • local governments
  • Crown corporations
  • public universities
  • colleges
  • schools
  • hospitals

Amount

The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:

  • 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week;
  • the amount of remuneration paid, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration, whichever is less.

Applying

Employers can apply for the benefit through

  • Canada Revenue Agency’s My Business Account portal
  • a web-based application.

Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees.

Interacting with the Canadian Emergency Response Benefit

An employer would not be eligible to claim the Canada Emergency Wage Subsidy for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit.

Employers who are not eligible for the Canada Emergency Wage Subsidy would still be able to furlough employees, and those employee will receive up to $2,000 a month through the CERB.