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Support for Businesses - Avoiding Layoffs and Rehiring Employees

The Government of Canada is implementing economic relief programs dedicated to helping employers reduce the burden of the cost of retaining employees and to help employees receive income during COVID-19. These measures include a 75% wage subsidy, a 10% temporary wage subsidy and the extension of a work-sharing program. The following provides a brief summary of these government programs, including details relating to eligibility, how to apply and general terms and conditions, as applicable. We will endeavour to update this page on a daily basis. However, for a complete and up to date description, please see the link to the applicable program webpage contained herein. Should you have any questions, please feel free to reach out to a Goodmans lawyer. Programs include:



Canada Emergency Wage Subsidy
"CEWS".

Program Overview

An eligible employer can claim the CEWS in respect of eligible remuneration paid to an eligible employee between March 15 and August 29, 2020.

The CEWS is comprised of the following two components:

  1. Wage Subsidy
    • An eligible employer may claim under the CEWS in respect of eligible remuneration paid to an eligible employee the greater of:
      • 75% of the amount of remuneration paid to an employee, up to a maximum benefit of $847 per week; and
      • The amount of remuneration paid up to a maximum benefit of $847 per week or 75% of the employee’s pre-crisis weekly remuneration, whichever is less.
  2. Refund on Employer-Paid Contributions
    • Eligible employers will be also be able to claim a 100% refund for certain employer-paid contributions, including: payments to Employment Insurance (“EI”), the Canada Pension Plan (“CPP”), the Quebec Pension Plan, and the Quebec Parental Insurance Plan)

Eligibility

  • To be eligible to receive the CEWS, an employer must:
    • be an eligible employer
    • have a Canada Revenue Agency (“CRA”) Payroll account on March 15, 2020; and
    • have experienced a reduction in qualifying revenues of at least 15% in in March 2020 and 30% in April and May 2020.
  • More information on eligibility criteria can be found here.

Note: emergency government assistance, including assistance from provinces and municipalities directly related to COVID-19, will not be included as an employer's "qualifying revenues" as long as it is:

  1. not expected to occur regularly or frequently within several years
  2. not typical of the normal activities or risks inherent in the normal operations of the entity, and
  3. primarily out of the control of owners or management.

How to Apply

The CEWS program is open for applications. To apply for the CEWS, employers should submit an application through their CRA “My Business Account” portal, or if a representative is completing an application on their behalf, the representative should complete an application through the CRA “Represent a Client” portal. If neither of the above are an option, the employer should complete the CRA Web Form application.



Temporary 10% Wage Subsidy

Program Overview

The 10% Temporary Wage Subsidy for Employers is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the CRA.

The subsidy is equal to 10% of remuneration an employer pays to an employee from March 18, 2020 to June 19, 2020, up to a maximum of $1,375 for each employee and $25,000 per employer.

Note:  An employer that is ineligible to receive the CEWS may be eligible for the Temporary 10% Wage Subsidy. For employers that are eligible for both the CEWS and the Temporary 10% Wage Subsidy for any given period, any benefit from the Temporary 10% Wage Subsidy for remuneration paid in a specific period will generally reduce the amount available to be claimed under the CEWS in that same period.

Eligibility

Employers are eligible to receive the temporary wage subsidy if:

  • they are an eligible entity;
  • have an existing business number and payroll program account with the CRA in existence on and since March 18, 2020; and
  • pay salary wages, bonuses, or other remuneration to an eligible employee.

How to Apply

  • Employers do not need to apply for the 10% Temporary Wage Subsidy.
  • Instead, employers should calculate the amount of subsidy they are eligible for and reduce their payroll remittance of federal, provincial, or territorial income tax sent to the CRA accordingly.

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Work-Sharing Program

Program Overview

The Work-Sharing program is a three-party agreement involving employers, employees and Service Canada, whereby the employee agrees to a reduced work schedule over a specified period of time (up to 76 weeks) due to a temporary reduction in the normal level of business activity that is beyond the control of the employer and Service Canada then provides supplemental income support to employees who are subject to the reduced work schedule.

In response to COVID-19, the federal government has introduced temporary special measures to the Work-Sharing program to support employers and employees affected by COVID-19 by expanding the eligibility criteria and extending the maximum permissible duration of a work-sharing program.

Eligibility

To be eligible for the Work-Sharing program under the temporary special measures, an employer must:

  • Have a business in Canada year-round for at least one year;
  • Be a private business, a publicly held company, Government Business Enterprise or a not-for-profit employer;
  • Demonstrate the shortage of work is temporary and beyond their control, and is a not cyclical/recurring slowdown;
  • Demonstrate a recent decrease in business activity of approximately 10% and
  • Submit and implement a recovery plan designed to return the Work-Sharing units to normal working hours by the end of the Work-Sharing agreement.

In addition, to be eligible for a Work-Sharing agreement, an employer’s employees must:

  • be year-round, permanent, full-time or part-time employees needed to carry out the day-to-day functions of the business  or employees considered essential to the recovery and viability of the business;
  • be eligible to receive EI benefits, and
  • agree to reduce their normal working hours by the same percentage and to share the available work.

How to Apply

Details regarding the application process can be found here.

Note: A formal application for the Work-Sharing program must be received by Service Canada at least 30 days in advance of the requested start date of the agreement. Therefore, the application will take one month before an employer can access the program.

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