75% wage subsidy program update

MARCH 31, 2020

The details for the 75% wage subsidy program were expected today but have been delayed until tomorrow. We will be back to you once the details are provided. The key questions are how will the 30% decline be measured and will there be anything for companies with declines less than 30% (the arbitrary nature of the firm 30% measure must be giving the government pause as it considers lower margin businesses and charities)?

There is now clarity on how the government intends to pay the subsidy to employers: it will come through reduced withholdings remittances. For most of our clients, the tax component of the withholdings in a given pay period will be much less than the 75% rebate. The excess subsidy will come from future withholding remittances – so in other words, the companies receiving the subsidy need to plan in their cashflow for the delay in getting back the full 75%.

If your feeling a little overwhelmed with the number of announcements we have two suggestions:

  1. Review this website for complete list of programs that the government has introduced. It's an efficient resource to quickly get an overview: https://www.canada.ca/en/department-finance/economic-response-plan.html. There are separate tabs for individuals and corporations and its surprisingly user friendly.

  2. Email your RMT team with any questions – we can then direct the question to the right person on our team to help.