Wage subsidy program

APRIL 9, 2020

The complexity of this program is causing the roll-out to be delayed as the government wrestles with the conflicting challenges of avoiding abuse while ensuring simplicity and timeliness!

Here is the new information that has been released:

  1. They are adding an element to encourage summer hires under the Canada Summer Jobs Program.  To access the program a company needs to make an application. Qualified employers can claim 100% of the wages for eligible summer students to a maximum of the minimum wage.
     

  2. The Canada Emergency Wage Subsidy (“CEWS”) monthly revenue test has been adjusted so that for the month of March revenue needs to decline by 15% rather than 30% in order to qualify. For April and May the rule will continue to be 30%.
     

  3. The government has introduced rules to allow more companies to qualify for the CEWS. Under the revised rules there are four ways to measure the decline and employers can select the one that works best – but once they choose they have to stick with the methodology for the entire 12 week period of the program. Schematically the program options can be illustrated as follows:

The new options are intended to help in specific circumstances but the wording in the Minister’s announcement indicates that regardless of the circumstance employers can select any of the 4 methods.   The new methods can help seasonal businesses, new businesses, rapidly growing companies and those that are struggling with cash collections in today’s cash tight environment.

4. The government has expanded the CEWS by introducing a 100% refund of employer contributions to CPP and EI in the rare circumstances where employees are being paid but are not working.  This refund will not be subject to any maximum benefit per employee. 

5. The definition of average weekly wage has now been clarified – it is the average weekly remuneration in the week between January 1 and March 15.

It’s a stressful time for those needing to make decisions now based on partial information – but the picture is starting to get clearer and more flexibility is being introduced. 

 Ontario credit for building additions

The Ontario government is providing a 10% credit for up to $500,000 in qualified expenditures – so a maximum credit of $50,000.  If you're looking at constructing, renovating or acquiring commercial or industrial buildings outside the GTA and Ottawa please let us know.  The credit only applies for rural areas in the Province.  The list of eligible regions is here: https://budget.ontario.ca/2020/marchupdate/annex.html#section-3