Employers can soon apply for reworked, sliding-scale wage subsidy
OTTAWA -- The first application period for the recently-broadened Canada Emergency Wage Subsidy program opens in a week, and the Canada Revenue Agency is encouraging employers to use their reworked online calculator to determine how much financial aid they’ll be eligible for going forward.
The program started as a 75 per cent employee wage subsidy for businesses that could demonstrate a 30 per cent drop in revenues due to the pandemic, though on July 17 Finance Minister Bill Morneau announced that the eligibility criteria was being expanded to cover portions of workers’ wages on a sliding scale that is proportional to the revenue hit at the business they work for.
For example, if an employer’s average revenue drop is 35 per cent, they could claim a 75 per cent wage subsidy, whereas if the revenue drop is just 10 per cent, the subsidy would be a 12 per cent wage top-up. The hardest-hit businesses could be eligible for up to 85 per cent, if they can demonstrate that severe of an income loss over the last few months.
The federal government is optimistic these changes will result in more businesses applying for the COVID-19 aid program.
The legislation to change the eligibility parameters passed July 27, and the upcoming application period will be the first time the broadened qualifications will be applicable.
After applications open on Aug. 17, employers can expect to receive their payment within three to five business days, according to the Canada Revenue Agency.
The online calculation tool allows business owners to plug in their information and receive an estimate of the subsidy level they’ll be eligible for, and is meant to help inform staffing decisions. The CRA is also holding information sessions with eligible employers and stakeholder groups, officials said during a technical briefing with reporters on Tuesday.
The $82.3-billion wage subsidy program is the heart of the Liberals' promise to help Canadians get back to work, even if has to be at a slower pace, as the pandemic continues. In the weeks ahead, the amounts some businesses will be eligible will decrease, in relation to their revenue levels.
The objective of the program is to keep employees on the payroll and allow businesses to rehire people as the economy continues to gradually reopen. The subsidy program initially had a slow uptake, but has increased in popularity as more Canadians have transitioned off of the soon-expiring Canada Emergency Response Benefit.
The program was first announced on March 27 and has been extended twice since. It is now set to be in place until December 19.
To date, 285,940 employers have accessed the federal aid program, seeing the government pay out $26.6 billion.
The majority of applicants have sought less than $100,000, though 1,870 employers have accessed between $1 million and $5 million in federal help, and another 210 companies have received more than $5 million.
The federal Liberal, Conservative, New Democratic and Green parties are also accessing the wage subsidy program to top-off their employees’ salaries as the pandemic has prompted a drop in political donations and cut off the typical fundraising avenues, such as in-person events.