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The Canada Emergency Wage Subsidy (CEWS)

By Debt.ca on November 12, 2021 No Comments
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Did your business experience a decline in revenue during the COVID-19 pandemic? Have you been forced to lay off employees? Is it something you may have to do?

Would you like to hire more workers? If so, the Canada Emergency Wage Subsidy (CEWS) may be for you.

What Is the CEWS?

CEWS is a federal government scheme designed for employers who lost revenue during the COVID-19 pandemic. If you’ve lost revenue, laid-off workers, or anticipate laying off workers, you may be eligible to receive a subsidy through CEWS.

What Are Some CEWS Changes? 

You may be wondering whether CEWS has changed and how that may affect you. In July 2021, the federal government extended the wage subsidy cut-off date to October 23, 2021. In addition, on October 21, 2021, the government announced legislation that may extend benefits until May 2022 for those businesses hit the hardest by the pandemic.

Who Can Apply for Canada Emergency Wage Subsidy?

You may also wonder if your business is eligible for CEWS. The requirements for employers are pretty straightforward. If you want to receive a CEWS wage subsidy under this scheme, you must meet ALL of these criteria:

  • You must have had a Canadian Revenue Agency (CRA) account as of March 15, 2020. However, if you did not have an account by then but had a third party administer it on your behalf, you may still be eligible for the subsidy. Or, if you did not have an account but acquired all or almost all of the assets of another business, then you may still be eligible.
  • You need to be a particular TYPE of employer. That list is relatively long and is here for your reference. It includes individuals, corporations, a variety of tax-exempt organizations, and charities, among others.
  • You must have lost revenue during specific periods.
  • For periods 18 and 19 (claims between July 4 and August 28, 2021), you need to have more than 10 percent revenue drops.
  • For periods 5 to 17 (claims between July 5, 2020, and July 3, 2021), you do not need to have a minimum revenue drop to qualify.
  • For periods 1 to 4 (claims between March 15, 2020, and July 4, 2020), “you must show that your eligible revenue dropped by a minimum amount to qualify for the subsidy.”

Which of My Employees Qualify? 

Once you’ve determined whether or not your business is eligible to apply for Canada Emergency Wage Subsidy, you may also wonder which of your employees qualify for the subsidy. Again, it depends on which claim periods concern you. Still, the basic idea is that an eligible employee is someone who you’ve employed mostly in Canada throughout the claim period in question. More specifically:

  • An employee is not eligible during periods one through four (March 15, 2020, and July 4, 2020) if that employee had 14 or more consecutive unpaid days during that period.
  • However, if an employee had 14 or more consecutive unpaid days during claim period five or later, that employee is eligible for the subsidy.
  • Laid-off employees can become retroactively eligible as long as you rehire them and pay them.

Periods You Can Apply For

How do claim periods work for employers?

Each claim period lasts for four weeks and begins on a Sunday. You must confirm your eligibility every period since the subsidy will not renew on its own.

The most recent claim period, for example, was September 26 to October 23, 2021, and the deadline to apply for that claim period is April 21, 2022. This means that if you satisfy all the requirements mentioned above (revenue loss, layoffs, eligible employees) for that September 26 to October 23 period, you have until April 21, 2022, to apply and confirm eligibility to receive that subsidy.

Right now, periods 16 to 21 (May 9, 2021, to October 23, 2021) are open for application, but periods 1 to 15 (March 15, 2020, to May 8, 2021) are closed.

At the moment, there are no claim periods after that September to October period (period 21), but it’s worth checking back into this site to see if and when period 22 opens up.

Calculate Your Amount

If you want to know how much you will receive in the subsidy, use this site to make your calculations before applying for CEWS. You’ll use the calculator or downloadable spreadsheet to enter lost revenue and employee pay information. Be sure to save that information so that you’ll have it when you apply for the subsidy. There is a maximum subsidy, but it’s crucial to determine your eligible remuneration before you apply anyway.

How To Apply? 

Once you have done all of this, the only thing left to do is APPLY.

But before you do so, you’ll need to:

  • First, make sure the period for which you’re applying is open.
  • Complete the calculations and have them printed and handy.
  • Set up direct deposit.

After you’ve done all that, apply using My Business Account, Represent a Client, or the Web Forms application.

Alternatives to CEWS

The primary alternative to CEWS is the Canada Recovery Hiring Program (CRHP). For a complete comparison between CEWS and CRHP, visit this site. In many ways, eligibility is the same for both schemes.

However, there are some differences. For example, the subsidy rate for CEWS is variable depending on your revenue drop, while the subsidy rate for CRHP is fixed.

The Canada Recovery Benefit is also a federal government scheme designed specifically for workers negatively affected by the Covid-19 pandemic.

Conclusion

The Canada Emergency Wage Subsidy (CEWS) is a generous Canadian program designed to help those hit hard by the pandemic. Starting and running a business in normal times is tough, but doing so during a pandemic makes it more challenging.

Find out if you’re eligible, do your calculations, and apply as soon as you can!

Related to: The Canada Emergency Wage Subsidy

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