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Canada Emergency Wage Subsidy (“CEWS”) Update

April 22, 2020
by Israel Foulon LLP


Since our April 16, 2020 E-Bulletin, the federal government has provided key details relating to the Canada Emergency Wage Subsidy (“CEWS”):

  • The application for the CEWS will be available online starting Monday, April 27, 2020. All applications submitted between April 27 and May 3 will be checked using an automated verification process all at once on May 4, 2020. There will not be staggered dates based on birth months as with the Canada Emergency Response Benefit (“CERB”). Payments will begin to be issued on May 5, 2020 for all approved applications. Treasury Board President Jean-Yves Duclos has said that he expects 90 per cent of CEWS applications to be processed by May 5, 2020.

    • There will be a manual verification process to check claims from larger tax filers or if there is a discrepancy in submitted information. The CRA is also assigning 3,000 auditors for manual verification and 2,000 staff to answer phone lines.

    • The government has launched a CEWS calculator that will allow eligible business to calculate how much they would receive through the program. The calculator will ask businesses to fill out information about the number of eligible employees, gross payroll, etc. According to the government, businesses that have this information ahead of Monday should be able to fill out the application in “no more than five minutes.” The calculator can be accessed by clicking HERE.

    • Importantly, it appears that employees who have been laid off or furloughed may be eligible retroactively, as long as they are rehired and their retroactive pay and status meet the eligibility criteria for the claim period. These employees must be rehired and paid before being included in the calculation for the subsidy. Such individuals may be required to pay back some or all of their CERB benefit. Further information may be accessed by reviewing the section entitled “Retroactively hiring and paying employees” available HERE.

    • Businesses who artificially reduce their revenue for the purpose of claiming the wage subsidy will be required to repay any subsidy amounts received plus a penalty equal to 25% of the total value.

    • For more detailed information regarding all aspects of the CEWS, please access the following link: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency- wage-subsidy.html

Given the exceptional and unprecedented situation, we expect further developments in the coming days.

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Legal Disclaimer

This article is for informational purposes only and is not intended to provide legal advice, which in all circumstances must be tailored to the specific facts of any problem. You should obtain a proper legal consultation in order to determine how this article applies to your specific situation. Please feel free to contact Israel Foulon LLP to learn more at 416-640-1550.