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A Further Update on COVID-19 – The Federal Government Announces Plans to Reduce Revenue Loss Restrictions for CEWS Eligibility

July 22, 2020
by Israel Foulon LLP


Since our July 14, 2020 E-Bulletin, the federal government has announced proposed changes to the Canadian Emergency Wage Subsidy (CEWS) to continue to support businesses during the COVID-19 recovery.

On Monday July 20, 2020 the provincial government announced that public health officials have authorized additional regions to enter Stage Three of the Province’s plan to gradually reopen the economy.

Proposed Changes to the CEWS

The CEWS currently provides eligible employers (those who have suffered a 30% decline in revenue) a subsidy of 75% of employee wages up to a maximum of $847 per employee per week. The program encourages businesses to keep employees on payroll and to facilitate a return to work from layoff. Since the program launched, 3,000,000 employees have had their employment supported by the subsidy.

On Friday, July 17, 2020, Finance Minister Bill Morneau outlined proposed changes to the CEWS, which are expected to pass. The changes would:

  • Allow the extension of the CEWS until December 19, 2020, including redesigned program details until November 21, 2020.
  • Make the subsidy accessible to a broader range of employers by including employers with a revenue decline of less than 30 percent and providing a gradually decreasing base subsidy to all qualifying employers. This would help many struggling employers with less than a 30-per-cent revenue loss get support to keep and bring back workers, while also ensuring those who have previously benefited could still qualify, even if their revenues recover and no longer meet the 30 percent revenue decline threshold.
  • Introduce a top-up subsidy of up to an additional 25 percent for employers that have been most adversely affected by the pandemic. Businesses that see a 50 per cent or more loss in revenue, would receive up to an 85 per cent wage subsidy, equal to a maximum of $960 per employee per week.
  • Provide certainty to employers that have already made business decisions for July and August by ensuring they would not receive a subsidy rate lower than they would have had under the previous rules.
  • The proposed changes would be effective July 5, 2020 (for the fifth claim period).
  • No employer currently receiving the wage subsidy will see any reduction until after August 2020.

What do the Proposed Changes Mean for Employers?

The proposed changes attempt to address the Canadian Emergency Response Benefit (CERB) gap, as employees begin to max out their eligibility for CERB.  The new CEWS regime is designed to encourage employers to rehire employees by providing greater economic certainty for employers. Additionally, decoupling continued eligibility for CEWS from the 30% revenue loss threshold, addresses businesses’ concerns that economic recovery is unlikely to result in static and consistent revenue growth.

The Department of Finance’s full press release can be accessed HERE.

Additional Public Health Regions Permitted to Enter Stage Three

 On July 20, 2020, the Government of Ontario announced that public health officials have authorized additional regions to enter Stage Three of the Province’s plan to gradually reopen the economy.

As of Friday, July 24, 2020, at 12:01 a.m., the following regions can begin reopening according to the public health guidelines outlined for Stage Three:

  • Durham Region Health Department;
  • Haldimand-Norfolk Health Unit;
  • Halton Region Health Department;
  • Hamilton Public Health Services;
  • Lambton Health Unit;
  • Niagara Region Public Health Department; and
  • York Region Public Health Services.

Israel Foulon’s full break down of Stage Three can be accessed HERE.

Regions not Permitted to Enter Stage Three

The following regions are not permitted to enter Stage Three until they are advised by public health that it is safe to do so:

  • Peel Public Health;
  • Toronto Public Health; and
  • Windsor-Essex County Health Unit

The Ontario Newsroom press release can be accessed HERE.

Best Practices for Reopening your Business

Employers have an obligation under the Occupational Health and Safety Act (OHSA) to provide a safe work environment. To minimize the risk of infection and meet their requirements under the OHSA, employers must implement a detailed COVID-19 Response Plan that:

  • Clearly communicates health and safety measures to employees;
  • Educates employees on effective strategies to prevent the spread of the virus;
  • Provides information on how the employer is taking steps to protect employees;
  • Lists what steps an employee should take if they develop COVID-related symptoms; and
  • Outlines how the workplace will respond to a confirmed COVID-19 diagnosis.

You Can access the Ministry of Labour’s COVID-19 Response Plan Template HERE.

Please feel free to contact Israel Foulon LLP for assistance with drafting and implementing COVID-19 Response Plans.

Sector Specific Health and Safety Guidelines

  • The Ministry of Labour has partnered with Ontario’s Health and Safety associations to develop sector-specific health and safety guidelines to help businesses safely reopen.
  • The full database can be accessed HERE.

Businesses That are Unable to Meet Health and Safety Requirements

  • Businesses that are not permitted to reopen during Stage Three or who are experiencing significant difficulty reopening amid social distancing requirements may submit a reopening plan to the Ministy of Finance.
  • You can access the application for reopening plans HERE.

Workplace PPE Supplier Directory

  • The Ontario Government has provided an up to date list of companies and associations that are ready to supply businesses with Personal Protective Equipment (PPE).The list may be accessed HERE.

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

Israel Foulon’s Response to COVID-19 Israel Foulon is assessing the situation as it evolves, and is taking all necessary precautions within its workplace. To slow the spread of COVID-19 and for the health of our team and clients, absent extraordinary circumstances we are working remotely until further notice whenever possible. However, please be aware that our offices remain open and are fully functioning. In the circumstances, we encourage our clients to contact us by phone and email to the extent possible. Voicemail messages left at our office phone numbers are immediately forwarded via email. All messages will be promptly responded to. We remain steadfast in our commitment to our clients and would be more than happy to assist you with concerns regarding COVID-19 or any other employment or labour matters.

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.