COVID-19 has created difficulties for Canadian individuals and businesses. So, to help businesses, the federal government created the Canada Emergency Wage Subsidy. Otherwise, people refer to it as CEWS, for short. Continue reading for the full background of the CEWS.
What is the CEWS?
The CEWS program is for eligible employers who have seen a decline in revenue during the COVID-19 pandemic. Overall, the subsidy covers part of employee wages. As a result, the program allows employers to keep employees and hire workers to help keep businesses and workers afloat. With this intention, the relief program only helped employers for up to 12 weeks when it came out. Furthermore, payments were retroactive from the start of the pandemic on March 15, 2020. Accordingly, the original subsidy rate was 75% of each eligible employee’s wages up to $847 per week. The program experienced numerous extensions since it was first announced. In any event, the Canada Emergency Wage Subsidy ends on October 23, 2021. However, the maximum subsidy rate is now 20%.
The Canada Revenue Agency (CRA) oversees the Canada Emergency Wage Subsidy program and has have created periods spanning four weeks. Correspondingly, eligible employers must apply each period for the program. Currently, there are 21 total periods of the CEWS payments dating back to the start of COVID-19. Application submissions for specific periods must be no later than 180 days after the end of the claim period. Of course, employers can apply through their CRA My Business Account.
Who can apply for CEWS?
Nearly every business is eligible to apply for the CEWS program. There are only three criteria to apply, listed below.
Is my business eligible?
If you answer yes to the three questions below, you are eligible to apply for CEWS.
- Did your business have a CRA payroll account on or before March 15, 2020? OR Did another person or partner pay employees on your behalf?
- Are you a sole proprietorship, corporation, non-profit, or registered charity?
- Did you experience a drop in revenue?
Almost any employee you pay qualifies for CEWS. However, they must have employment in Canada. In essence, employers pay their employees, after which time the CRA reimburses a portion of their pay. However, the amount each business gets for its employees depends on certain criteria. Some determining conditions depend on the following:
- Was the employee employed before the pandemic?
- Is the employee on a paid leave?
- How much did the employee work during the period?
- Is the employee an owner or family member?
Periods You Can Apply For Benefits
Below are the current claim periods still open for applications. At the bottom, you will find the application deadline.
|Feb 14 to March 13, 2021||March 14 to April 10, 2021||April 11 to May 8, 2021||May 9 to June 5, 2021||June 6 to July 3, 2021||July 4 to July 31, 2021||Aug 1 to Aug 28, 2021||August 29 to Sept 25, 2021||Sept 26 to Oct 23, 2021|
|September 9, 2021||October 7, 2021||November 4, 2021||December 2, 2021||December 30, 2021||January 27, 2022||February 24, 2022||March 24, 2022||April 21, 2022|
Each claim period of CEWS has a unique calculation method that determines how much the employer gets back. Conveniently, you can estimate your reimbursement amount by taking the CEWS rate for the period. Then, multiply it by the eligible employee wages to figure out how much your business can receive. But depending on how much revenue a business has lost, CEWS offers additional help. Check the government of Canada CEWS website for more details and a calculator.
If you are an eligible employer, you can apply for CEWS online. Application submissions go through the CRA My Business Account. Accordingly, the CRA processes applications within 7 to 10 business days. However, employers should confirm they can receive direct deposits from CRA to make the process smoother. Remember to reapply for CEWS at the end of every period. Applications will not be accepted later than 180 days after a period has ended.
Alternatives to CEWS
Banks have been offering other pandemic relief. For example, many laid-off employees have benefited from employment insurance. So, if you are not eligible for or want more options, here are two alternatives to the CEWS program.
Canada Recovery Hiring Program (CRHP)
This program grants employers up to 50% of employee wages. However, the hiring program has a maximum of $1,129 per week. The goal of the program is to help employers reopen and rehire. Besides, the CRHP offers clearer and more fixed subsidies. While the CEWS program offers top-ups to those businesses hardest hit with the loss of revenue.
Large Employer Emergency Financing Facility (LEEFF)
This is a federal loan program for companies with over 500 employees. The program helps companies stay in operation during the COVID-19 pandemic.
The Canadian government has stepped up and responded to the COVID-19 pandemic. It has been a difficult time for both Canadian businesses and individuals. Pull yourself, your company, and your employees through the rest of the pandemic. Take advantage of the government programs. If you find yourself in a rough financial situation, use our services. We are here to help navigate these difficult times.