On the heels of the World Health Organization declaring the novel coronavirus a global pandemic on March 11, 2020, Canada’s federal government rolled out several programs to support employers and employees through this once-in-a-century crisis.
Almost three weeks after the pandemic declaration by the WHO the federal government introduced the Canada Emergency Wage Subsidy on March 30, 2020, and was initially only set to be in place retroactively from March 15 to June 6, 2020.
Originally, there were three four-week claims periods. The subsidy was intended to help employers that were experiencing reduced revenues keep employees on payroll in light of the difficulties caused by the coronavirus pandemic, bring employees laid off for pandemic-related reasons back to work, and/or resume normal operations, if feasible. The subsidy enabled eligible employers to make a claim for a subsidy amount in respect of “eligible remuneration” paid to “eligible employees,” as defined under the rules set out by the Feds.
Since its initial introduction, the program has undergone various amendments. This includes changes to its eligibility criteria and the applicable subsidy rates, including the introduction of a base and top-up subsidy rate along with different rates applicable to active employees and employees on “leave with pay.” Changes have also included extensions to its period of applicability. The program is administered by the Canada Revenue Agency, which has also published and updated a frequently asked questions guide for employers.
Most recently, on March 3, 2021, the federal government released a backgrounder confirming that the existing maximum level of subsidy available under the program (in place since claim period 11 — commencing December 20, 2020) would be extended for claim periods 14 to 16 (March 14, 2021, to June 5, 2021). During these periods, the maximum base rate in respect of active employees will remain at 40 per cent (applicable to employers experiencing revenue declines of at least 50 per cent) and the maximum top-up wage subsidy for employers experiencing a revenue decline of 70 per cent or greater will remain at 35 per cent (for a maximum combined rate of 75 per cent).
For employees on “leave with pay” (or inactive employees), the wage subsidy continues to be the lesser of (a) the amount of eligible remuneration paid in respect of the week and (b) the greater of $500 and 55 per cent of pre-crisis or “baseline” remuneration for the employee, up to a maximum subsidy amount of $595 (which is the maximum weekly employment insurance benefit available to claimants in 2021).
The deadline for applications in respect of Canada Emergency Wage Subsidy claims periods one through seven has now passed. The next deadline for applications in respect of subsidy claims period eight will be on April 22, 2021, with all subsequent deadlines falling 180 days after the end of the applicable claims period.
Rayaz Khan is a labour and employment lawyer with Hicks Morley Hamilton Stewart Storie LLP in Toronto. These are the views of the author and not necessarily those of Benefits Canada.