BY: CHRIS DRINOVZ

On July 17, 2020, the federal tabled Draft legislation for more changes to the Canada Emergency Wage Subsidy (“CEWS”) program. In essence, the changes would make the program more accessible to businesses, introduce a two-part new subsidy system, and extend the program until the end of the year. The amendments are scheduled for debate in Parliament on July 22 and we expect they will be put into effect soon after.

Proposed changes to CEWS include the following:

• Extension of the CEWS program until December 19, 2020;
• Removal of the threshold requirement of a 30% decrease in revenue currently required to receive CEWS benefits – thus making the subsidy available for businesses who have experienced losses less than 30%;
• Creation of a two-part benefit comprised of base subsidies and top-up subsidies;
• Determination of a gradually decreasing base subsidies for eligible businesses according to actual revenue lost;
• A new “top-up” wage subsidy of up to 25% for eligible businesses that have experienced at least a 50% decrease in revenue, and
• Expansion of the definition of “eligible entity” to receive CEWS benefits to include trusts, in addition to corporations and individuals.

Finance Canada has released the following news release and backgrounder which provide detailed information about the changes. The following chart provides guidance on the expected CEWS base subsidies: 

Note that some eligible employers may also be entitled to top-up subsidies in addition to the amounts outlined above. It should be noted that employers that have already made business decisions for July and August based on the previous CEWS rules will not receive a lower subsidy rate and can expect to transition to the new proposed subsidy rates in September.

As the new rules and eligibility criteria follow a complicated technical formula, we recommend that you obtain assistance from your legal and financial advisors. Stay tuned for further updates as the Bill passes through Parliament.

If you would like to discuss these changes or any other matter relating to the CEWS program and your workplace, please contact the Employment & Labour Group at KSW Lawyers.