As a follow up from our Newsletter dated April 3, 2020, the Canada Emergency Wage Subsidy (“CEWS”) legislation passed on April 11, 2020 and contains details on the Federal government’s 75% wage subsidy for qualifying businesses retroactive to March 15 until June 6, 2020. The legislation allows for a potential extension of the program until September 30, 2020.

Employers can apply through the CRA’s “My Business Account” portal and the online application process is expected to be open within 2 to 5 weeks.


Eligible employers include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities. Public bodies are not eligible.

In order to qualify, the business must have experienced a drop of at least 15% of their revenue in March 2020 and a 30% decrease in revenue in April 2020 and May 2020 due to the COVID-19 pandemic. Revenues will be calculated by determining the change in the employer’s monthly revenues, year-over-year, for the calendar month in which the period began. While the legislation deals with computation of qualifying revenue, it includes different formulas for different types of businesses. Employers should be clear on whether or not their business qualifies before making any business decisions based on the expectation they are eligible.

Eligible employees are those employed in Canada by an eligible employer in the qualifying periods:

  1. the period that begins on March 15, 2020 and ends on April 11, 2020;
  2. the period that begins on April 12, 2020 and ends on May 9, 2020;
  3. the period that begins on May 10, 2020 and ends on June 6, 2020; or
  4. a prescribed period that ends no later than September 30, 2020.

Subsidy Amount

The maximum subsidy amount per employee is $847 per week and there is no maximum number of eligible employees per employer.

The amount of the subsidy per employee depends on the employee’s circumstances:

  1. New employees
    • These employees will receive the lesser of 75% of wages paid during the program and $847.
  2. Non-Arm’s Length Employee
    • This kind of employee only qualifies if they were employed prior to March 15, 2020 and the amount of the subsidy is the lesser of 75% of the pre-crisis remuneration and $847 per week.
  3. Existing Employees
    • The amount for an existing employee on eligible remuneration paid for the period between March 15, 2020 and June 6, 2020 is to the lesser of either 75% of the remuneration paid to the employee or 75% of the employee’s pre-crisis weekly remuneration. If the employee is paid less than 75% of their pre-crisis wages, the subsidy will be capped off at the greater of the actual wages paid and $847 per week.

Additional Refund

An additional 100% refund is available for employer paid contributions to CPP, EI, QPP and Quebec Parental Insurance Plan for CEWS eligible employees on leave with pay and not working. This refund is not included in the $847 maximum CEWS amount and employers are required to continue to collect and remit employer and employee contributions to each program.

Interaction Between CEWS and Other Government Programs

Employers can be eligible for both the CEWS and the previously announced temporary 10% wage subsidy. If eligible for both, any benefit from the 10% wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the CEWS in that same period.

With respect to the Federal Work Sharing program, EI benefits received by employees through the that program will reduce the benefit that the employer is entitled to receive under the CEWS.

Additional Information

There is an anti-avoidance rule to prevent employers from increasing an amount they pay an employee primarily to increase the subsidy amount they receive for that employee. In addition, there are offences (including fines and imprisonment) for any employee, employer or business who provides false or misleading information to obtain access to this benefit and who will misuse the funds obtained.

The legislation is available here and should be referenced in addressing any specific questions including calculating the required revenue reduction.