[{"label":"Home","url":"https:\/\/www.pbo-dpb.ca\/en"},{"label":"Publications","url":"https:\/\/www.pbo-dpb.ca\/en\/publications"},{"label":"Canada Emergency Wage Subsidy (CEWS) \u2013 40-week program","url":"https:\/\/www.pbo-dpb.ca\/en\/publications\/LEG-2021-035-S--canada-emergency-wage-subsidy-cews-40-week-program--subvention-salariale-urgence-canada-ssuc-programme-40-semaines"}]

Canada Emergency Wage Subsidy (CEWS) – 40-week program

Published on August 13, 2020 PDF(opens a new window)

Introducing a wage subsidy for employers with reduced revenues. The subsidy is available for wages paid in ten 4-week periods from 15 March 2020 to 19 December 2020. The parameters for the tenth period have not yet been announced but were assumed to be the same as the parameters for the ninth period for the purposes of this analysis. For Periods 1 to 4, employers are eligible for the subsidy if they have a qualifying revenue decline. Revenue declines are calculated based on calendar months, rather than the 4-week periods, with the first period corresponding to March 2020. Revenues in the corresponding calendar month are usually compared to revenues in the same calendar month in the prior year. The revenue decline required for eligibility is 15% for March, and 30% for April, May and June. For July onwards, employers are eligible for the subsidy if in a period they have any revenue decline. For Periods 1 to 4, the subsidy is 75% of wages up to the lesser of the weekly cap and wages actually paid. For new employees, the subsidy is 75% of wages paid up to the cap. For Periods 5 to 10, the subsidy rate that an employer will receive depends on the extent of the employer’s revenue losses in the corresponding calendar month (for the base subsidy) and the preceding three calendar months (for the top-up). The level of subsidy declines over periods 7 to 9 as shown in the annexed tables. The employee remuneration eligible for subsides is capped at $1,129 per week. For employees on leave with pay, employers can also recover 100% of employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. Eligible employers include individuals, taxable corporations, and partnerships as well as non-profit institutions and registered charities. Public bodies are not eligible. The PBO estimates the total net cost of this measure to be $59.2 billion - $67.9 billion in wage subsidies and $0.5 billion in forgone employer payroll contributions, offset by $9.1 billion in corporate income tax revenues from wage subsidies.

PDF