Details for the Canada Emergency Wage Subsidy to Help Businesses and Nonprofits Released
On March 27, the federal government announced that they are proposing to introduce a wage subsidy of 75 percent for qualifying businesses, nonprofits, and charities as part of their COVID-19 Economic Response Plan.
The Canada Emergency Wage Subsidy is intended to help workers have a source of income through this difficult time. In some cases, it may help nonprofits rehire workers previously laid off, and to keep those who are already on payroll. The wage subsidy is about $71 billion in total. These details provide more clarity for nonprofits and charities while they assess their next step forward.
On April 1, the government announced additional details for the proposed Canada Emergency Wage Subsidy:
Nonprofit organizations and charities are eligible for the wage subsidy.
Those not eligible include “public bodies” who are municipalities and local governments, Crown corporations, public universities, colleges, schools, and hospitals.
The subsidy is for eligible employers who have a drop of at least 30 percent of their revenues during the “eligible period” — either March, April, or May — when compared to the same month in 2019. Employers are required to attest to the decline in revenue and will not tolerate employers who are looking to abuse the system.
Employers will be eligible for a subsidy of up to 75 percent of salaries and wages to employees.
There would be no overall limit on the subsidy amount that an eligible employer may claim.
The subsidy amount for an employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:
75 percent of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
the amount of remuneration paid, up to a maximum benefit of $847 per week or 75 percent of the employee’s pre-crisis weekly remuneration — whichever is less.
An eligible employer’s entitlement to this wage subsidy will be based entirely on the salary or wages actually paid to employees. Employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.
Those that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced Temporary Wage Subsidy of 10 percent of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
Anyone claiming under the Temporary Wage Subsidy would have that amount deducted from this new subsidy.
If employees are entitled to receive the Canadian Emergency Response Benefit and they receive the amount which is around $2,000 per month, it may impact the amount the employer receives.
More clarity for nonprofits and charities required
The government does not have a definition of what revenue is appropriate for nonprofits and charities. They state that they will “continue to work with the sector to ensure the definition of revenue is appropriate to their specific circumstances”.
Additionally, there is no clear definition of “pre-crisis weekly remuneration”. The government plans on providing further guidance with respect to how to define pre-crisis weekly remuneration for a given employee in the coming days.
The government is also considering additional support for nonprofits and charities, particularly those involved in the front-line response to COVID-19. More details will be announced regarding nonprofit organizations and registered charities.
How to Apply
If you are eligible to apply for the Canada Emergency Wage Subsidy, you can apply through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. More details about the application process will be available in the coming days.
For more information on the Canada Emergency Wage Subsidy, click here.
CCVO will be monitoring the federal announcement and will update the sector on these developments.
For current federal and provincial policy updates regarding COVID-19, check out our COVID-19 Resources for Nonprofits.