The federal government has released the following updates on the Canada Emergency Wage Subsidy program:
- Applicants for wage subsidy will need to re-apply each month
- The 30% revenue decline (which is needed to qualify for wage subsidy) will be measured against the same month last year
- Employers must “do their best” to pay remaining 25% of wages
- Severe penalties for those who fraudulently uses funds
- Funds will be available six weeks from now through the CRA online portal(TBC)
- Organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 10%(does not require the demonstration of 30% revenue decline)
- To measure revenue loss, employers can choose to compare their revenue of to the same month of 2019, or to an average of their revenue earned in January and February this year
- For the month of March the 30% loss threshold will be lowered to 15%
- Charities and non-profits have the choice of excluding or including government funding for the purposes of calculating eligibility for the above
- The 75% wage subsidy is retroactive to March 15th and will apply to any business (of any size) or non-profit that has seen revenues decline by 30% or more as a result of COVID-19.
- The subsidy will be a maximum of $847/week per employee, based on an annual salary/wage of up to $58,700.
The federal government announced the following support for small businesses:
- The Canada Emergency Wage Subsidy(also applicable to non-profits and large businesses)
- Government will also guarantee bank loans for small businesses of up to $40,000
- An additional $12.5 billion through Export Development Canada & the Business Development Bank to help small & medium-sized businesses with operational cash flow requirements
- GST and HST payments, duties and taxes owed on imports, will be deferred until June
Effective immediately, BDC will provide new relief measures for entrepreneurs:
- Working capital loans of up to $2 million with flexible terms and payment postponements for up to 6 months for qualifying businesses;
- Postponement of payments for up to six months, free of charge, for existing BDC clients with total BDC loan commitment of $1 million or less
- Reduced rates on new eligible loans
Additional details regarding Business Credit Availability Program (BCAP) measures, including industry specific support, to be announced in the coming days.