Canadian Emergency Wage Subsidy- Update

Thursday, April 9th, 2020

On April 8, 2020, The Government of Canada is taking immediate, significant and decisive action to support Canadians and employers facing hardship as a result of the global COVID-19 outbreak.

1. To measure revenue loss, it is proposed that all employers have the flexibility to compare their revenue of March, April and May 2020 to that of the same month of 2019, or to an average of their revenue earned in January and February 2020.
2. For March, the 30-per-cent benchmark has been reduced to 15 per cent, in recognition of the fact that many businesses did not begin to be affected by the crisis until partway through the month.
3. In recognition that the time between when revenue is earned and when it is paid could be highly variable in certain sectors of the economy, it is proposed that employers be allowed to measure revenues either on the basis of accrual accounting (as they are earned) or cash accounting (as they are received). Special rules would also be provided to address issues for corporate groups, non-arm’s length entities and joint ventures.
4. Registered charities and non-profit organizations would also be able to benefit from the additional flexibilities being provided to employers with respect to the revenue loss calculation. In addition, to recognize that different types of organizations are experiencing different types of funding pressures, it is proposed that charities and non-profit organizations be allowed to choose to include or exclude government funding in their revenues for the purpose of applying the revenue reduction test.

Click here to read more about the Canadian Emergency Wage Subsidy update.