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Trudeau extends Canada’s Emergency Wage Subsidy program

Friday, May 15, 2020 @ 3:51 PM | By Terry Davidson

Canada’s government has extended the length and reach of its emergency wage subsidy for businesses in a bid to keep people employed during and after the COVID-19 crisis.

In his May 15 update to the nation, Prime Minister Justin Trudeau said his government will extend the Canada Emergency Wage Subsidy program in a bid to help employers keep workers on the payroll and rehire those who have been laid off in the wake of widespread economic shutdown.

The program, which was set to end June 6, will now run until Aug. 29. As before, it is retroactive to March 15.

“Business owners, please take confidence from this announcement,” said Trudeau. “You now have some runway to catch your breath as you get restarted. So, please, bring back your employees. Going forward, we need to make sure this program keeps working for people; that it keeps encouraging employers to rehire staff and even expand where possible. Over the next month, we’ll work with business and labour stakeholders on any adjustments that might be needed. One of the things we’ll be looking at is the 30 per cent revenue decline threshold for eligibility. As businesses start up, meeting a decline shouldn’t be a barrier to growth.”

The wage subsidy, a part of the government’s COVID-19 Economic Response Plan, was introduced at the beginning of April.

Eligible employers include those who suffered a drop in gross revenue of at least 30 per cent in March, April or May, according to a government webpage.

The program applies at a rate of 75 per cent of the first $58,700 normally earned by employees, meaning a benefit of $847 a week per employee, and would apply to employers of all sizes, across all sectors of the economy, save for public sector entities.

Following Trudeau’s announcement, Finance Minister Bill Morneau said the scope of the program will also be widened to include registered amateur sport associations, registered journalism bodies and non-public colleges and schools, including those that teach language, the arts or driving.

“The wage subsidy will also be available to partnerships with non-eligible members as long as the non-eligible members are not majority owners,” Morneau said, adding that the changes will be retroactive to March 15.

“We also intend to propose legislation to provide greater flexibility for employers to use the wage subsidy to rehire support workers who may not have been regular employees in the early months of this year but are none-the-less important to operations — workers like seasonal employees,” he said.  

The wage subsidy program, Morneau said, “is helping almost two million workers across Canada, and thousands of applications are being received every single day.”

Morneau was not able to say how much extending the program will cost but said numbers will be provided when available.

“The message to employers remains the same,” he said. “We hope that you apply to this program and rehire your workers. While much remains unknown, there’s one thing that I do know: workers drive our economy. By making sure that they have jobs to go back to, we’re making sure that Canada stands ready to recover.”

The Canadian Chamber of Commerce was quick to praise the extension, but also pointed to businesses unable to apply.

“As reopening and recovery measures are implemented at different times and stages across the country, the [Canada Emergency Wage Subsidy (CEWS)] is an important tool for those businesses who qualify to help in the process of resuming and stepping up operations,” it stated. “We also appreciate that uptake for the CEWS is far below original expectations. Many businesses have closed or are not operating at full capacity, limiting applications, but many more do not qualify for reasons including they do not meet the current revenue loss thresholds, use non-T4 employees or engage third-party payroll providers.”

The government has reportedly paid out just over $3 billion in wage subsidies to almost 124,000 companies and has exceeded $150 billion in spending on COVID-19 relief measures.