Federal COVID-19 subsidy program rates maintained

On March 3, 2021, the Federal Government announced their intention to maintain the current rate structure for the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Rent Subsidy (CERS) and Lockdown Support program through to June 5, 2021. Proposed program details for these measures include:

• The maximum base wage subsidy rate for active employees would remain at 40 percent and the maximum top-up wage subsidy rate for employers most adversely impacted by the pandemic would remain at 35 percent. As such, the maximum combined wage subsidy rate would continue at 75 percent.
• The weekly wage subsidy for a furloughed employee would remain the same and continue to be the lesser of:
  • The amount of eligible remuneration paid in the respect of the week; and
  • The greater of $500 and 55 percent of pre-crisis remuneration for the employee, up to a maximum subsidy amount of $595.
• The maximum rent subsidy rate would remain at 65 percent.
• Lockdown Support would remain at 25 percent and continue to be provided in addition to the rent subsidy, providing eligible businesses with rent support of up to 90 percent.

Revenue-decline Reference Periods

Since the launch of these subsidy programs, the general approach to determining revenue-decline has been to compare the change in an organization’s revenues in a calendar month with its revenues in the same calendar month of the previous year. An alternative approach can also be used which compares an organization’s change in monthly revenues relative to the average of its revenues in January 2020 and February 2020.

The proposed reference periods are summarized below:

Period 14: Mar 14 - Apr 10

General approach: March 2021 over March 2019 or February 2021 over February 2020
Alternative Approach: March 2021 or February 2021 over average of January and February 2020

Period 15: Apr 11 - May 8

General approach: April 2021 over April 2019 or March 2021 over March 2019
Alternative Approach: April 2021 or March 2021 over average of January and February 2020

Period 16: May 9 - June 5

General approach: May 2021 over May 2019 or April 2021 over April 2019
Alternative Approach: May 2021 or April 2021 over average of January and February 2020

Ref:  Department of Finance

Note that employers who chose to use the general approach for prior periods would continue to use that approach; employers who chose to use the alternative approach would continue using the alternative approach.

Baseline Remuneration Periods

For Period 7 and onwards, baseline remuneration is relevant for non-arm’s length employees. 

For qualifying periods from March 14, 2021 to June 5, 2021 there are three alternatives:

• January 1, 2020 to March 15, 2020 (default)
• March 1, 2019 to June 30, 2019 (if elected)
• July 1, 2019 to December 31, 2019 (if elected)

The Canada Revenue Agency will administer this measure on the basis of draft legislative proposals released with today's announcement.

MNP will provide further updates as they become available. For more information, please visit our COVID-19 Business Advice Centre, or contact your local MNP Advisor.