Canada Emergency Wage Subsidy (CEWS)
The government introduced the CEWS to prevent further job losses and encourage employers to quickly rehire workers previously laid off as a result of COVID-19. Budget 2021 proposes to extend the CEWS for the period June 6, 2021 to September 25, 2021. The subsidy rates would be gradually phased out starting on July 4, 2021. The proposed CEWS rates are summarized in the table below:
* The maximum weekly benefit per employee is equal to the maximum combined base subsidy and top-up wage subsidy for the qualifying period applied to the amount of eligible remuneration paid to the employee for the qualifying period, on remuneration of up to $1,129 per week.
In addition, Budget 2021 proposes the following CEWS reference periods for periods 17 to 20:
Employers that had chosen to use the general approach for prior periods would be required to continue to use that approach for additional periods.
Baseline Remuneration
Budget 2021 proposes to allow an eligible employer to elect to use the following alternative baseline remuneration periods:
- March 1 to June 30, 2019 or July 1 to December 31, 2019, for the qualifying period between June 6, 2021 and July 3, 2021; and
- July 1 to December 31, 2019, for qualifying periods beginning after July 3, 2021.
CEWS Repayment Requirement
Budget 2021 proposes that public companies be required to repay CEWS amounts received for qualifying periods that begin after June 5, 2021 should the aggregate compensation for “specified executives” during the calendar year exceeds the aggregate compensation for specified executives during the 2019 calendar year. The goal with this proposal is to preclude these public companies from using CEWS funds to increase remuneration payments to top executives.
A publicly listed corporation's specified executives will be those individuals that are Named Executive Officers (CEO, CFO, etc.) whose compensation is required to be disclosed under Canadian securities laws in the company’s annual information circular provided to shareholders, or similar executives in the case of a corporation listed in another jurisdiction.
The amount of the CEWS repayment would be equal to the lesser of:
- The total of all CEWS amounts received in respect of active employees for qualifying periods that begin after June 5, 2021; and
- The amount by which the corporation's aggregate specified executives' compensation for 2021 exceeds its aggregate specified executives' compensation for 2019.
Support for Furloughed Employees
To align with benefits under EI, Budget 2021 proposes to adjust the CEWS in respect of furloughed employees for the period June 6, 2021 to August 28, 2021, to the lesser of:
- The amount of eligible remuneration paid in respect of the week; and
- The greater of:
- $500; and
- 55 per cent of pre-crisis remuneration for the employee, up to a maximum subsidy amount of $595.