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COVID-19 Federal Benefits And Supports – Temporary Wage Subsidy Increased To 75% With Added Qualification

COVID-19 Federal Benefits and Supports – Temporary Wage Subsidy Increased to 75% with Added Qualification

COVID-19 Federal Benefits and Supports

Temporary Wage Subsidy Increased to 75% with Added Qualification

March 30, 2020 – 10:30 AM

By Nizam Shajani, CPA, CA, MBA

Prime Minister Justin Trudeau has provided more information on the temporary wage subsidy.  This subsidy has been increased from 10% to 75% with additional qualifications required.  The purpose of the subsidy is to protect jobs.

It is not clear if those who qualified on the previous 10% subsidy and do not qualify under the new rules for the increased 75% subsidy, still qualify for the 10% subsidy or if they will have to re-pay that subsidy.

What businesses qualify? 

The subsidy is now only available for businesses where revenues have decreased by at least 30%.  It is not clear if this decrease is an annualized decrease or a month by month comparable.  It seems this criteria will be assessed after the fact – so there may be a repayment requirement based on how the details of this decrease are determined.

The subsidy will be available for corporations, not for profits and charities.

The number of employees does not matter.  There is no cap per employer.

The Prime Minister has warned that there will be severe and serious consequences for businesses that take advantage of this subsidy.  The government is relying on good faith and trust.  It seems the policy will be to pay first and reassess later.

How much is the subsidy?

The federal government will cover 75% of wages paid to employees, up to $847/week on the first $58,700 annualized remuneration.

The subsidy will be retroactive to March 15, 2020.

How do you get the subsidy?

Details are anticipated to be released by the finance minister tomorrow.

 

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