On April 19, 2021, as part of the annual budget, the Government of Canada announced that the government has extended the following subsidies from June 5, 2021 to September 25, 2021:
– Canada Emergency Wage Subsidy (“CEWS”)
– Canada Emergency Rent Subsidy (“CERS”)
– Lockdown support regarding CERS.
Canadian government provided instructions on March 3, 2021 for any claims between March 14, 2021 to June 5, 2021 as follows:
– The maximum wage subsidy rate for active employees will remain at 75%
– The revenue drop will continue to compare your eligible revenue to a time prior to March 2020.
– One may use a new pre-crisis pay period when calculating an employee’s pre-crisis pay (baseline remuneration) for the claim periods listed above.
– The maximum subsidy amount for employees on leave with pay will remain at $595.
In April 2021, the Government provided instructions on filing a late CEWS claims for previous periods. In these instructions government allowed taxpayers to file applications towards previous CEWS periods within 30 calendar days following the later of:
– April 21, 2021 or
– The claim period’s deadline (i.e. Period 1 – 5: Feb 1, 2021 and Period 6 and later: 180 days after the end of the claim period).
Canada Revenue Agency (“CRA”) will accept late filed wage subsidy application only in exceptional circumstances. CRA requires that a taxpayer makes every attempt to file wage subsidy application on or before the deadline but will accept late filed application if any of the following situations apply:
– Identified CRA secure portal outage that prevented a business from filing the application prior to the applicable deadline.
– Business account was temporarily suspended or there was some account limitation that prevented the filing of the application prior to the applicable deadline.
– There was an undue delay on the part of the CRA in receiving and processing your wage subsidy application before the deadline.
– A business relied upon inaccurate information provided inadvertently by the CRA that directly affected a business’s ability to file the wage subsidy application on time.
Additionally, CRA wants to ensure that any late filed wage subsidy claim is not a result of professional advice the fee structure for which was dependent on the claim amount. CRA would requires any late filed subsidy to be filed before the later of April 21, 2021 and the applicable filing deadline as stated above.
CRA has also provided circumstances where a late filed amended application will be accepted. These circumstances are only applicable if a business determines that it was entitled to a higher amount of wage subsidy than filed. These circumstances include:
– There was an arithmetic error, transposition error, or unintended omission of additional business activities or employment expenses in the calculation for the wage subsidy by the business.
– The business relied upon inaccurate information provided inadvertently by the CRA to file the amended wage subsidy application on time.
– There was an identified outage of CRA secure portal that prevented a business from filing the amended application prior to the applicable deadline.
– There was undue delay on the part of the CRA in processing an application.
Even for amendments, CRA wants to ensure that any late filed amendments to originally filed applications are not a result of professional advice the fee structure for which was dependent on the claim amount. Any late-filed amended wage subsidy application request for an upward adjustment was made to the business enquiries line within 30 calendar days following the later of April 21, 2021 and the applicable filing deadline for each period as stated above.
In addition to the CEWS, On April 19, 2021, the government also the extension of the Canada Emergency Rent Subsidy until September 25, 2021. During the budget announcements, government also proposed to gradually decrease the rate of the rent subsidy, beginning July 4, 2021 to ensure an orderly phase out of this program.
On May 20, 2021, Lockdown criteria was also updated to include that minimum lock period can span across two different claim periods.
If you need any further details regarding the subsidy programs, please contact us.
This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. © 2021 Shajani LLP.
Shajani LLP is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning services