As the COVID-19 situation in Canada and around the world continues to develop rapidly, we are providing our eleventh update to employers. Below is an update on important information announced since our last update on March 27, 2020. We will continue to provide information as it becomes available and we remain available to you to answer any specific questions you may have.
New Details on the "Canada Emergency Wage Subsidy"
As announced on Friday, March 27, 2020, the federal government is increasing a previously announced wage subsidy from 10% to 75%.
Some important new details were announced today. Additional details will be announced tomorrow.
Unlike the previously announced 10% wage subsidy, eligibility for the 75% wage subsidy, titled the "Canada Emergency Wage Subsidy" ("CEWS") has been expanded beyond small businesses, not-for-profits, and charities. The CEWS will be open to employers who have seen their revenues decreased by at least 30% as a result of COVID-19. The number of employees or size of the business will not affect eligibility for the subsidy.
Employers will be eligible to receive a 75% subsidy on the first $58,700 of an employee's earnings. This is equivalent to $847 per week. This is more than the $500-$573 weekly maximum employees could be entitled to through the Canada Emergency Response Benefit (CERB) or EI benefits. As previously announced, the CEWS is backdated to March 15.
Prime Minister Trudeau announced that employers are not required to pay the additional 25% of the employee's wages if they can't. However, he said government was strongly encouraging CEWS-eligible employers to "top up" their employees' wages if they are able to. The government is also encouraging employers to rehire laid-off employees if they are able to. The Prime Minister acknowledged they are "trusting businesses to do the right thing" and that there would be serious consequences for anyone taking advantage of the program. We await further details of the program, on these and other points, expected tomorrow.
In the interim, employers may wish to consider if the CEWS could be a program that would benefit them and their employees. In addition to the possibility of higher levels of financial supports to employees, the subsidy may reduce or eliminate the need for employers to temporarily lay off employees, and/or terminate their employment if this situation continues for a sustained period of time. The government has indicated the CEWS will be available to employers who are open but with reduced revenues, as well as those that have shuttered as a result of COVID-19.
Update on Federal EI Work-Sharing and SUB Plans
Service Canada has also recently announced that the timeline to submit EI Work-Sharing agreements for approval has been reduced from 30 days to 10 days. Further, we are advised the EI SUB plans are being registered relatively quickly, and in some cases within a matter of days. For more information about EI Work-Sharing and EI SUB plans, see our previous article.
A number of Alberta government offices have announced temporary office closures or reduced hours for in-person services. A full listing and ways to continue accessing services can be found here.
Alberta Updated Restrictions on Businesses
As we previously shared with you on Friday, March 27, 2020, additional restrictions are now in place for Alberta businesses. Various close contact and non-essential retail businesses are now required to close. Additionally, the Alberta government has now released a list of essential services which can be accessed here. If you have questions about how these new public health orders might impact your business, please contact us.
Conclusion
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The information in this update is intended as general information and should not relied on as legal advice.