Updates to Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and Lockdown Support

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On March 3, 2021, the Government of Canada announced the following proposed updates to the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Rent Subsidy (CERS) and Lockdown Support for the period of March 14 to June 5, 2021 (qualifying periods 14 to 16):

CEWS

  • The maximum wage subsidy rate for active employees would remain at 75 per cent (40 per cent base subsidy + 35 per cent top-up subsidy).
  • For furloughed employees, employers who qualify for the wage subsidy would be able to continue to claim up to a maximum benefit of $595 per week per employee.
  • Employers would continue to be entitled to claim their portion of contributions in respect of the Canada Pension Plan, EI, the Québec Pension Plan and the Québec Parental Insurance Plan for furloughed employees.
  • An additional elective alternative baseline remuneration computation is proposed to ensure that the baseline remuneration comparator remains appropriate. An eligible employer would be allowed to elect, for qualifying periods from March 14 to June 5, 2021, to use the period of March 1, 2019 to June 30, 2019, or July 1 to December 31, 2019 (the current alternative period), to calculate baseline remuneration.

CERS

  • The maximum rent subsidy rate will remain at 65 per cent; and
  • Lockdown Support will remain at 25 per cent and continue to be provided in addition to the rent subsidy, providing eligible hard hit businesses with rent support of up to 90 per cent.

CEWS and CERS

  • Since the COVID-19 pandemic has been going on for almost a full year, the prior reference periods would be based on calendar months from 2019 to ensure that the general approach continues to calculate an organization's decline in revenues relative to a pre-pandemic month:
  Period 14 March 14 to April 10 Period 15 April 11 to May 8 Period 16 May 9 to June 5
General Approach March 2021 over March 2019 or February 2021 over February 2020 April 2021 over April 2019 or March 2021 over March 2019 May 2021 over May 2019 or April 2021 over April 2019
Alternative Approach March 2021 or February 2021 over average of January and February 2020 April 2021 or March 2021 over average of January and February 2020 May 2021 or April 2021 over average of January and February 2020
  • Employers that had chosen to use the general approach for prior periods would continue to use that approach. Similarly, employers that had chosen to use the alternative approach would continue to use the alternative approach.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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