The FG Forum

COVID-19 Update - Federal and Provincial Wage Subsidies

JULY 21, 2020

Update Regarding Canada Emergency Wage Subsidy

On July 17, 2020, the Government of Canada issued their DRAFT legislation to extend The Canada Emergency Wage Subsidy (“CEWS”) until December 19, 2020. The details of the program have only been released up to November 21, 2020. Prior to the extension, the government subsidized eligible employers up to 75% of employee wages if revenues declined by 30% or more.

Effective July 5, 2020 (Period 5), the CEWS program will change as follows:

  • There is an opportunity to receive a wage subsidy of up to 85% of eligible wages through a base subsidy (60%) and a top up subsidy (25%). The top up subsidy kicks in when revenues have decreased by over 50%. The maximum subsidy of 85% is reached when revenue has declined by 70% or more
  • Organizations with revenue drops of less than 30% are now eligible for a wage subsidy but at a reduced amount (1.2 x revenue decline %). A 20% drop in revenue would be entitled to a 24% subsidy for periods 5 and 6
  • The maximum CEWS rate of 85% for periods 5 and 6 will be gradually reduced to a maximum of 45% by November 21, 2020 (period 9). A decline of 30% in revenue will yield a subsidy of 12% for period 9
  • Employers can choose to change the method of calculating the drop in revenue compared to what was used in periods 1-4, but need to be consistent on the methodology for periods 5 through 9 and the same method needs to be used for the base subsidy as well as the top up subsidy
  • Previously, if an organization qualified for the subsidy in one period, they auto qualified in the subsequent period. For period 5 and subsequent periods, organizations can use the greater of revenue % decline in the current period or the subsequent period to calculate the wage subsidy
  • For periods 5 and 6 (July and August) the employer can choose to use the CEWS rules in place for periods 1-4 or these new rules

More details can be found here:
https://www.canada.ca/en/department-finance/news/2020/07/adapting-the-canada-emergency-wage-subsidy-to-protect-jobs-and-promote-growth.html

Manitoba Wage Subsidies

Over the last couple of months, the Manitoba Government has developed a few support programs to encourage organizations to hire or re-hire employees. Here is a summary of the 3 programs with a link with more detailed information for each:

1. Manitoba Summer Student Recovery Jobs Plan

  • Promotes the hiring of high school and post-secondary students (ages 15-29) through wage subsidies to employers in the private and non-for-profit sectors.
  • Student start date must be May 1, 2020 or later
  • Subsidy is $7/hour up to a maximum of $5,000 per student employed between May 1 and September 4, 2020
  • Program funds up to 5 students
  • Payments will be made as a lump sum upon proof of payment of wages

For more information: https://manitoba.ca/covid19/business/summerstudentjobprogram.html

 2. Manitoba Back to Work this Summer Program

  • Promotes the hiring and re-hiring of employees in the private and non-for-profit sectors
  • Program covers 50% of wage costs for up to 10 weeks, between June 1 and August 30, 2020, to a maximum of $5,000 per worker
  • Businesses must not have received support from other government subsidies for the same positions
  • Start date must be June 1, 2020 or later
  • Application must be submitted on or before August 1, 2020
  • Program funds up to 5 workers, combined with the Manitoba Summer Student Recovery Jobs Program and Manitoba Back to Work This Summer Program
  • Payments will be made as a lump sum upon proof of payment of wages

For more information: https://manitoba.ca/covid19/business/btwtsp.html

3. Back to Work in Manitoba Program

  • Promotes the hiring and re-hiring of employees in the private and non-for-profit sectors
  • Program covers 50% of wage costs between July 16 and October 31, 2020, to a maximum of $5,000 per worker
  • Businesses must not have received support from other government subsidies for the same positions
  • Start date must be July 16, 2020 or later
  • Application must be submitted on or before October 1, 2020
  • Program funds up to 10 workers, even if they received support under the Manitoba Summer Student Recovery Jobs Program and Manitoba Back to Work This Summer Program
  • Payments will be made as a lump sum upon proof of payment of wages

For more information: https://manitoba.ca/covid19/business/btwmp.html

If you have any questions regarding these updates that pertain to your specific circumstances, please contact your lead partner or manager at Fort Group for further assistance.

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