On Tuesday, Prime Minister Justin Trudeau announced that applications for the Canada Emergency Wage Subsidy (CEWS) will open Monday, April 27.
The government has also launched a calculator that is set to allow eligible businesses to understand the amount they would be able to claim under the emergency wage subsidy program. Businesses will be able to apply to the CEWS on Monday through the Canada Revenue Agency (CRA), which is administering the program on behalf of the Government of Canada.
“The reality is during this crisis is that people need immediate assistance and we have to deliver that as quickly as we can.”
In response to how quickly companies can expect to see money, Trudeau noted the government hopes to be able to send out funding within several days of when companies apply.
“The reality is during this crisis is that people need immediate assistance and we have to deliver that as quickly as we can,” he said. The prime minister encouraged companies to use the calculator as they wait for the subsidy and not hesitate to utilize the emergency loan programs being administered through banks, the Business Development Bank of Canada (BDC), and Export Development Canada (EDC).
In a minister briefing later on Tuesday, Member of Parliament Jean-Yves Duclos, president of the Treasury Board, said he expects 90 percent of applications will have been processed by May 5, with direct deposits and cheques administered soon after.
“I’m confident that the CRA will be able to get the payments out as quickly as possible,” he said, while also noting the complex nature of the program and the urgent need for businesses to receive financial support. The Treasury Board president estimated that the emergency wage subsidy will send funds to thousands of Canadian businesses each week.
Duclos encouraged companies to update their CRA business accounts as they wait to apply and noted that a technical briefing for media with more details on CEWS will be held later today.
Technical experts from the CRA have explained that companies applying to the CEWS do not need to do so immediately on Monday, applications will be open from April 27 through to May 3 before the CRA begins to assess and disburse money. The CRA is using an automated system to assess the majority of applications (large claims and those will discrepancies will be assessed manually). Once the automated verification process is completed the CRA will begin to issue payments for approved applications on May 5.
The CRA is expecting a high percentage of applications to be accepted the week of May 4, noting that the CEWS has been a high priority for the agency which has more than 3,000 auditors assigned to work on the wage subsidy claims.
The 75 percent emergency wage subsidy was passed by Parliament on April 11 and final details of the program allow businesses that have seen a revenue decline of 15 percent for the month of March and 30 percent for April and May to receive government support. The program is currently available for a three month period from March 15 through to June 6.
The CEWS amount for each business is based on the number and type of eligible employees as well as the amount and type of pay they received before and during the crisis. There is no limit on the total subsidy amount that an eligible business may claim.
In-depth details on the wage subsidy program, who is eligible and how to apply, are available here.
The calculator, which is already live on the Government of Canada website, encourages users to ensure their business meets the eligibility criteria before using the calculator. The website also notes that after businesses apply for the wage subsidy the claim will be subject to verification.
During the Tuesday technical briefing, it was noted that the CRA will not initially be auditing whether companies choose to assess revenue decline on a year-over-year basis or compared to the first two months of 2020 or whether companies chose to calculate revenue on the accrual method or the cash method. These are things the CRA said it plans to test in a future, post-audit context.
The representatives from the CRA also noted that in cases where employees may have been laid off and received the Canada Emergency Response Benefit (CERB) but are now re-hired and eligible for the wage subsidy, CERB amounts will have to be repaid. They encouraged companies that are taking advantage of the CEWS for those employees to inform employees about information available on the CRA website about how to repay those amounts.
StartUp HERE Toronto is a publishing partner of Betakit and this article was originally published on their site.