Wage subsidy calculator posted, applications open Monday

Prime Minister Justin Trudeau speaks to the press outside Rideau Cottage on Wednesday, March 25./Facebook

Applications for the Canada Emergency Wage Subsidy open Monday.

The subsidy provides a 75 per cent wage subsidy of up to $847 per employee per week, for up to 12 weeks, retroactive to March 15. The federal government initiative is meant to prevent further job losses and encourage the re-hiring of workers previously laid off.

On Tuesday, the federal government launched an emergency wage subsidy calculator to help employers prepare their application for the CEWS.

The calculator is avail la on the Canada Revenue Agency (CRA) wage subsidy web page. It was tested with stakeholders including the Canadian Federation of Independent Business (CFIB) and chartered professional accountants.

It has detailed information and instructions about who can apply, how eligibility is assessed and how the subsidy is calculated. It also includes a printable statement feature employers can use to view their claim at a glance and as of Monday, enter required information into the application form quickly and easily.

The calculator can help provide employers with important information they can use now to make decisions about retaining and re-hiring workers. A series of information sessions will be held in the coming days to provide a forum for employers.

Claims will be subject to verification by the CRA and funds for approved applications will begin to go out on May 5. Applications will be available through the CRA My Business Account or Represent a Client.

“The Canada Emergency Wage Subsidy will help many small business owners keep their employees during the COVID-19 pandemic,” said Dan Kelly, CFIB president, in a press release.

“This will remove the stress of losing a job for workers and allow employers to bring their teams back together quickly as soon as the emergency phase is over. CFIB appreciates the work of the Canada Revenue Agency in operationalizing this key benefit. We were pleased to provide feedback to the CRA on its calculator designed to make it easier for firms to access the wage subsidy.”

The subsidy will be processed at the payroll program (RP0 account level, so you will have to file a separate application for each RP account.

If you don’t have a My Business Account or a Represent a Client account, you can use a separate online application form available on April 27.

The subsidy is open to businesses of any size that can prove their revenue declined by 30 per cent as a result of COVID-19, or 15 per cent in the second half of March.

If you are expecting payment of $25 million or more, you will have to get your payment through the Large Value Transfer System. Registration for that process can begin immediately.

If you issue a claim but do not meet the requirements, you will be required to repay any amounts you received. Penalties for fraudulent claims include fines or imprisonment.

If you artificially reduce your revenue to claim the wage subsidy you will be required to repay an amounts you received plus a penalty of 25 per cent of the total value.

You must keep records demonstrating your reduction in revenues and remuneration paid to employees. Employers are encouraged to top up their employees’ paycheques above the 75 per cent funded by the government.