Canada Emergency Wage Subsidy for Employers Impacted by COVID-19

Written By Jordan Fremont and Katelyn Weller

Previously, the federal government announced a wage subsidy of up to 10 percent for small businesses, up to a maximum of $1,375 per worker and $25,000 per employer. On Friday, March 27, 2020, the federal government announced that the wage subsidy is being increased to 75 percent, with additional details to be released by April 1.

On March 30, 2020, Prime Minister Trudeau further announced that the subsidy will apply to any business that has experienced a revenue decrease of at least 30 percent due to the COVID-19 pandemic, regardless of the number of employees or business size. In addition, the coverage at 75 percent will be available on the first $58,700 of an employee's wages, which amounts to $847 per week. The availability of the wage subsidy will be back-dated to March 15, 2020.

In his announcement, the prime minister emphasized that:

• every dollar received during the wage subsidy program should go to employees;
  
• every effort should be made to top up workers to their full wages (i.e., pay the other 25 percent); 
  
• every effort should be made to bring back workers that have been terminated; and 
  
• there will be "serious consequences" (not described) for employers that try to "game" the system. 

It is anticipated that the government will soon be publishing information on these and other details (including the expected cost of the program).

To date, there has not been any discussion concerning any coordination of the wage subsidy with the Supplemental Unemployment Benefit Program or any Work Share Program.

We are monitoring for further details on the Canada Emergency Wage Subsidy and will update you as more information is made available. If your business or organization has questions in respect of the wage subsidy or other employment-related matters, please contact a member of the Bennett Jones Employment Services group. In addition, please visit our COVID-19 Resource Centre for other COVID-19-related materials.

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