Wage subsidy launches; uncertainties remain

Federal wage subsidy opens today, but many questions remain

APPLICATIONS FOR THE Canada Emergency Wage Subsidy open today and more than half of small firms with employees say they will apply, finds a new survey by the Canadian Federation of Independent Business (CFIB). However, many have questions around the subsidy program remain, including which wages can be covered, who is eligible and how to bring back laid off employees ahead of receiving the subsidy payments.

“Our survey data indicates the wage subsidy program will be a big help for many small firms that have been struggling to keep their workers,” said CFIB president Dan Kelly. “Unfortunately, the subsidy has already come too late for some businesses, who are not currently in a position to rehire laid off staff. But with signs in some provinces that businesses may soon begin a phased approach to reopening, an ongoing wage subsidy may prove very useful in bringing back workers who have been laid off.”

CFIB’s Business Helpline is receiving thousands of calls from business owners each week (approximately 800 per day), and the complexities of the program remain a significant concern.

“The Canada Revenue Agency has been working with us to help provide answers, but much more needs to be done,” Kelly added.

The top questions business owners have about the Canada Emergency Wage Subsidy (CEWS) are:

1.  Can employer wages be included in the wage subsidy?

2. Can employers pay staff retroactively using the wage subsidy or use it for those who have already claimed the Canada Emergency Response Benefit?

3. Can employers hire new employees after March 15th and include their wages?

4. Which employees can be included in the rebate of an employer’s payroll taxes? 

5. If employees are paid in periods that are different from those outlined by the government, how does the employer recalculate their pay?

6. How does the previously announced 10 per cent wage subsidy work with the new 75 per cent version?

“We recommend business owners who have these or other questions visit cfib.ca/COVID19 for the latest information, or call our business help line at 1-888-234-2232 to speak with an expert,” added Kelly. “Given the emergency, CFIB is now providing free advice to all business owners, regardless of whether they are able to pay for a membership.”