April 8, 2020
Last week, the Federal Government announced it would provide the CEWS, a 75% wage subsidy for any business, charity or non-profit that has suffered a 30% decline in revenue due to COVID-19, which we previously discussed here, and here.
It was previously announced that businesses would have to compare their current revenues to those in the same month last year to demonstrate a 30% decrease in revenue and to qualify for the CEWS. This posed a problem in particular for non-profits that received government funding, and for new start-up companies that did not exist last year.
Today, Prime Minister Trudeau revealed more information on how the 30% decrease in revenue will be calculated to determine eligibility for the CEWS.
- Companies now have the option to use January and February 2020 revenues as reference points to show they have experienced a 30% loss in revenue.
- Charities and non-profits will also have the choice to include or exclude government funding when calculating loss in revenue.
- Further, all businesses will only have to show a 15% decline in revenue for March 2020 to qualify for the CEWS, because most businesses only felt the economic effects of COVID-19 halfway through that month.
The law establishing the CEWS has not yet been tabled in Parliament. This is expected to occur in the coming days.
Our firm will continue to provide you with updates as the Federal Government’s response to the COVID-19 pandemic evolves.