Update on the Canada Emergency Wage Subsidy (CEWS): Eligibility Extension
The following are the most recent updates regarding the Canada Emergency Wage Subsidy (CEWS).
- The CEWS is extended by an additional 12 weeks to August 29, 2020 instead of the previously announced end date of June 6, 2020.
- The Government has made regulatory changes to extend eligibility for the CEWS to additional groups. Note that these changes are retroactive to April 11, 2020 which means that they apply to the first qualifying period starting March 15, 2020 and subsequent qualifying periods. The following prescribed organizations can now apply for the CEWS provided they meet all other eligibility criteria:
- Partnerships with one or more non-eligible members: Previously, only partnerships with members who are eligible entities can apply for the CEWS. Now, partnerships will be eligible for the CEWS provided the non-eligible members (taken together) do not hold a majority of the interests in the partnership.
- Indigenous Government-Owned Businesses: Previously, only taxable Indigenous government-owned corporations can apply for the CEWS. Now, the Government is extending the eligibility of the CEWS to include Indigenous government-owned corporations that are carrying on a business and are tax-exempt and their wholly-owned subsidiaries that are carrying on a business and are tax-exempt.
- Registered Canadian Amateur Athletic Associations (RCAAAs): The Government has extended the CEWS eligibility to national-level RCAAAs that are tax-exempt.
o Registered Journalism Organizations: The Government has extended CEWS eligibility to registered journalism organizations that are tax-exempt.
- Non-public Educational and Training Institutions: The Government has extended the CEWS eligibility to private colleges and private schools including non-public educational and training institutions such as for-profit and not-for-profit arts schools, language schools, driving schools, flight schools and culinary schools.
- The Government also announced proposed legislative changes to ensure the CEWS meets its objectives.
- The Government proposes to allow employers to choose one of two periods when calculating the baseline remuneration of their employees.
- The Government proposes to allow corporations formed on an amalgamation of two or more predecessor corporations to calculate benchmark revenue for the CEWS revenue-decline test using combined revenues, unless it is reasonable to consider that one of the main purposes of the amalgamation was to qualify for the CEWS. This change is proposed to be retroactive to April 11, 2020.
- The Government proposes the following in respect of trusts: Where the trust is tax-exempt (other than a public institution), it would qualify for the CEWS only if it is a registered charity or one of the other types of eligible tax-exempt entities and where a trust is a public institution, it would only qualify if it is a prescribed organization. This change is proposed to apply in respect of the third qualifying period (May 10 to June 6) and any subsequent period.
For more information about the program: Canada Emergency Wage Susbidy