The ongoing COVID-19 pandemic is presenting significant financial challenges for businesses, charities and non-profit organizations, all of which are struggling to retain staff in the face of falling revenues.
The federal government has announced a new wage subsidy to support these businesses and organizations and their staff. Finance Minister Bill Morneau announced the following guidelines for the Emergency Wage Subsidy program:
- The entity applying for the program must demonstrate a 30% decline in “gross” revenues to qualify.
- Entity must compare revenues to same month from last year to show drop. For instance, if you had a 30% drop in revenues in March 2020, you would have to show revenues for March 2019 as a comparison point.
- Entity can claim up to 75% of salary up to $58,700 per year (up to $847 per week), per employee.
- All employees are eligible.
- Available to non-publicly funded businesses, non-profits, and charities.
- Fine-tuning and context are still needed from government. Advocacy required to make sure reasonable cases are included. There is flexibility for non-profits and charities with the 30% formula, and it sounds like they are working to develop a different approach for our sector. Still awaiting details.
- Retroactive March 15th, currently available until June.
- Application will be done through a Canada Revenue Agency portal (MyCRA or separate web-based platform and CRA is still developing application and questionnaire)
- The portal should be set up in 3-6 weeks, and payments will take a further few weeks after application approval.
- Employer will have to attest they are doing everything they can to pay 25% to employees, presumably by formal attestation (they are still working through this piece)
- Currently, the entity will have to re-apply each month
- Wages will be provided by direct deposit into entity’s bank account, (from government to employer, then it is on the employer to give to the employee)
- “High Trust” placed on entity’s shoulders as the applicant
- Bad actors will have “decisive action” taken against them, with possible penal consequences
- Entities must have eye toward reasonable due diligence and record keeping. You need to show your calculations for the 30% decline.
- Need to show decline in gross revenues, and that funds are being transferred to workers