CEWS Laws

Question 1

How long will it take for businesses to receive CEWS funding?

Answer 1

One month

Question 2

Who qualifies as an eligible employer

Answer 2

1. Corporation
2. Individual
3. Partnership
4. Charity and Not for Profit
5. Prescribed Organization

Question 3

What are prescribed organizations

Answer 3

Not defined, but the provision affords the government flexibility to add circumstances that it did not consider

Question 4

What must eligible employers demonstrate to qualify for CEWS

Answer 4

Revenues have declined by more than the requisite percentage during the months in question when compared to a reference period.

Question 5

What is the required revenue percentage reduction for months March through May

Answer 5

1. March - 15%

2. April and May 30%

Question 6

What is the reference period from March to May

Answer 6

Same month in 2019 or Average of January and February 2020

Question 7

Deeming rules for CEWS revenue

Answer 7

If the revenue test is satisfied for the first month, employer is deemed to satisfy for the subsequent month

Question 8

What is revenue defined as?

Answer 8

1. Inflow of cash
2. Receivables
3. Other consideration

*Special rules for non-arm’s length revenue

Question 9

What is the revenue test for assessing non-arm’s length sources

Answer 9

Where all or substantially all of an eligible employer’s revenues originate from NAL sources, the test is based on the decline of a certain percentage.

Question 10

Election to calculate revenue

Answer 10

Employers can elect to use either a cash or accrual basis for calculating revenue. The election applies for the whole period.

Question 11

What are methods a corporation can calculate revenue

Answer 11

• May calculate revenue on a consolidated or - standalone basis
• Applies for each period
• Applies for all entities in the group

Question 12

Which employees do not qualify under CEWS?

Answer 12

• those receiving CERB benefits, however, may receive CEWS if laid off and re-hired
• certain non-arm’s length employees

Question 13

What qualifies as eligible remuneration

Answer 13

1. Salary
2. Wages
3. Other remuneration
   * Does not include stock option benefits

Question 14

What is defined as baseline remuneration?

Answer 14

Considered the period before the crises.

Referred to as the average weekly remuneration paid between Jan 1 and March 15, and excludes any 7 day period without remuneration.

Question 15

How is the wage subsidy calculated?

Answer 15

1. 75% of the amount of remuneration paid (up to $845/week); and
2. Lesser of the (a) amount of remuneration paid (up to a maximum of 845); or (b) 75% of the employee’s baseline remuneration.

Question 16

What amounts reduce the wage subsidy?

Answer 16

1. The 10% wage subsidy
2. Work share program
3. EI

Question 17

Describe the refund mechanism

Answer 17

CEWS permits a refund of certain payroll contributions to cover EI, QPP, CPP for each week where the employees are on leave with pay for which the employer eligible to claim CEWS

Question 18

What are the penalties under CEWS?

Answer 18

25% for the value of the subsidy claimed if there are artificial transactions

Question 19

What is the tax treatment of the wage subsidy program?

Answer 19

Considered government assistance to be included in the employer’s taxable income. The amount however is not considered revenue for purposes of the revenues tests.