Categories > Covid-19

CEWS Update

April 8, 2020

Travis D. McKay
Hillenbrand Kozicki LLP


This blog is an update to the blog we posted on April 2, 2020 related to COVID-19 funding from the Government of Canada.

This morning, the Federal Government announced that it would be relaxing a few of the eligibility requirements for the Canadian Emergency Wage Subsidy (“CEWS”) That is the 75% wage subsidy.




  • Revenue Drop REDUCED from 30% to 15%.


Initially the requirement was that an employer had to have seen a drop of 30% in revenue from March 2019 to March 2020 in order to qualify for the first pay period of March 15th to April 11th and a subsequent 30% drop in revenue to qualify for further Pay Periods.

Today, the government announced an employer need only see a 15% drop in revenue to qualify for the CEWS.



  • Bench Mark Month: January, February OR March 2020


Further, the Government announced that in addition to using March 2020 as a benchmark, an employer may use January or February of 2020 as a benchmark for determining eligibility.

So, an employer that has seen a 15% drop in Revenue for any of the following:

March 2020 vs. March 2019, February 2020 or January 2020

Will be eligible to claim the CEWS for the pay period of March 15th to April 11th.

For the further Pay periods the employer will still be required to show a 30% drop.

Small Business Financial Assistance for Covid-19


Hillenbrand Kozicki


DATE: April 2, 2020


RE: Newest Employer Subsidy Program

Here is the latest information from the federal government regarding the wage subsidy that was announced last week with some more details that are key.


Canadian Emergency Wage Subsidy (“CEWS”)

The subsidy is a wage subsidy that pays 75% of employee wages up to a maximum subsidy of $873 per week per employee (achieved by an employee making $58,700 annually or $1,129 weekly). There is no limit on the number of employees who are eligible to receive the subsidy.


Eligibility Requirements

To be eligible an employer must have seen a 30% drop in revenue from the same month in 2019.

There are 3 pay periods, an employer must qualify with a 30% revenue drop in each reference period to be eligible for the subsidy in the corresponding pay period.


Pay Period # Reference Period Pay Period
1 March 2020 v. March 2019 March 15- April 11
2 April 2020 v. April 2019 April 12 – May 9
3 May 2020 v. May 2019 May 10-June 6


For example: an employer that saw a revenue drop of 30% from March 2019 to March 2020 would be eligible to receive the subsidy for employee wages paid from March 15 to April 11.

The government has said there will be exceptions for new employers who are growing rapidly and/or did not have revenue in February 2019. The government has stated in those cases the revenue drop will be compared against a “reasonable benchmark”. 

There are additional rules for non-arm’s length employees. i.e. Employees who are also shareholders or related to shareholders of the corporation. For those employees the subsidy is still available but limited to wages equal to what the employee was paid before the COVID-19 crisis began.

The subsidy is also available for new employees who are hired during the COVID-19 crisis so long as the revenue requirements are still met by the employer. 

The subsidy pays 75% of each employees’ salary up to a maximum subsidy of $873 per week. This means the subsidy is maximized for employees making $58,700 a year or $1,129 per week. 


How to Apply

Applying for the subsidy is done through the Canadian Revenue Agency website through the “My Business” portal.



The government has announced employers can start applying “soon”; the exact date is not known but expected to be no later than April 6th. From there the government expects to start making subsidy payments in 3-6 weeks with 6 weeks being a “worst case scenario”. 

To maximize the speed in which employers receive the subsidy they should apply as soon as they can and sign up for direct deposit of subsidy funds. 


Records to Keep

It is important that all employers keep records establishing that its revenue dropped by at least 30% between the relevant reference periods as well as records of employees pay for the pay periods in which the subsidy applies. Further, records of employee wages paid to each employee must be kept.

The details on enforcement are not clear yet but the government has issued several warnings that those employers who attempt to abuse the subsidy system will be audited and could face steep penalties.


Canadian Emergency Response Benefit 

Finally, note that an employer cannot claim the wage subsidy for wages paid to an employee in a week that falls within a 4-week period in which the employee claimed the CERB amount of $2,000 available to individuals. Employers should ensure that any employees they are claiming under the 75% subsidy program are not personally claiming the CERB benefit. 


Temporary Wage Subsidy
(The 10% Subsidy)

The initial 10% subsidy that was announced two weeks ago is still available to employers who are eligible. If an employer becomes eligible for the 75% subsidy it will lose access to the 10% subsidy. 

Employers who are not eligible for the 75% subsidy (because they did not see a 30% revenue drop) will maintain eligibility for the 10% subsidy. 


Canadian Emergency Business Account Loans
($40,000 Loans)


The details

Loans will be offered of up to $40,000 to Companies whose payroll for 2019 was:

  • More than $50,000 
  • Less than $1 million

**These numbers must be T4 employment income, not dividends.**

In order to apply you will need your T4 Summary of Remunerations Paid Statement for 2019. If you do not have this yet you can contact CRA for another copy.

You can apply at any financial institution where you have a bank account. However applying at more than one institution will result in prosecution by the federal government.


Loan Terms

  • The Loan is a Line of Credit to Borrow up to $40,000, multiple draws permitted. 
  • Interest free until December 31, 2022;
  • 25% of the loan (up to $10,000) is eligible for forgiveness if the loan is completely repaid before December 31, 2022;
  • After December 31, 2022 the loan is convertible to a 3-year term loan charging interest at a rate of 5% per year.
  • Borrowers can start repaying the loan at anytime but no payments are required until December 31, 2025.

From a review of the terms above it seems like many businesses that meets the payroll requirements of between $50,000 and $ 1 million will want to consider applying for this loan. 

The Applications will be available online from the various banks starting April 6, 2020.

In the interim, now would be the time to be gathering the following for employers considering applying:

  • 2019 Statement of Remunerations Paid
  • Confirming your T-4 payroll was between $50,000 and $1 million
  • Contacting your current bank to ensure they are going to have applications ready early next week.



All employers should be reviewing the qualifying requirements for:

  • The 75% Wage Subsidy (CEWS);
  • The 10% Wage Subsidy (TWS); and
  • The Emergency Loan (CEBA) programs

Many employers will likely want to apply for same. The ability to apply should be available shortly. In the interim all employers should be reviewing and preparing the following:

  • Reviewing revenue totals for March 2019 and March 2020 to determine if the employer experienced at least a 30% drop.
    • Ensuring that supporting documentation for revenue numbers is available and kept in a secure location should it need to be referenced. 
  • Reviewing revenue totals from April and May 2019 in anticipation of applying for these reference periods as well.
  • Preparing a list of all employees who were paid from March 15 thru April 11 and an anticipated calculation of pay per employee and subsidy available per employee.
  • Ensuring the employer’s CRA Account is setup for online access.
    • Ensuring that the employer is set up with direct deposit to speed up the eventual payment of subsidy funds.

As always this is a rapidly evolving situation. Let me know if you have any specific questions. 

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