Prime Minister Justin Trudeau announced the new online tool on Tuesday and confirmed what government officials said to the House of Commons finance committee last week: that requests for CEWS will begin to be accepted on Monday. Applications will be submitted on the Canada Revenue Agency (CRA) website.
First payments of $ 73 billion in wage subsidy for coronaviruses to be sent in early May
All businesses – large or small, for-profit or not-for-profit – can apply for the program and, if successful, could receive 75 percent of their employees’ wages, up to a maximum of $ 847 per week per employee, paid by the federal government for up to 12 weeks. The CRA website with the online calculator also provides detailed information to applicants to define which employers are eligible and how they should count employees who are eligible.
The program is expected to cost the federal treasury $ 73 billion this year, about three times the amount the federal government spends in one year on national defense. The government’s other major rescue program – the Canadian Emergency Response Service (CERB) – is expected to cost approximately $ 24 billion this year. The CERB, which pays a lump sum of $ 500 per beneficiary, is already paid to more than 8 million Canadians.
And while the federal government will pay 75% of an employee’s salary, employers are encouraged to pay as much of the remaining 25% of an employee’s salary as possible. Trudeau said employers who try to abuse the program will face severe penalties.
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President of the Treasury Board Jean-Yves Duclos told reporters on Tuesday that he expected 90% of the requests to be processed by May 5, with payments made thereafter. Direct deposit people usually see payments within two to three days. Companies can request to cover wages retroactively until March 15.
“This is the most important economic program the federal government has ever designed or implemented,” said Duclos.
Air Canada to Apply for Wage Subsidy Program to Maintain Payroll of Workers in COVID-19 Pandemic
The goal of the program is to get companies to re-hire workers they may have already laid off or to prevent employers from having to lay off workers. And, if it succeeds, it could mean that some Canadians will give up CERB and return to the payroll subsidized by their employer, where they may also be eligible for other benefits such as pension contributions and continuing medical plans.
Any wage subsidy paid to a business will be treated as business income for tax purposes.
Air Canada and WestJet are among the most prominent companies to already announce that they will take advantage of CEWS to bring back thousands of workers laid off last month.
Trudeau was asked if his government would do what certain European governments do and ban federal grants to any business doing business in Canada with its registered office in an offshore tax haven. And although he did not respond directly, he said that CEWS was intended to help workers in Canada.
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