As discussed in our July 30, 2020 Canada Emergency Wage Subsidy (CEWS) update, the Department of Finance recently released new legislation to extend the CEWS eligibility periods as well as substantially change the method of calculating the subsidy for Claim Period 5 and subsequent periods.

On August 11, 2020, CRA released a new online calculator to assist eligible employers prepare to apply for the next period of the CEWS program (July 5, 2020 – August 1, 2020). Applications for this period may be submitted beginning on August 17, 2020.

The new CEWS calculator can be found on CRA’s CEWS web page. The calculator provides step-by-step instructions for entering the relevant information in order to provide an estimate of the subsidy they can expect to receive.

The information required to complete the calculation includes:

• Eligible revenue for April – July 2020;

• Eligible revenue for the relevant prior reference periods (i.e. January 2020 and February 2020 or April – July 2019);

• Average weekly baseline remuneration per eligible employee;

• Weekly or bi-weekly eligible remuneration per employee;

• EI/CPP contributions paid for furloughed employees.

The new calculator can also be used for CEWS claims for Periods 1 to 4. Although the calculation method for these periods is unchanged, the new legislation provides additional options for the determination of baseline remuneration for these periods. Specifically, the pay periods that may be chosen when calculating an employee’s baseline remuneration now vary depending on the claim period. Accordingly, the baseline remuneration period that has the highest weekly average for an employee may be chosen. These additional choices were not available when CEWS was first introduced, but the change is retroactive to Claim Period 1. Therefore, it may be beneficial to consider an adjustment to a previously submitted claim.

CRA has updated its FAQ regarding CEWS as of August 11, 2020 to reflect the changes to the CEWS program.

Please contact your Shimmerman Penn advisor for further guidance and to discuss your particular situation.

The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Accordingly, the information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. While we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Again, no one should act upon any information contained herein without seeking appropriate professional advice after a thorough examination of their particular situation.