The federal government has announced major changes to its 75% wage subsidy designed to make more businesses eligible for the crisis support.
With the physical distancing requirements imposed by the government and the closure or restriction of various types of businesses, many Burnaby employers are facing plummeting revenues and are not able to continue to employ and pay staff.
The Canada Emergency Wage Subsidy will provide eligible businesses with a subsidy of 75% of their wages payable, up to a maximum of $847 per week per employee.
1) To be eligible, businesses will now have to show only a 15% decline in March revenues, whereas previously it required a 30% decline. This is in recognition that many businesses only felt the impacts of COVID-19 in the second half of last month. The threshold for April and May continues to be a 30% decline.
2) Businesses can now choose to compare their revenues for March, April or May with either the same month last year, or with the average of their revenues in January and February of this year. This is an important change that allows new businesses that don’t have a 2019 comparison, and growing business that have increased revenues significantly over 2019, to still have access to this benefit.
3) Businesses can now choose to recognize revenue either on a cash basis or on an accrual basis, depending on what makes more sense for each business. This is an important clarity that reflects the differences in accounting methods used by businesses to show revenues.
4) Hidden in the changes is a new 100% rebate of the employer-paid contributions to the Canada Pension Plan and Employment Insurance programs – but only for workers who are furloughed or being paid but not required to work. This is meant to encourage businesses to re-hire staff, even if there is no work for them to do, so that the workers can continue to be paid and stay connected to the employer. Keeping employees engaged with companies will be important for when we reopen the economy.
This program is not without flaws, and the Burnaby Board of Trade is still pushing for broader and faster supports for business, but the 75% wage subsidy with these new changes will help many more businesses continue to operate.
Information on the 75% Wage Subsidy and other government programs is available online at the Burnaby Board of Trade’s COVID-19 Updates page: bit.ly/BBOTCOVID.
The Burnaby Board of Trade is Burnaby’s chamber of commerce, and is a catalyst for economic growth, the convener of business and community leaders, and a champion for the interests of local businesses.