CEWS

Expanded Eligibility to Lockdown Support Programs

On December 22, 2021 the government announced that it will:

  • Expand the Local Lockdown Program to include employers subject to capacity-limiting restrictions of 50% or more; and reduce the current-month revenue decline threshold requirement to 25% (it was previously 40%). Eligible employers will receive wage and rent subsidies from 25% up to a maximum of 75%, depending on their degree of revenue loss. The rate of subsidy will continue to be calculated on a 1:1 basis (e.g. 25% revenue decline = 25% subsidy). The 12-month revenue decline test continues to not be required in order to access this support.

  • Expand the Canada Worker Lockdown Benefit to include workers in regions where provincial or territorial governments have introduced capacity-limiting restrictions of 50% or more. Furthermore, these regulatory changes would include reducing the minimum number of days a lockdown order needs to be in place to meet the new definition to 7 consecutive days, down from 14 consecutive days. As announced previously, this benefit will provide $300 a week in income support to eligible workers who are directly affected by a COVID-19-related public health lockdown, and who have lost 50% or more of their income as a result.

These updated regulations will apply from December 19, 2021, to February 12, 2022, during which time it is expected that public health authorities will continue to implement “circuit-breaker” restrictions that limit the spread of the Omicron variant of COVID-19 across Canada.

Backgrounder

Application Portal for Modified Rent and Wage Subsidies Now Open

On December 21, 2021, the government of Canada announced that Bill C-2, which included extensions and updates to COVID-19 business subsidies, received Royal Assent. 

Numerous CRA webpages and resources have been updated to reflect these legislated changes. Applications for period 22 (Oct 24 – Nov 20, 2021) are now open for the following programs:

Once an applicant has determined that they are eligible for a subsidy pursuant to one of the aforementioned program criteria, applications for the wage and rent subsidies must be made separately.

Useful links:

CEWS/CERS Periods 14 to 17 revenue Comparison Change

The September 1, 2021 Canada Gazette published Regulations (Regulations Subsections 8901.2(2) and (3)) to implement the July 30, 2021 announcement that eligible entities which on March 1, 2019 were not carrying on business, or otherwise not carrying on their ordinary activities, would be permitted to elect to use the alternative approach for periods 14 to 17 (March 14 to July 3, 2021) if they chose the general approach for CEWS or CERS claims in period 5 or later. The 180-day deadline for applications or increases for period 14, which ended on April 10, 2021, will expire on October 7, 2021.

Amending a CEWS Claim After the Deadline

On April 21, 2021, CRA updated their CEWS FAQ to provide additional commentary on amending applications after the applicable deadline has passed. Previously, CRA had stated that upward adjustments (increases to claims) subsequent to the deadline would not be permitted, however, this new guidance provides parameters in which they would be. The CERS website notes that these comments would apply to CERS claims as well.

CRA’s detailed responses include:

26-01. Under what circumstances will the CRA accept my late-filed amended application for the wage subsidy? 

The CRA will accept your late-filed amended wage subsidy application in certain circumstances.

If you determine that you received a wage subsidy amount in excess of what you are entitled to then you can submit an amended application to reduce your wage subsidy amount (referred to as a downward adjustment) at any time, even after the deadline for the particular claim period. You can submit your amended application using My Business Account or Represent a Client, or by calling Business Enquiries if you filed via the web application.

If, after the deadline for a claim period has passed, you determine that you might have been entitled to a higher wage subsidy amount than what you previously claimed for that claim period, contact the CRA Business Enquiries phone line to see if you are eligible to file an amended application to increase the wage subsidy amount (referred to as an upward adjustment) after the applicable deadline. If you are eligible, you can then submit your amended application using My Business Account or Represent a Client, or by obtaining further direction from Business Enquiries if you filed via the web application.

The circumstances in which the CRA may accept your amended application for review after the filing deadline include:

  • You made an error in filing your wage subsidy application prior to the filing deadline as a result of an arithmetic error, transposition error, or unintended omission of additional business activities or employment expenses;

  • You relied upon inaccurate information provided to you inadvertently by the CRA that directly affected your ability to file your amended wage subsidy application on time;

  • There was an identified outage of CRA secure portals that prevented you from filing the amended application prior to the applicable deadline; or

  • There was undue delay on the part of the CRA in processing an application or providing required guidance impacting the particular application.

Furthermore,

  • The upward adjustment request is not the result of professional advice the fee structure for which was dependent on the upward adjustment amount; and

  • The late-filed amended wage subsidy application request for an upward adjustment was made to the Business Enquiries phone line within 30 calendar days following the later of:

    • April 21, 2021; and

    • The applicable filing deadline.

In the case of late-filed amended wage subsidy application that is accepted for review through the secure portal, and after the review is either accepted, adjusted or denied, a Notice of Determination will be issued to you by the CRA. Please see Q #36 for an explanation of your recourse rights when you receive a Notice of Determination.

If your late-filed amended wage subsidy application was rejected for review by the CRA and not processed through the secure portal because you did not meet one of the above noted criteria, you may then seek a further review by submitting your request online by logging into My Business Account and selecting “Register a formal dispute”.

26-02. Under what circumstances will the CRA accept my late-filed original application for the wage subsidy? 

The CRA will accept your late-filed wage subsidy original application only in exceptional circumstances. You must make every attempt to file your wage subsidy application on or before the deadline. If, however, you determine that you are entitled to a wage subsidy amount for a particular claim period for which you did not file an application on or before the applicable filing deadline, contact the CRA Business Enquiries phone line to see if you are eligible to file the application after the applicable deadline. If you are eligible, you can then submit your late-filed application using My Business Account, Represent a Client or via the web application.

The circumstances in which the CRA may accept your original application for review after the filing deadline include:

  • It is evident that you attempted to file your application before the applicable deadline but there was an identified outage of CRA secure portals that prevented you from filing the application prior to the applicable deadline;

  • It is evident that you attempted to file your application before the applicable deadline but your specific account was temporarily suspended or there was some other account limitation that prevented the filing of the application prior to the applicable deadline;

  • It is evident that you attempted to file your application before the applicable deadline, and there was undue delay on the part of the CRA in receiving and processing your wage subsidy application before the deadline; or

  • You relied upon inaccurate information provided to you inadvertently by the CRA that directly affected your ability to file your original wage subsidy application on time.

Furthermore,

  • The late filed wage subsidy claim is not the result of professional advice the fee structure for which was dependent on the claim amount; and

  • The late-filed wage subsidy application request was made to the Business Enquiries phone line within 30 calendar days following the later of:

    • April 21, 2021; and

    • The applicable filing deadline.

In the case of a late-filed wage subsidy application that is accepted for review through the secure portal, and after the review is either accepted, adjusted or denied, a Notice of Determination will be issued to you by the CRA. Please see Q #36 for an explanation of your recourse rights when you receive a Notice of Determination.

If your late-filed wage subsidy application was rejected for review by the CRA and not processed through the secure portal because you did not meet one of the above noted criteria then you may seek a further review by submitting your request online by logging into My Business Account and selecting “Register a formal dispute”.

CEWS FAQ Update

In early March, 2021, CRA updated a number of its CEWS webpages.

Calculation - for periods 14-16:

  • the maximum wage subsidy rate for active employees will remain at 75%

  • the revenue drop will continue to compare your eligible revenue to a time prior to March 2020 (specific comparison months and years are listed for each claim period)

  • you may use a new pre-crisis pay period when calculating an employee’s pre-crisis pay (baseline remuneration) for the new claim periods

  • the maximum subsidy amount for employees on leave with pay will remain at $595

Baseline remuneration - election possibilities for periods 14 to 16 include:

  • January 1 to March 15, 2020 (75 days)

  • March 1 to June 30, 2019 (122 days)

  • July 1 to December 31, 2019 (184 days)

  • if the employee was on certain kinds of long-term leave from July 1, 2019, to March 15, 2020, the 90-day period ending before the leave started