{"id":3280,"date":"2020-07-21T09:00:36","date_gmt":"2020-07-21T13:00:36","guid":{"rendered":"http:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/?p=3280"},"modified":"2020-08-06T13:08:54","modified_gmt":"2020-08-06T17:08:54","slug":"update-cews-expansion","status":"publish","type":"post","link":"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/update-cews-expansion\/","title":{"rendered":"UPDATE \u2013 CEWS Expansion"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][basic_container container_size=&#8221;container container-narrow&#8221; bg_overlay=&#8221;overlay-light&#8221;][vc_single_image image=&#8221;2736&#8243; img_size=&#8221;large&#8221;][\/basic_container][basic_container container_size=&#8221;container container-narrow&#8221;][vc_column_text]<\/p>\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<h4>CEWS Program Expands Eligibility<\/h4>\n<p>On July 17, 2020, draft legislation was released related to the previously announced extension of the Canada Emergency Wage Subsidy (\u201cCEWS\u201d). The legislation contemplates significant changes to the CEWS program beginning with period 5 (which commenced July 5, 2020) that are intended to expand eligibility to all employers with revenue declines, including those that do not meet the previous threshold of 30%. The 30% revenue decline threshold still applies for periods 1 through 4 (March 15 to July 4, 2020).<\/p>\n<p>Below is a brief overview of the significant changes. For full details see <a href=\"https:\/\/www.canada.ca\/en\/department-finance\/news\/2020\/07\/adapting-the-canada-emergency-wage-subsidy-to-protect-jobs-and-promote-growth.html\">https:\/\/www.canada.ca\/en\/department-finance\/news\/2020\/07\/adapting-the-canada-emergency-wage-subsidy-to-protect-jobs-and-promote-growth.html<\/a><\/p>\n<h4>What has changed?<\/h4>\n<p><strong><em>Subsidy Extension<\/em><\/strong><\/p>\n<p>It was announced in early July 2020 that the CEWS would be extended to December 19, 2020; however, the draft legislation released on July 17th only provides details to November 21, 2020. Presumably, the government will address this anomaly in the near future.<\/p>\n<p>Eligible employers will now have until January 31, 2021 to apply for CEWS.<\/p>\n<p><strong><em>Subsidy rate structure and eligibility thresholds<\/em><\/strong><\/p>\n<p>The draft legislation proposes extensive changes to the subsidy rate and revenue thresholds. Effective for periods starting July 5, 2020 (claim period 5), CEWS for eligible employees who are active, i.e., not furloughed, will continue in two parts: a base CEWS and a top-up CEWS.<\/p>\n<ul>\n<li><strong>Base CEWS<\/strong>: rate of base CEWS will vary depending on the level of revenue decline as noted below. The maximum base CEWS results where revenue declines 50% or more as compared to the reference period (see below for details).<\/li>\n<\/ul>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>[\/vc_column_text][vc_single_image image=&#8221;3284&#8243; img_size=&#8221;full&#8221;][vc_column_text]<\/p>\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<ul>\n<li><strong>Top-up CEWS<\/strong>: <u>up to<\/u> an additional 25% subsidy is available where revenue decline is greater than 50% as compared to the average of the immediately preceding 3 months (see below for details).<\/li>\n<\/ul>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>[\/vc_column_text][vc_single_image image=&#8221;3285&#8243; img_size=&#8221;full&#8221;][vc_column_text]<\/p>\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<p>The maximum available subsidy for periods 5 and 6, with the top-up, is 85% of eligible remuneration to a maximum of $960 per week. For periods 7, 8 and 9 the maximum subsidy, with top-up, is 75%, 65% and 45%, respectively.<\/p>\n<p>A \u201csafe harbour\u201d rule ensures that, for claim periods 5 and 6 (only) eligible employers will be entitled to at least the 75% CEWS rate available under the period 1 through 4 rate structure (see our summary of original CEWS program for further details <a href=\"https:\/\/www.davismartindale.com\/updated-cews\/\">https:\/\/www.davismartindale.com\/updated-cews\/<\/a> ). For example, if the eligible employer qualified under original CEWS program for the 75% CEWS, the CEWS rate that could be claimed for periods 5 and 6 will be the greater of 75% and the amount determined under the new CEWS rate structure.<\/p>\n<p>Under a separate CEWS rate structure for furloughed employees, the subsidy calculation will remain the same for claim periods 5 and 6 as it was for periods 1 to 4. Beginning in period 7, CEWS for furloughed employees will be adjusted to align with CERB and\/or EI benefits.<\/p>\n<p><strong><em>Reference periods<\/em><\/strong><\/p>\n<p>Under the original CEWS legislation, the prior reference period against which revenue declines are measured is the current month compared to the same month in 2019 (general approach), unless the employee elected to compare the current month revenue to that of the average of January and February 2020 (alternative approach). Employers are bound to the chosen approach for all of claim periods 1 through 4. The draft CEWS legislation allows employers to effectively change their choice of prior reference period \u2013 using the general approach or alternative approach \u2013 for claim periods 5 through 9, if desirable. Once again, whichever approach is chosen for claim period 5 must be used for the remaining claim periods.<\/p>\n<ul>\n<li>Reference period \u2013 Base CEWS:<\/li>\n<\/ul>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>[\/vc_column_text][vc_single_image image=&#8221;3282&#8243; img_size=&#8221;full&#8221;][vc_column_text]<\/p>\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<ul>\n<li>Reference period \u2013 Top-up CEWS:<\/li>\n<\/ul>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>[\/vc_column_text][vc_single_image image=&#8221;3283&#8243; img_size=&#8221;full&#8221;][vc_column_text]<\/p>\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<div id=\"page\" class=\"wrapper\">\n<div class=\"rows\">\n<div id=\"post-27655\" class=\"post-27655 post type-post status-publish format-standard has-post-thumbnail hentry category-firm-news\">\n<div class=\"site-content container pt pb clearfix\">\n<article id=\"primary-wrapper\" class=\"column eight\">\n<div class=\"inner\">\n<div class=\"post-blog\">\n<div class=\"clearfix\">\n<article class=\"entry-content clearfix\">\n<div class=\"entry-text clearfix\">\n<p><em><strong>Eligible employees<\/strong><\/em><\/p>\n<p>The definition of \u201celigible employee\u201d has been modified for claim periods 5 and on such that an employee is permitted to be without remuneration for 14 or more consecutive dates in a qualifying period. For claim periods 1 to 4, an eligible employee cannot be without pay for 14 or more consecutive days.<\/p>\n<p><em><strong>Baseline remuneration<\/strong><\/em><\/p>\n<p>Commencing with claim period 5, eligible remuneration is no longer tied to baseline remuneration for arm\u2019s length employees. The amount of remuneration for active arm\u2019s length employees will be based solely on actual remuneration paid in respect of the period.<\/p>\n<p>For active non-arm\u2019s length employees, the wage subsidy for period 5 and subsequent periods will be based on employee\u2019s weekly eligible remuneration or pre-crisis remuneration, whichever is less, up to a maximum of $1,129. For period 5 and subsequent periods, pre-crisis remuneration is based on the average weekly remuneration paid from Jan 1 to March 15, 2020, or from July 1, 2019 to Dec 31, 2019. The method chosen can be made on an employee by employee basis.<\/p>\n<h4>What has not changed?<\/h4>\n<ul>\n<li><strong>Periods 1 \u2013 4<\/strong>: No changes were announced related to the first 4 qualifying periods. Please see our previous post on eligibility https:\/\/www.davismartindale.com\/updated-cews\/<\/li>\n<li><strong>Eligible remuneration<\/strong>: There are no proposed changes to the definition of eligible remuneration.<\/li>\n<li><strong>Maximum overall subsidy per employer<\/strong>: There is no overall limit on the amount of subsidy that an eligible employer can claim<\/li>\n<li><strong>Taxability of CEWS<\/strong>: CEWS is taxable to the eligible employer<\/li>\n<li><strong>Revenue methodology<\/strong>: Eligible employers are allowed use of accrual or cash method to compute revenues for purposes of CEWS eligibility when an election is filed.<\/li>\n<li><strong>Furloughed employees:<\/strong> The employer portion of EI and CPP in respect of furloughed employees will continue to be refunded to the employer.<\/li>\n<\/ul>\n<h4>Other announcements<\/h4>\n<p>The draft legislation also encompassed other previously announced changes including:<\/p>\n<ul>\n<li>Providing continuity rules for revenue declines on an asset purchase of a businesses or on an amalgamation<\/li>\n<li>Allowing prescribed organizations that are registered charities or non-profit organizations to choose whether to include government source revenue in computing revenue declines<\/li>\n<li>Allowing entities that use the cash method of accounting to elect to use accrual based accounting in computing revenue<\/li>\n<li>Allow employers with paymaster arrangements to qualify<\/li>\n<li>Provide an appeals process based on the existing procedure for notices of determination<\/li>\n<\/ul>\n<h4>CEWS Application Note<\/h4>\n<p>The CEWS application has been recently updated such that the applicant is required to indicate whether any elections have been made under subsection 125.7(1) or 125.7(4) of the CEWS program. We anticipate this question will be expanded to encompass the revised election options beginning with claim period 5. For period 1 to 4 claims, the applicant must select \u201cyes\u201d where any of the following elections have been made:<\/p>\n<ul>\n<li>a joint election, along with each other member of the group that prepares consolidated financial statements, to determine revenue on a non-consolidated basis for members of the employer\u2019s group (125.7(4)(a))<\/li>\n<li>a joint election, along with each other member of the affiliated group, to determine revenue on a consolidated basis for the employer\u2019s group (125.7(4)(b))<\/li>\n<li>an election for joint ventures (125.7(4)(c))<\/li>\n<li>a joint election, along with each person or partnership with which the employer does not deal at arm\u2019s length and from whom the employer earns all or substantially all of its qualifying revenue under paragraph 125.7(4)(d) of the Income Tax Act<\/li>\n<li>an election to determine revenue using the cash method (125.7(4)(e))<\/li>\n<li>an election to determine the prior reference period using the alternative approach (125.7(1)(b)(ii))<\/li>\n<li>an election by a registered charity or not-for-profit to exclude government funding (125.7(1)(a)(ii) or (b)(ii).<\/li>\n<\/ul>\n<p>If none of these elections have been made, the question should be answered \u201cno\u201d. Form RC661 must be completed to certify and attest that the wage subsidy application is complete and the appropriate elections have been made (or no election is required).<\/p>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>[\/vc_column_text][\/basic_container][vc_empty_space][vc_empty_space][basic_container container_size=&#8221;container container-narrow&#8221;][vc_separator border_width=&#8221;5&#8243; el_width=&#8221;70&#8243;][\/basic_container]<div class=\"clearfix global-margin-y\"><\/div>[\/vc_column][\/vc_row][vc_row][vc_column][basic_container]<div class=\"post-listing blogs-items blogs-no-category-sidebar blogs-items-layout-\"\">\r\n\t\t\t\t\t\t\t\t\t<a class=\"post-listing__item\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/tax-payments-extended\/\">\r\n\t\t\t\t<div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t<h2 class=\"h3 post-listing__item__title\">\r\n\t\t\t\t\t\tCRA Announces Extension\t\t\t\t\t<\/h2>\r\n\r\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"post-listing__item__meta\">\r\n\t\t\t\t\t\t\tJuly 29, 2020\t\t\t\t\t\t<\/div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t<p>Payment deadlines extended and interest relief on outstanding debts. Payment deadline extension to September 30. The CRA is extending the payment due date for individual, ...<\/p>\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\t<span class=\"btn btn-primary btn-sm post-listing__item__button\">Read More<\/span>\r\n\t\t\t\t\t\t\t<\/a>\r\n\t\t\t\t\t\t\t\t<a class=\"post-listing__item\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/update-cews-expansion\/\">\r\n\t\t\t\t<div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t<h2 class=\"h3 post-listing__item__title\">\r\n\t\t\t\t\t\tUPDATE \u2013 CEWS Expansion\t\t\t\t\t<\/h2>\r\n\r\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"post-listing__item__meta\">\r\n\t\t\t\t\t\t\tJuly 21, 2020\t\t\t\t\t\t<\/div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t<p>CEWS Program Expands Eligibility On July 17, 2020, draft legislation was released related to the previously announced extension of the Canada Emergency Wage Subsidy (\u201cCEWS\u201d). ...<\/p>\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\t<span class=\"btn btn-primary btn-sm post-listing__item__button\">Read More<\/span>\r\n\t\t\t\t\t\t\t<\/a>\r\n\t\t\t\t\t\t\t\t<a class=\"post-listing__item\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/accounting-for-bravery-thank-you-frontline-healthcare-workers\/\">\r\n\t\t\t\t<div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t<h2 class=\"h3 post-listing__item__title\">\r\n\t\t\t\t\t\tThank You To Our Frontline Healthcare Workers\t\t\t\t\t<\/h2>\r\n\r\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"post-listing__item__meta\">\r\n\t\t\t\t\t\t\tJune 1, 2020\t\t\t\t\t\t<\/div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t<p>Thank you again to our frontline workers for their courage, continued support, and dedication to our community during this very difficult time. We were grateful ...<\/p>\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\t<span class=\"btn btn-primary btn-sm post-listing__item__button\">Read More<\/span>\r\n\t\t\t\t\t\t\t<\/a>\r\n\t\t\r\n\t\t\t\t\t<div class=\"blogs-paging\">\r\n\t\t\t\t<div class=\"nav-previous\"><\/div>\r\n\t\t\t\t<div class=\"blog-page-count\">\r\n\t\t\t\t\t<a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/\">1<\/a><a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/page\/2\/\">2<\/a><a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/page\/3\/\">3<\/a><a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/page\/4\/\">4<\/a><a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/page\/5\/\">5<\/a><a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/page\/6\/\">6<\/a><a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/page\/7\/\">7<\/a><a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/page\/8\/\">8<\/a><a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/page\/9\/\">9<\/a><a class=\"page-count-link\" href=\"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/wp-json\/wp\/v2\/posts\/3280\/page\/10\/\">10<\/a><a class=\"page-count-link\" 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[&#8230;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25,13],"tags":[],"class_list":["post-3280","post","type-post","status-publish","format-standard","hentry","category-covid-19-2","category-davis-martindale-updates"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>UPDATE \u2013 CEWS Expansion - Davis Martindale<\/title>\n<meta name=\"description\" content=\"On July 17, 2020 the Canada Emergency Wage Subsidy expanded eligibility. 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