Wage subsidy 2.0

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Update for November 19, 2020
On November 19, 2020, the government passed new legislations, enhancing the wage subsidy. These were the updates:

  • The subsidy is being extended to June 2021, though details have only been announced through December 19, 2020

  • The maximum base subsidy has been increased to 40% through December 19, 2020

  • The calculation of the revenue decrease for the top-up subsidy is being aligned with the base subsidy, with a safe harbour provision, for Period 8 onwards (September 27 onwards)

This blog post has been updated for these changes

The Canada Emergency Wage Subsidy has been overhauled. This post outlines how to calculate the wage subsidy for Period 5 onward (from July 5, 2020 onward). For details on the previous version of the Wage Subsidy, read our blog post.

About the Wage Subsidy

  • The program has been overhauled, with significantly different – and more complex – rules 

  • The subsidy has been extended to June 2021, though details have only been announced through December 19, 2020

  • The subsidy will generally be less, but more employers will qualify

  • This is great news for clinics that are starting to grow but still have lower revenue than last year

  • The program remains open only to employers – including incorporated professionals who pay themselves a salary – so sole proprietors without employees remain ineligible

What you need to know

  • The same rules continue to apply for the first four periods (March 15 to July 4)

  • Effective Period 5 (July 5) onward, the subsidy will be divided into a base subsidy, with the subsidy amount depending on your revenue decrease, plus a top-up subsidy for employers with a revenue decrease greater than 50%

  • Any eligible employer with any decrease in revenue qualifies for the base subsidy

  • For Periods 5 and 6 (July 5 to August 29), the subsidy will be at least as generous as under the old rules (i.e., a 75% subsidy for employers with a 30%+ revenue decrease)

The base subsidy

  • The maximum subsidy will initially be 60% of eligible remuneration – for employers with a 50%+ decrease in revenue – decreasing to 40% through Period 10 (Nov 22 to Dec 19)

  • For employers with a less than 50% revenue decrease, the subsidy will be smoothly phased out – but any eligible employer with a revenue decrease will be eligible for some amount of support

The top-up subsidy

  • Employers with a 50%+ decrease in revenue would be eligible for a top-up subsidy, in addition to the base subsidy

  • The top-up subsidy is based on the average revenue decrease over the past three months or past month, depending on the period

  • The amount of top-up subsidy is gradually increased for revenue decreases from 50%-70%, with a maximum top-up subsidy of 25%

HBA’s Application Guide

This is a really complex program and the process for determining the amount of the subsidy is significantly different from the previous rules.

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