Most significant changes
  1. A base subsidy and a top up for those businesses experiencing a revenue drop exceeding 50%.
  2. ALL businesses experiencing any drop in revenue will be eligible based on a sliding scale. This means that if your revenue drop was less than 30% you can still qualify and keep receiving the subsidy as employees return to work.
  3. Employees who were unpaid for 14 or more days are now included in the calculation.
  4. A Safe Harbour provision ensures employers have access for periods 5 & 6 that is at least as generous as the initial CEWS structure. This means that for Periods 5 & 6, if your revenue dropped at least 30%, your subsidy rate will be at least 75%.
  5. The CEWS rates are applied to a maximum remuneration of $1,129 per week per employee.
  6. The base subsidy will gradually decline over the remaining claim periods ie. in claim period 7, gradually reducing to 20% in Period 9. Note that recent announcements have frozen the current decline until December 19th.
  7. Separate rules will apply to Furloughed Employees
  8. Employers can choose a new Revenue Baseline for Periods 5 thru 10. The choices are the same month in the prior year or an average of January and February 2020. Once the baseline is chosen it must be applied throughout the remaining periods.

BizWize is here to help you navigate the CEWS application process and avoid potentially costly errors.


To be eligible to receive the wage subsidy, you must meet all three criteria:

1. Have had a CRA payroll account on March 15, 2020

Even if you didn’t have a payroll account on March 15, you may still qualify if

  • You used a payroll service provider who made remittances on your behalf
  • You purchased all (or almost all) of another person’s or partnership’s business assets
2. Be one of the following types of employers
3. Have experienced a drop in revenue
  • Your drop in revenue is calculated by comparing your eligible revenue during the crisis with your eligible revenue from a previous period (baseline revenue).
  • For claim periods 5 and later (claims that cover July 5, 2020, and later), there is no minimum revenue drop required to qualify for the subsidy. The rate your revenue has dropped is only used to calculate how much subsidy you receive for these periods.


Effective July 5, 2020 (i.e. Period 5 and subsequent periods), CEWS would consist of two parts with respect to the remuneration of active employees:

  1. base subsidy available to all eligible employers that are experiencing a decline in revenues, with the subsidy amount varying depending on the scale of revenue decline; and
  2. top-up subsidy of up to an additional 25 per cent for those employers that have been most adversely affected by the COVID-19 crisis.

A separate CEWS rate structure would apply to furloughed employees (as described below).

In addition, a safe harbour would be available to ensure that, through August 29 (periods 5 and 6), employers would have access to a CEWS rate that is at least as generous as they would have had under the initial CEWS structure.  More information is available further on in this bulletin.

Base subsidy for all employers impacted by the crisis

This base CEWS would be a specified rate, applied to the amount of remuneration paid to the employee for the eligibility period, on remuneration of up to $1,129 per week. The rate of the base CEWS would now vary depending on the level of revenue decline, and its application would be extended to employers with a revenue decline of less than 30% (see Table 1).

The maximum base CEWS rate would be provided to employers with a revenue drop of 50% or more. Employers with a revenue drop of less than 50% would be eligible for a lower base CEWS rate, as shown in Table 1. The decline in the base CEWS rate between a 50% revenue drop and zero provides a smooth phase-out so that businesses can grow and rehire without worrying about a sharp drop in support as economic activity returns.

The maximum base CEWS rate would be gradually reduced from 60% in Periods 5 and 6 (July 5 to August 29) to 20% in Period 9 (October 25 to November 21).


A top-up CEWS equal to 1.25 times the average revenue drop that exceeds 50%, up to a maximum of 25% (attained at a 70% revenue decline) would be available to employers with a revenue decline of over 50%. Generally, an eligible employer’s top-up CEWS would be determined based on the revenue drop experienced when comparing revenues in the preceding 3 months to the same months in the prior year or to the average monthly revenue in January and February 2020.

As with the base CEWS rate, the top-up CEWS rate would apply to remuneration of up to $1,129 per week.

The top-up CEWS rate for selected average revenue drop levels is illustrated in Table 2 below.

The overall CEWS rate would be equal to the top-up CEWS rate plus the base CEWS rate. Table 3 shows the combined base and top-up CEWS rates for Periods 5 to 9 for the most adversely affected employers.

* In Periods 5 and 6, employers who would have been better off in the CEWS design in Periods 1 to 4 would be eligible for a 75% wage subsidy if they have a revenue decline of 30% or more. As described further below (see Safe harbour rule for Periods 5 and 6).

Table 4 illustrates the interaction of the 3-month drop in revenue test for the top-up CEWS and the month-over-month revenue test for the base CEWS for Periods 5 and 6. For example, an employer that is recovering with a revenue drop of 20% in Period 5 and a preceding 3-month average revenue drop of 60% would benefit from a base CEWS rate of 24% and a top-up CEWS rate of 12.5%, which would provide a combined CEWS rate of 36.5%.


For Periods 5 and 6, an eligible employer would be entitled to a CEWS rate not lower than the rate that they would be entitled to if their entitlement were calculated under the CEWS rules that were in place for Periods 1 to 4. This means that in Periods 5 and 6, an eligible employer with a revenue decline of 30 per cent or more in the relevant reference period would receive a CEWS rate of at least 75 per cent or potentially an even higher CEWS rate using the new rules outlined above for the most adversely affected employers (up to 85 per cent).


For Periods 5 and 6, the subsidy calculation would remain the same as for Periods 1 to 4. It would be the greater of:

  • For arm’s-length employees, 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
  • 75% of the employee’s pre-crisis weekly remuneration up to a maximum benefit of $847 per week or the amount of remuneration paid, whichever is less.

Beginning in Period 7, CEWS support for furloughed employees would be adjusted to align with the benefits provided through the Canada Emergency Response Benefit (CERB) and/or Employment Insurance (EI). This would ensure equitable treatment of employees on furlough between both programs, provide greater clarity to workers as to their compensation as compared to a changing subsidy rate based on their employer’s revenue in a given month and, when combined with draft legislative changes to the interaction with the CERB (i.e., the elimination of the 14-days rule, as discussed below), make it easier to transition employees on to CEWS so that they are reconnected with their employer.

The subsidy per week in respect of an arm’s length employee (or a non-arm’s length employee who received pre-crisis remuneration for the relevant period) would be: the amount of eligible remuneration paid in respect of the week; or, if the employee receives remuneration of $500 or more in respect of the week, the greater of $500 and 55% of pre-crisis remuneration for employee, up to a maximum subsidy amount of $573.

For Period 5 and subsequent periods, the CEWS for furloughed employees would be available to eligible employers that qualify for either the base rate or the top-up for active employees in the relevant period.

The employer portion of contributions in respect of the Canada Pension Plan, Employment Insurance, the Quebec Pension Plan, and the Quebec Parental Insurance Plan in respect of furloughed employees would continue to be refunded to the employer.


There are no changes to the definition of eligible remuneration. Eligible remuneration may include salary, wages, and other remuneration like taxable benefits. These are amounts for which employers would generally be required to withhold or deduct amounts to remit to the Receiver General on account of the employee’s income tax obligation. However, it does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.

For active arm’s-length employees, the amount of remuneration is based solely on actual remuneration paid for the eligibility period, without reference to the pre-crisis remuneration concept used for earlier CEWS periods.

A modified special rule would apply to active employees that do not deal at arm’s length with the employer. For Period 5 and subsequent periods, the wage subsidy for such employees is based on the employee’s weekly eligible remuneration or pre-crisis remuneration, whichever is less, up to a maximum of $1,129. The subsidy would only be available in respect of non-arm’s-length employees that were employed prior to March 16, 2020.


An employer’s revenue for the purposes of the CEWS is its revenue in Canada earned from arm’s-length sources. Revenues from extraordinary items and amounts on account of capital are excluded.

Generally, includes revenue earned in Canada from:

  • selling goods
  • rendering services, and
  • others’ use of your resources

You should use your normal accounting method when calculating your eligible revenue. If your normal accounting method is the accrual method, you can elect to use the cash method (and vice  versa), but once you choose you must use the same accounting method for all your claims. 

Note: If you choose to use the cash method, you need to check the “cash method” election box when completing your application.

For registered charities and non-profit organizations, the calculation includes most forms of revenue, excluding revenues from non-arm’s length persons. These organizations are allowed to choose whether to include revenue from government sources as part of the calculation. Once chosen, the same approach would have to apply throughout the program period.

Special rules for the computation of revenue are provided to take into account certain non-arm’s-length transactions, such as where an employer sells all of its output to a related company that in turn earns arm’s-length revenue. As well, affiliated groups are able to elect to compute revenue on a consolidated basis.


For the purpose of the base CEWS, eligibility would generally be determined by the change in an eligible employer’s monthly revenues, year-over-year, for the applicable calendar month. Table 5 below outlines each claiming period and the relevant period for determining an eligible employer’s change in revenue. For Period 5 and all subsequent periods, an eligible employer would be able to use the greater of its percentage revenue decline in the current period and that in the previous period for the purpose of determining its qualification for the base CEWS and its base CEWS rate in the current period. This would provide certainty and be a continuation of the rules for Periods 1 to 4 that allowed an employer that met the revenue test in one period to automatically qualify for the following period. 

Employers that have elected to use the alternative approach for the first 4 periods would be able to either maintain that election for Period 5 and onward or revert to the general approach. Similarly, employers that have used the general approach for the first 4 periods would be able to either continue with the general approach or elect to use the alternative approach for Period 5 and onwardWhichever approach they choose would apply for Period 5 and onward and would apply to the calculation of the base CEWS and the top-up CEWS. This would provide flexibility for employers to adjust their approach in light of new circumstances they may be experiencing as the CEWS is extended.

For the purpose of the top-up CEWS, eligibility would generally be determined by the change in an eligible employer's revenues for a 3-month period. Table 6 below outlines each claiming period and the relevant period for determining an eligible employer’s average change in revenue.

Follow us: