CEWS Periods 1 thru 3

  • This subsidy is available for a 12-week period to all Canadian companies and charities that have seen at least a 30-percent drop in revenues compared to identified reference periods
  • When comparing revenues, you can compare:
    • the current month with the corresponding month in 2019, i.e. compare March 2020 revenue with March 2019 revenue, or;
    • January-February 2020 to the current month
  • When selecting your reference period, be aware that you cannot change the reference period. 
  • During the first Period (Claiming Period of March 15 to April 11th and Reference Period being the month of March), the benchmark has been reduced to a 15-percent drop in revenue in recognition that many businesses did not begin to be affected by the crisis until partway through the month.
  • It is also proposed that employers be allowed to measure revenues either on the basis of accrual accounting (as they are earned) or cash accounting (as they are received).
  • All eligible employer’s entitlement to this wage subsidy will be based entirely on the salary or wages actually paid to employees. All employers are expected to make best efforts to bring employees’ wages to their pre-crisis levels

Amount of the Subsidy

  • For businesses who qualify for the CEWS, the subsidy amount for a given employee on eligible remuneration for the period between March 15th and June 6th, 2020, is the greater of:
    • 75% of the amount of remuneration paid, up to a maximum subsidy of $847 per week and
    • The amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of the employee’s pre-crisis weekly remuneration, whichever is less.
  • Employers may be eligible for a subsidy of up to 100% of their first 75% of pre-crisis wages or salaries of existing employees.  These employers are expected, where possible to maintain existing employees’ pre-crisis employment earnings.
  • The pre-crisis remuneration for a given employee is based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration.
  • Employers are also eligible for a subsidy of up to 75% of salaries and wages paid to new employees.


For a full list of eligible employers 

Eligible Employees

  • An eligible employee, in respect of a week in a claim period, means an individual employed in Canada by the eligible employer in the claim period, as long as the employee has not been without remuneration from the eligible employer in respect of a period of 14 or more consecutive days in the claim period.
  • An arm’s length employee is eligible even if they were hired after March 15th, 2020.
  • A non-resident employee is eligible, as the eligible employee status is determined based on where the individual is employed and not where the individual resides.
  • An employer can hire back an eligible employee and pay them retroactively in respect of a claim period to be able to qualify for the wage subsidy.

 Eligible Periods

  • Eligibility would generally be determined by the change in an eligible employer’s monthly revenues, year-over-year, for the calendar month in which the period began, or the eligible employer’s average revenues for January and February 2020 combined.
  • During the first Period (Claiming Period of March 15 to April 11th and Reference Period being the month of March), the benchmark has been reduced to a 15-percent drop in revenue in recognition that many businesses did not begin to be affected by the crisis until partway through the month.
  • Once an eligible employer has determined that it has experienced the required reduction in revenue for a particular claim period, it is automatically considered to have experienced the required reduction in revenue for the immediately following claim period (deeming rule). As a result, the employer does not have to make this determination again for that next claim period (see table below).
  • The deeming rule only applies to the next claiming period, not ALL subsequent claiming periods. For example, if an eligible employer meets the condition for the reduction in respect of the first claim period – March 15 to April 11, 2020, the employer will be considered to have met the required reduction in revenue in respect of the second reference period – April 12 to May 9, 2020, without necessarily making a determination. But the eligible employer will have to make a determination for the third claim period – May 10 to June 6, 2020.

PeriodEligibility PeriodsReference Period for EligibilityRequired Reduction in RevenueReporting Dates
1March 2020March 2019 or Jan-Feb 202015%Mar 15 – Apr 11
2April 2020April 2019 or Jan-Feb 2020
30%Apr 12 – May 9
3May 2020May 2019 or Jan-Feb 202030%May 10 – Jun 6

Qualifying Revenue

  • An employer’s revenue for this purpose would be its revenue from its business carried on in Canada earned from arm’s length sources using the employer’s normal accounting method and excludes revenues from extraordinary items and amounts on account of capital.
  • Includes revenue earned in Canada from
    • Selling goods
    • Rendering services, and
    • Others’ use of your resources
  • Use your normal accounting method when calculating revenue, cash or accrual. It must remain the same approach throughout all subsequent applications.
  • Amounts from the CEWS & TWS for employers are ignored when calculating qualifying revenue

Eligible Remuneration

Eligible remuneration of an eligible employee means amounts paid to employee as salary, wages, and other remuneration, certain taxable benefits (provided such amounts are actually paid), and fees, commissions or other amounts paid for services. These are amounts for which an eligible employer would generally be required to make payroll deductions to be remitted to the CRA. The following amounts are not considered eligible remuneration:

  • a retiring allowance;
  • an amount deemed to have been received by the eligible employee as an employment benefit in respect of a stock option agreement;
  • any amount received that can reasonably be expected to be paid or returned, directly or indirectly, to the eligible employer or to a person (or a partnership) at the direction of the eligible employer or with whom the eligible employer does not deal at arm’s length;
  • any amount that is paid in respect of a week in the claim period, if:
    • the amount is in excess of the eligible employee’s baseline remuneration,
    • after the claim period, the eligible employee is reasonably expected to be paid a lower weekly amount than their baseline remuneration, and
    • one of the main purposes for the arrangement is to increase the amount of the wage subsidy.

Baseline Remuneration

Baseline remuneration means the average weekly eligible remuneration paid to an eligible employee by an eligible employer for the period that begins on January 1, 2020 and ends on March 15, 2020, or that begins on March 1st to May 31st 2019, whichever is higher for each employee. However, any period of seven or more consecutive days for which the employee was not remunerated is excluded from the calculation.

Special Considerations

Employees not at Arm’s Length with the Employer
  • A special rule will apply to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration.
Refund for Certain Payroll Contributions
  • CEWS was expanded by the introduction of a new 100% refund for certain employer-paid contributions to Employment Insurance and CPP. This refund covers 100% of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim for the CEWS for these employees.
  • This refund is not subject to the weekly maximum benefit per employee of $847 that an eligible employer may claim in respect of the CEWS. There is no overall limit on the refund amount that an eligible employer may claim.
Interaction with Other Benefits including the 10 Percent Temporary Wage Subsidy
  • For greater certainty, employers are required to continue to collect and remit employer and employee contributions to each program as usual. Eligible employers apply for a refund at the same time that they apply for the CEWS.
  • There would be no overall limit on the subsidy amount that an eligible employer may claim.
  • Employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.
  • An employer would not be eligible to claim the Canada Emergency Wage Subsidy for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit.
  • Employers who are not eligible for the Canada Emergency Wage Subsidy would still be able to furlough employees who will receive up to $2,000 a month.

Click here to download our CEWS and TWS Bulletin (April 28th, 2020)

Click here to download the Calculation Worksheet for Periods 1-3

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