For Immediate Release
OTTAWA, ON—Cathay Wagantall, Member of Parliament for Yorkton—Melville, today clarified an important but little-known detail about the Canada Emergency Wage Subsidy (CEWS). Eligible Small businesses and employees benefit from the ‘deeming rule’ contained within CEWS, resulting in higher levels of financial support during the COVID-19 pandemic.
“It is disappointing that the Liberals have failed to be upfront about this information for so long,” said Wagantall. “Small businesses are the engine of our economy and trust their federal government to be clear about the support that is available to them during these uncertain times.”
The CEWS was established to assist businesses experiencing sharp declines in income during the pandemic. A 75 percent wage subsidy is provided for employers that report a decline in eligible revenue of 15 percent in March 2020; or 30 percent in April, May, or June 2020 when compared to baseline revenue from the previous period last year. According to the ‘deeming rule,’ a business that qualifies for one or more periods of CEWS support will automatically qualify for the following period, no matter its revenue at that point.
“For example, an eligible business with a 15 percent drop in revenue in March 2020 (when compared to March 2019) would qualify for the CEWS,” explained Wagantall. “Even though the required reduction in revenue for April 2020 rises to 30 percent, the business would not have to redetermine its eligibility for that claim period — it would automatically continue to receive the CEWS in April because of the ’deeming rule.’ Each eligible employer receives an extra month of support, no matter their income. This is good news for our small businesses and the staff they employ.”
The ‘deeming rule’ only applies to one period (one month) immediately following the period(s) that the employer qualifies for, and does not continue indefinitely. After this automatically-eligible period, employers would have to redetermine their eligibility if they wish to claim an additional period of CEWS assistance.
Wagantall was concerned to learn that many businesses were previously unaware of the rule, and hopes that the Liberal government will do more to communicate with employers going forward.
“Small business owners don’t ask for much from their government,” said Wagantall. “However, what they do need is forthright and clear information about the supports that are available to them when times are tough. The Liberals’ communication on CEWS has been convoluted and ever-changing since the start of this crisis.”
While it is unclear what further changes will be made to the CEWS as the recovery continues, Wagantall noted that the program has been extended to December 2020. You can learn more about the CEWS at https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html.