Earlier today Finance Minister Bill Morneau announced further details about the 75% wage subsidy.
The following is a summary of what was disclosed today and last week:
- The wage subsidy will reimburse employers 75% of an employee's salary, to a maximum of $847 per week, per employee,
- The employer must experience a 30% or greater decline in revenues as compared to the prior year to be eligible for this subsidy,
- For new businesses that have not existed for a year, other methods will be used to determine if they have experienced a decline in revenues - more details to be released in the upcoming weeks,
- The wage subsidy will be available to all employers, large and small, except those that receive public funding,
- Employers will have to attest each month that they are doing everything they can to pay the additional 25% of wages,
- Employers will have to apply and reapply for each of the months March, April, and May. Presumably you could be eligible for subsidy one month and not another.
- Applications for the wage subsidy will be done online through a CRA portal that is expected to be developed and online in approximately 3 weeks. First reimbursement checks should be expected by companies approximately six weeks after that. The government suggests that you verify that your company has direct deposit to expedite your reimbursement payments.
- The 75% wage subsidy is expected to cost the government approximately $71 billion, in addition to the CERB which is anticipated to be approximately $24 billion.
- Mr. Morneau stated that in the beginning the Wage subsidy program was going to rely on companies’ self assessing their eligibility. However, afterwards the federal government will review eligibility and assess severe penalties for those companies that abuse or do not qualify for the subsidy, yet have received it.
- For companies that do not qualified for the 75% wage subsidy, the 10% wage subsidy remains as a separate program, at least with respect to the information we have at this time.
For a FREE detailed list of the government incentives and initiatives, please click on the following link.
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This blog is not meant to provide specific advice or opinions regarding the topic discussed above. For further clarification, please speak with your tax advisor.
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