Covid-19: The Canada Emergency Wage Subsidy (Periods 1 to 4)

To help businesses keep and reinstate workers while facing the challenges of the COVID-19 pandemic, Prime Minister, Justin Trudeau, proposed the new Canada Emergency Wage Subsidy. This subsidy would provide eligible employers with a wage subsidy of 75% of base salary, up to a maximum of 24 weeks, retroactive to March 15, 2020.

The government announced on May 15, 2020 that the CEWS would be extended for an additional 12 weeks, until August 29, 2020. The current eligibility criteria will apply for the current period (period 4). The conditions have not yet been communicated by the government.

To read about adapting the Canada Emergency Wage Subsidy (Periods 5 to 9), please click here.

IMPORTANT NOTICE: This content is up to date as of June 18, 2020. New facts or government directives which have occurred may invalidate certain information. Please take this factor into consideration.

This wage subsidy aims to prevent further job losses, encourage employers to rehire workers previously laid off as a result of COVID-19, and help better position Canadian companies and other employers to resume more easily their regular operations after the crisis.

Eligible Employers 

Eligible employers include: 

  • Individuals, taxable corporations, and partnerships consisting of eligible employers;  
  • Nonprofit organizations and registered charities. 

Public organizations, which include municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals would not be eligible for this subsidy.  

This subsidy would be available to eligible employers who face a reduction of at least 15% of their revenue in March and 30% of their revenue in April and May 2020. In applying for the subsidy, employers would be required to attest to the decline in revenue.

How Much Is the Subsidy? 

The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020, would be the greater of: 

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

The pre-crisis remuneration for a given employee will be 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.

Calculating Revenues 

For this purpose, an employer’s revenue for this purpose would be its revenue from its business carried on in Canada, earned from arm’s-length sources. Revenues would be calculated using the employer’s normal accounting method and would exclude revenues from extraordinary items and amounts recognized as capital. 

For non-profit organizations and registered charities, the government will continue to work with them to ensure that the definition of revenue is appropriate to their specific circumstances. 

Special rules for calculating revenue are provided to take into account certain non-arm's length transactions, such as when an employer sells all its production to a related company that in turn earns arm's length revenue.

Affiliate groups can also calculate revenue on a consolidated basis.

Eligible Periods 


Claiming Period 

Reference Period for Eligibility 

Period 1 

From March 15 to April 11, 2020 

March 2020 over March 2019 
March 2020 compared to the average of January and February 2020

Period 2 

From April 12 to May 9, 2020

April 2020 over April 2019 
April 2020 compared to the average of January and February 2020

Period 3 

From May 10 to June 6, 2020

May 2020 over May 2019 
May 2020 compared to the average of January and February 2020

Period 4

From June 7 to July 4, 2020

June 2020 over June 2019 
June 2020 compared to the average of January and February 2020

How Will I Receive the Subsidy? 

Eligible employers would be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s “My Business Account” portal as well as a web-based application. Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly. 

Interaction With the 10% Wage Subsidy 

For employers eligible for the Canadian Emergency Wage Subsidy and the 10% Wage Subsidy for a given period, any wage subsidy benefit equivalent to 10% of wages in a particular period generally reduces the amount that can be claimed under Canada's Emergency Wage Subsidy during this same period.

For further details: 

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Covid-19 Insolvency

Adapting the Canada Emergency Wage Subsidy

The Canada Emergency Wage Subsidy (CEWS) was put in place for eligible wages paid from March 15, 2020. Initially, there were only 3 periods (March 15 to June 6, 2020). On May 15, the tax authorities added 3 periods, from June 7 to August 28. On June 10, it was announced that the conditions applied to Periods 1 to 3 would fully apply to Period 4. For Periods 5 and 6, the conditions were to be announced later. On July 17, the Government of Canada announced that this program will be extended until the end of 2020.


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