Federal Government Proposes New Changes to Emergency Wage Subsidy Program

July 21, 2020 /

Update: On July 21, the House of Commons unanimously passed the federal wage subsidy changes outlined below.

On July 17th, 2020, Finance Minister Bill Morneau announced the Federal Government’s proposed plan to alter eligibility requirements for the emergency wage subsidy program. This announcement followed earlier news that the subsidy program was receiving a significant budget increase from the previously allotted $45 billion to $82.3 billion, and that the program was being extended through to December 19, 2020.

The proposed changes would make several alterations to the existing program. If passed, the subsidy would be split into two parts: a “base” and a “top-up” amount. The “base rate” would operate on a sliding scale related to revenue loss, with the hardest-hit businesses becoming eligible for up to a 25% increase compared to the previous maximum payment. The “top-up” would be available to employers who have experienced a three-month average revenue decline of more than 50%, with the total maximum payment set at 85% of employees’ remuneration, up to $960 per week. Base rate payments would be reduced between now and November.

Additionally, the changes would expand how an eligible employer can calculate its revenue drop for the current and subsequent periods, either by comparing the current or previous month to the corresponding month in 2019, or to the combined average revenue drop in January and February 2020. The subsidy would also be extended to otherwise eligible employees who are without remuneration for 14 or more consecutive days in an eligibility period, effective July 5, 2020. This change would not apply to furloughed employees.

These proposed changes were debated in the House of Commons on July 20, and a vote is expected to occur later this week. Stay tuned for updates.

Want More?

If you would like to discuss these proposed changes or want to know what this means for you and your business, feel free to contact Ryley Mennie, Lou Poskitt or Connor Levy from our Workplace Law Group.