Canada announces CEWS extension and the criteria to apply has changed too
As provinces enter into the early stages of reopening their respective economies, the federal government has just revealed new measures to help struggling businesses while also encouraging employees to make the transition from the Canada Emergency Response Benefit (CERB) to the Canada Emergency Wage Subsidy (CEWS) and get back to work as soon as they can.
Today, Prime Minister Trudeau announced some amendments to the latter program that will enable more businesses to qualify, and will also help recipients properly rehabilitate their businesses in this uncertain time.
For starters, the timeline of the CEWS, which was initially only supposed to last until June 6, has now been extended another three months through August.
Also, the requirement that businesses have to have lost at least 30 per cent of their revenue amid the pandemic to qualify — which was a pain point for many — is being revised.
Wow! The Canada Emergency Wage Subsidy (CEWS) is extended until the end of August & govt is considering lowering the 30% threshold. This is a significant and very positive announcement.— Dan Kelly (@CFIB) May 15, 2020
"As businesses start up, needing a decline shouldn’t be a barrier to growth," the PM said at his press briefing on Friday. "Business owners, you now have some runway to catch your breath as you get restarted. So please bring back your employees."
Additional eligibility expansions mean that new industries such as credited journalistic organizations and amateur athletic organizations, tax-exempt indigenous-owned corporations and partnerships, and non-public colleges and schools (including driving, language and arts schools) will be able to immediately and retroactively access funds through CEWS, dating back to March.
Trudeau added that other aspects of the subsidy may also be revisited in the coming weeks to ensure that it "keeps working for people and keeps encouraging employers to rehire staff, and even expand where possible."
In the meantime, he is urging business owners who haven't yet applied for it to do so now, and is also reminding Canadians able to return to work as things reopen to do their part to help their neighbourhoods, their cities and the country's floundering economy at large.
"We need you back: we need you in your job, on your team, bringing life into our communities and our economy," he said.
... Don't think it would have been too difficult for policymakers to be a little more formulaic and create a ramp for qualifications rather than a hurdle. The longer this goes on, I suspect the pressures to tweak programs will build. /end— Ted Mallett (@CFIBeconomics) April 13, 2020
There have been some concerns about aid programs like the CEWS — through which the Canadian government covers 75 per cent of a businesses's wages to help them continue operating and keep employees on the payroll — as well as the Canada Emergency Business Account (CEBA), which some smaller establishments said still wasn't enough to keep them afloat.
The CERB has also been somewhat problematic in its own way, with many wondering about people receiving the benefit when they don't actually need it, or choosing not to return to work if and when they are able to because of the amount the federal government is providing them to stay home.
@JustinTrudeau my son is still working seeing as he works in a grocery store, he risks his health as well as ours to earn money to pay for school. Most of his friends have stopped working due to covid and now earn more money than him due to the #CERB explain how this makes sense— SoulfulGinger (@MaddCharts) April 9, 2020
In response to concerns of fraud, Trudeau said that the government prioritized getting money into the hands of residents who were out of work as a result of the health crisis as quickly as possible, rather than trying to vet applicants beforehand, which would have meant a longer processing time.
"In this situation, we made the deliberate choice to get the money out the door to millions of Canadians who needed it and bring in measures to go back and retroactively go after people who might have tried to defraud the system,” he said in front of Rideau Cottage today.
"The response, in order to keep Canadians safe and healthy needed to be to get them the money quickly, and that’s exactly what we did. But we will ensure that fraudsters and people that got the benefit unfairly or inappropriately will have to pay them back."
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