The federal government has brought the Canada Emergency Wage Subsidy (CEWS) back to 75 percent, at least for the period of December 20 to March 13.
The announcement was made by Deputy Prime Minister and Minister of Finance Chrystia Freeland on Friday. She revealed that the government concluded the necessary regulatory changes in order to raise the maximum wage subsidy rate to 75 percent.
The government announced it would bring back the 75 percent as it also promised to extend the program into 2021.
The official increase follows a promise made by the Liberal government to do so earlier this year. The government announced it would bring back the 75 percent as it also promised to extend the program into 2021, a measure that was passed last month. CEWS is currently set to run until June 2021.
“We are raising the wage subsidy back to a maximum of 75 per cent, recognizing the early months of the year are the toughest for many businesses, now more than ever,” said Freeland. “Businesses and workers can continue to rely on strong government support, giving workers assurances about where their next paycheque is coming from and giving businesses certainty that they can pay the workers that make their businesses a success.”
A recent report from the Parliamentary budget office found that CEWS could cost the federal government more than expected this year. The report indicated figures of close to $85.5 billion and nearly $13.9 billion next year. This compares to the $83.5 billion the Liberal government estimated last month for this fiscal year and almost $16.2 billion in the coming fiscal year that starts in April.
The government claims that since its launch, more than four million Canadian employees have been supported through the CEWS with more than $54 billion paid out in wage subsidies as of December 13.
For the period ending December 19, the base rate for the wage subsidy sat at 65 percent, with a potential top-up of 25 percent for eligible businesses. The amount each company can receive is proportional to its revenue drop and is based on a single month’s revenue decline instead of companies’ having to demonstrate three months’ decline
More details on the changes approved last month to the CEWS can be found here.
Image source Pixabay
