Williams HR Law LLP

The Canada Emergency Wage Subsidy: Extension to August 29 and Expansion

May 19, 2020

On May 15, 2020, the federal government announced that it will extend the Canada Emergency Wage Subsidy (CEWS) until August 29, 2020 (for an overview of the CEWS, please watch our recent FAQ video). The CEWS was set to expire on June 6, 2020 prior to this extension.

Prime Minister Justin Trudeau stated that the extension of the CEWS is intended to help businesses bring employees back to work as they reopen, and to help businesses expand where possible.

On May 15, 2020, the federal government also announced regulatory changes to expand the types of organizations that can be eligible for the CEWS, as well as proposed legislative changes with respect to the CEWS. Moreover, the government is considering changing the 30% decline-in-revenue eligibility criterion for the CEWS, in consultation with stakeholders, because “needing a decline should not be a barrier to growth”.

Regulatory Changes: Organizations That Can Now Be Eligible for the CEWS

The federal government has also prescribed through regulations that certain types of organizations that were not formerly eligible for the CEWS can now be eligible. These types of organizations include:

  • partnerships with one or more non-eligible members, so long as the non-eligible members of the partnership collectively account for not more than 50% of the fair market value of the entire partnership at all times during the qualifying period;
  • tax-exempt indigenous government-owned businesses, and their wholly-owned subsidiaries, as well as partnerships in which each partner is an Indigenous government or an eligible employer;
  • tax-exempt Registered Canadian Amateur Athletic Associations;
  • tax-exempt registered journalism organizations; and
  • non-public educational and training institutions, including non-profit and for-profit institutions such as art schools, language schools, and driving schools.

These changes are all retroactive such that these entities can be eligible beginning from the first CEWS qualifying period of March 15 – April 11, as well as all subsequent qualifying periods. To be clear, these organizations must still meet the other existing eligibility criteria for the CEWS to receive it.

Proposed Legislative Changes to the CEWS

The federal government has announced that it will propose legislative changes to close unintended gaps in the existing legislation, such that the CEWS would be available in respect of the wages of certain employees that are presently excluded or disadvantaged under the existing legislation. However, one of the proposed changes would reduce the number of tax-exempt trusts that are eligible for the CEWS.

First, to support seasonal employees and employees returning from extended leaves, as well as their employers, the government is proposing to allow employers to choose between two periods when calculating their employees’ baseline remuneration. Employers would be able to calculate the baseline remuneration of employees as the weekly average that they were paid from January 1 to March 15, 2020, or as the average weekly remuneration they were paid from March 1 to May 31 2019 (excluding any period of 7 or more days in which the employee did not receive remuneration, regardless of which period is chosen).  This change would be retroactive to the first CEWS qualifying period.

Second, corporations that have recently been formed through an amalgamation would be allowed to calculate their benchmark revenue for the purposes of the CEWS revenue-decline eligibility criterion by combining the revenues of the corporations that were amalgamated, unless qualifying for the CEWS can reasonably be considered to be one of the main purposes for the amalgamation. This change would also be retroactive to the first CEWS qualifying period.

Finally, tax-exempt trusts would only be eligible for the CEWS if they are a registered charity or if they are another type of prescribed eligible tax-exempt entity. Further, trusts that are public institutions would only be eligible for the CEWS if they are specifically prescribed to be eligible. These changes would be retroactive to May 10, 2020.


The extension of the CEWS until the end of August is fantastic news for employers. This extension will help provide eligible employers with more confidence that it is financially feasible to bring their employees back to work as they reopen their workplaces in the coming months.

Similarly, the expansion of the types of organizations that can be eligible for the CEWS will allow more businesses to access the CEWS than before.

The government’s suggestion that it may reduce the decline in revenue that is necessary to qualify for the CEWS would make it easier for employers to qualify. This would benefit employers that do not currently meet the applicable criterion of a 30% revenue reduction or that may see an increase in revenues such that they will cease to meet this criterion as the economy reopens. That said, the government has not committed to this change at this point.

We will continue to track all changes to the CEWS, including the proposed legislative changes that were announced today, to keep your business In the Know.

This blog is provided as an information service and summary of workplace legal issues. This information is not intended as legal advice.