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CEWS Update – CRA Provides Particulars for Period 4 CEWS Extension

When first introduced, the Canada Emergency Wage Subsidy (the “CEWS”) was to be available for 12 weeks ending June 6, 2020, with the possible extension by regulation to no later than September 30, 2020.  The initial 12 week period was comprised of three separate qualifying periods (i.e., Period 1 – March 15, 2020 to April 11, 2020; Period 2 – April 12, 2020 to May 9, 2020; and Period 3 – May 10, 2020 to June 6, 2020).

On May 15, 2020, the Government of Canada announced that the CEWS would be extended to August 29, 2020, but did not provide particulars as to how the CEWS would apply during the extension.  Instead, the Government announced that it would “consult with key business and labour representatives over the next month on potential adjustments to the program to incent jobs and growth, including the 30 per cent revenue decline threshold.”

The Canada Revenue Agency (“CRA”) has now confirmed that: 

  1. the extension will be broken down into three separate four week qualifying periods (i.e., Period 4 – June 7, 2020 to July 4, 2020; Period 5 – July 5, 2020 to August 1, 2020; and Period 6 – August 2, 2020 to August 29, 2020);
  2. “the eligibility criteria will apply for the current period”, meaning, presumably, that the criteria (including the 30% revenue decline threshold) for Period 4 will be the same as for Period 3, subject to the “prior reference period” for Period 4 being June 2019 rather than May 2019;
  3. any potential changes to the eligibility criteria would commence as of Period 5 and/or Period 6.

The CRA also stated that more information about the CEWS extension will be coming soon.

The CRA announcement is available here.  Additional tax commentary from our Firm on the CEWS can be found here and here.



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