Today’s blog will review the Prime Minister’s announcement on April 8th, 2020 regarding changes to the Canada Emergency Wage Subsidy as well as recently announced changes to the Canada Emergency Response Benefit. We also provide information about Federal Work Sharing Agreements and recent changes made to this program in response to the COVID-19 pandemic.
Canada Emergency Wage Subsidy (“CEWS”)
Today, Prime Minister Trudeau announced changes to the eligibility requirement for the CEWS. Previously, the government had announced that employers would have to demonstrate a 30% drop in revenue for March, April, and May in comparison to those months in 2019. Today, however, the Prime Minister indicated that a reduction in revenue of 15% for March would qualify employers for the subsidy. The threshold would remain at 30% for April and May. The Prime Minister also indicated that employers may use January and February 2020 as comparator months to demonstrate revenue drops in March, April, and May 2020 instead of using the same months in 2019.
We will continue to monitor the announcements regarding the CEWS and provide updates as we learn more.
Canada Emergency Response Benefit (“CERB”)
Monday marked the first day that the application portal for the CERB was open. On the same day, Prime Minister Trudeau announced that the government is looking into an expansion of the CERB to make it available to workers who are working reduced hours due to the COVID-19 pandemic.
Recall that the CERB provides $2,000 per month for eligible applicants. Currently, the legislation reads that in order to be eligible for the CERB, a worker must cease working for reasons related to COVID-19 for at least 14 consecutive days within the 4-week period for which they are applying AND they must not receive any employment income during those 14 consecutive days.
In his daily press conference on Monday, Prime Minister Trudeau announced that the CERB would soon be available to Canadians who are working reduced hours. He suggested that those working 10 hours or less or earning $500/week or less would be eligible for the CERB.
As with the CEWS, we will continue to monitor the announcements and draft legislation released by the government regarding this or any other changes to the CERB.
Work Sharing Agreements
We have not discussed Work Sharing Agreements in previous blogs. This is a program that helps employers and employees avoid lay-offs when there is a temporary decrease in business activity beyond the control of the employer. It provides EI benefits to eligible employees who come to a Work Sharing Agreement with their employer to reduce normal working hours and share the available work with co-workers while the employer recovers.
The government has announced recent changes to the Work Sharing Program in response to the COVID-19 pandemic as follows:
- Previously, the length of a Work Sharing Agreement was a maximum of 38 weeks; the Government has announced that it will permit these Agreements to last for up to 76 weeks in the present circumstances.
- Previously, there was a mandatory cooling off period preventing employers who were engaged in the program from entering into new Work Sharing Agreements. That cooling off period has been waived such that employers may immediately enter into new Work Sharing Agreements when predecessor agreements expire.
- Previously, a business had to be in operation for 2 years to qualify for the program. This requirement has been reduced to 1 year.
- The requirements for providing sales/production figures in order to qualify have been reduced.
- The classes of eligible employees have been expanded to include staff considered essential to recovery from the pandemic and also for government business enterprises and non-profit employers.
- The application previously required a detailed Recovery Plan. That requirement has been reduced significantly.
- Previously, an application for a Work Sharing Agreement had to be submitted 30 days prior to the start date of the work sharing arrangements. This has been reduced to 10 days.
The Labour and Employment Team