On May 7, CRA presented a Summary of CRA’s Canada Emergency Wage Subsidy (CEWS) question & answer teleconference for small and medium business.
I found the session to be very good and well presented. It was attended by over 1,200 people who submitted 100s of questions. All of the questions submitted will be reviewed by CRA and some will be selected to be presented on CRA’s FAQ webpage. Here is a link to that webpage. Frequently asked questions – Canada Emergency Wage Subsidy
Here are some highlights from the session:
- CRA advised that several thousand subsidy payments have already gone out.
- It’s clear that if a non-arm’s length person did not receive salary during the baseline period their employer will not be entitled to the CEWS in respect of any amounts paid to them.
- CRA is making outbound calls to employers to facilitate the processing of the wage subsidy. i.e. if the employer signs up for or makes a change to their direct deposit information, CRA will call to make sure it was the employer setting up/changing the account and not some nefarious person trying to steal the employer’s wage subsidy.
- The subsidies have been processed starting May 4th and payments have been made since May 5th
- The helpline for submitting the claim is 833-966-2099. Hours of service are 9am to 9pm.
- If an error has been made in respect of a claim, it is not yet possible to amend the claim but the ability to do so is coming – probably the end of May/early June. We should be hearing something about this in the next few days.
- CRA will send letters to employers indicating approval or denial of the subsidy. If you have had no word about your application within 5-6 days of submitting the claim, the recommendation is that employers should call CRA to enquire. Chances are they are trying to call you to confirm some information.
- Claim audits will commence in June – selection will be risk based and will depend on how compliant people are in general.
Q – If an employee takes paid vacation during a qualifying period would the payment be eligible for CEWS?
A – yes however lump sum payments could be an issue.
Q – An employer is eligible for the 10% subsidy in a month (example March) that it is not eligible for the 75% subsidy. If the employer qualifies for the 75% in April would it have to reduce its April 75% subsidy claim by the March 10% subsidy claim?
A – No. The wording of the legislation only requires a reduction in the 75% subsidy claim for the 10% subsidy in respect of the same period – not prior periods.
Q – Can an employer claim the CEWS paid to an employee who is collecting the CERB? i.e. if the payment to the employee is less than $1,000 in a four week period.
A – Yes as long as the employee does not go without remuneration from the employer for a period of 14 or more consecutive days.
Q – Can an employer experiencing a decline of 29.8% qualify for the CEWS?
A – possibly – all factors will be considered. For example, whether the employer was reasonable when coming up with the 29.8% or did they have to manipulate their figures and still came up short. Other considerations include how compliant is the employer etc.
Q – If an employer has laid off all its workers and the only worker remaining is the owner, can the employer still qualify for CEWS?
A – yes as long as they would otherwise qualify.
Mona Tessier, CPA, CA
Principal, Indirect Tax Specialist