On March 18, 2020, the Government of Canada announced the details of its COVID-19 Economic Response Plan. Included in the measures announced to support Canadian businesses was a temporary wage subsidy for eligible small employers.
The wage subsidy is a three-month measure that is available to Canadian-controlled private corporations (CCPC) that have an existing business number and payroll program account with CRA (as of March 18, 2020) and pay salary, wages, bonuses, or other remuneration to an employee, so long as the CCPC’s taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, is less than $15 million. We note the wage subsidy is also available to non-profit organizations and registered charities.
The subsidy is equal to 10% of the remuneration paid between March 18, 2020 and June 20, 2020 up to $1,375 per employee to a maximum of $25,000 per employer. Associated CCPC’s will not be required to share the maximum eligible amount of $25,000 per employer. The subsidy will be received by reducing current remittances of federal, provincial or territorial income tax, with certain conditions.
**UPDATE** (March 27,2020)
On March 27, 2020, Prime Minister Trudeau announced that the subsidy is going to be increased from 10% to 75% for qualifying businesses. The specific details have not yet been announced.
More information on the Temporary Wage Subsidy for Employers can be found here.
More information on the Government of Canada’s COVID-19 Economic Response Plan can be found here.