Wondering what the latest details surrounding Canada’s COVID-19 economic response plan are? Our small business accountant Chestermere financial expert has dug through the federal government’s plan so you don’t have to, and rounded up the most important points.
The federal government’s economic response plan for COVID-19 has changed a lot since it was first unveiled. After listening to industry experts and lobbyists, Justin Trudeau’s Liberal minority government has beefed up their support measures across the board. One of the biggest changes has been the introduction of the Canada Emergency Wage Subsidy (CEWS), which essentially replaces their previous Temporary 10% Wage Subsidy. The CEWS casts a much wider net and provides employers a lot more support. In our article today, we’ll look more closely at the CEWS and another major measure that should help Alberta, both of which have been put in place since our last article.
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Canada Emergency Wage Subsidy (CEWS)
In an effort to help businesses across Canada avoid laying off their employees, and to help them rehire ones they may have already let go, the federal government unveiled the CEWS. With a wider net than the Temporary 10% Wage Subsidy and a significant increase in the amount of an employee’s remuneration that’s being covered, the CEWS is Canada’s flagship COVID-19 economic response. It works as follows:
- Subsidy covers 75 per cent of an employee’s wages up to $847 a week
- Employers of any size or in any sector who have seen at least a 15 per cent drop in gross revenues in March, and 30 per cent in April and May, are eligible
- Program runs for a 12-week period, from March 15 to June 6, 2020
The CEWS has already resulted in some major companies, most notably Air Canada, rehiring employees they had temporarily laid off. In the case of Air Canada, they rehired 16,500 of their employees that they had laid off after receiving confirmation the airline would qualify for the CEWS.
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Support for the Alberta energy sector
In addition to the CEWS, the federal government has recently unveiled their plan to support the struggling and hard-hit energy sector in Alberta. These measures include:
- Up to $1.72 billion to clean up orphan and inactive oil and gas wells in Alberta, Saskatchewan, and British Columbia (which is expected to support/maintain around 5,200 jobs in Alberta)
- Up to $750 million for a new Emissions Reduction Fund, which will support workers while focusing on lowering emissions in the oil and gas industry
The new Emissions Reduction Fund will work by providing conventional and offshore oil and gas companies with mainly repayable contributions as they invest in, and work towards, lowering their greenhouse gas emissions.
With these two new measures, the federal government is committing nearly $75 billion worth of support to Canadian businesses. If you have any questions about how to navigate and apply for the CEWS, be sure to contact us today to book your FREE consultation.
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If you’re concerned about the state of your personal finances or taxes in light of the ongoing pandemic, book a free consultation with one of our trusted Chartered Professional Accountants today and let us help guide you through this uncertain economic time.
