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Regulations available for CEWS and CERS extensions

Regulations available for CEWS and CERS extensions

These subsidy extensions came into force on December 20, 2020

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Finance has enacted the regulations required to extend the Canada Emergency Wage Subsidy (CEWS), Canada Emergency Rent Subsidy (CERS) and Lockdown Support Subsidy for eligible businesses until March 13, 2021 (three additional four-week periods). The extensions for these COVID relief programs were announced during the 2020 Federal Fall Economic Update.

In the Update, the government advised that it will propose details of these subsidies for periods beyond March 13, 2021 at a later date.

Background

CEWS extension

These regulations increase the CEWS to a maximum of 75% (from 65%) of eligible wages for the qualifying periods from December 20, 2020 to March 13, 2021 (i.e., periods 11 to 13). The maximum base subsidy will remain at 40% and the maximum top-up wage subsidy rate will increase to 35%.

These regulations also amend the weekly wage subsidy for a furloughed employee from December 20, 2020 to March 13, 2021 to be the lesser of:

  • The amount of eligible remuneration paid in respect of the week, and
  • The greater of:
    • $500, and
    • 55% of baseline remuneration in respect of the eligible employee determined for that week, up to a maximum subsidy amount of $595.

For the latest on this subsidy, see TaxNewsFlash-Canada 2020-87, "Highlights of the 2020 federal fall economic update" and TaxNewsFlash-Canada 2020-80, "Canada provides details on latest wage subsidy changes".

CERS extension

These regulations extend the current rate structure for the CERS until March 13, 2021, using the same reference periods as under the CEWS. The CERS allows employers to claim a subsidy of up to 65% of eligible expenses (subject to certain limits), depending on revenue decline.

The Lockdown Support Subsidy is also extended to March 13, 2021, under these regulations. As a result, eligible organizations will be able to receive an additional 25% Lockdown Support Subsidy on eligible expenses until this date.

For details on the CERS and Lockdown Support Subsidy, see TaxNewsFlash-Canada 2020-87, "Highlights of the 2020 federal fall economic update" and TaxNewsFlash-Canada 2020-79, "Canada launches rent subsidy support for businesses".

For more information, contact your KPMG advisor.

Information is current to January 12, 2021. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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