Update: Yesterday, August 4th, I have purchased a proprietary tool to assist our clients with the calculations of the Canada Emergency Wage subsidy. This tool allows us to stay up to date with all the new changes in the calculations as well as always be up to date with calculations for our clients! The tool provides us a road map for all calculations and be able to assist should CRA coming knocking on your door in the future.
If you would like to learn more about how we can help, make sure to reach out to me at jrideout@anraccountants or our Payroll Specialist, Marilyn Lister at email@example.com. Either of us can be reached at 506-466-4040.
Just when you think you have something figured out, it all changes.
That is what is happening with the Canada Emergency Wage Subsidy. Tax Geeks across Canada are calling it CEWS 2.0, and I am rolling with that title because it is easier to type. This week it was announced by the Federal Government that changes to the CEWS was coming and it is good news actually.
CEWS 2.0 will allow for any business with a decrease in revenue of more than 0% to qualify for the program and receive some amount of CEWS funding. The new way to calculate the amount of funding under the program kicks the door wide open and allows for businesses of all sizes across Canada to apply for CEWS funding.
You are probably saying, what’s the bad news? The bad news is that CEWS 2.0 has gotten extremely complicated to calculate. There are transition rules for Period 5 (July 5 to August 1) and Period 6 (August 2 to August 29). Starting in Period 7 (August 30 to September 26), the CEWS 2.0 fully kicks in bringing with it a completely new set of formulas for calculating the program funding. The Government released a background document to explain the CEWS 2.0 and its 22 pages long with 6 different tables. You can find the document here: https://www.canada.ca/en/department-finance/news/2020/07/adapting-the-canada-emergency-wage-subsidy-to-protect-jobs-and-promote-growth.html
The bad news is something that ANR can help you with. I am currently reviewing the draft legislation, the information provided by the Government on the background document and reviewing information made available from my contacts across Canada. Huge shout out to Moody Tax in Calgary for their awesome blog post on CEWS 2.0!
Moving forward, this is a great opportunity to receive some funding for your business to assist in paying wages to your employees. The changes being made are positive and will assist our local businesses in being successful during these uncertain times. I encourage you not to become discouraged by the new format and calculations. In the past several months, we prepared CEWS applications, we have reviewed CEWS applications and have provided guidance to folks completing CEWS applications. We are building a file around these applications that will ensure if CRA is to audit your claim (which CRA has already stated, they will be focusing on this Program as early as 2021), it will stand on its own. We are here to assist you in navigating the CEWS 2.0.
CEWS 2.0 will come into affect for Period 5, which is July 5 to August 1st. In the days that follow this Period in early August, we will be ready to assist you with your CEWS applications. Check back here for more information or feel free to reach out.
Until next time,