Canada Emergency Wage Subsidy (CEWS) - as extended by Order in Council 2021-0882 & as further extended by Bill C-2
Providing a wage subsidy to employers with reduced revenues. Employers must choose between the Canada Recovery Hiring Program and this program.
We expect that the extension of the Canada Emergency Wage Subsidy by Bill C-2 will result in an additional $5,456 million in subsidies being paid beyond those already approved by Order in Council 2021-0882. Of these additional subsidies, we expect $666 million to be paid under the Tourism and Hospitality Recovery Program, and $4,790 million to be paid under the Hardest-Hit Business Recovery Program. With this extension, we expect the gross cost of the Canada Emergency Wage Subsidy to be $106,680 million. This represents a net cost to the federal government of $92,307 million after accounting for corporate income tax recoveries.
Providing a wage subsidy to employers with reduced revenues. Employers must choose between the Canada Recovery Hiring Program and this program.
| Version | End date | Eligible Industries |
|---|---|---|
| Budget 2021 | 25 September 2021 | All |
| Order in Council 2021-0882 | 23 October 2021 | All |
Bill C-2
| Version | End date | Eligible Industries |
|---|---|---|
| Hardest Hit Businesses (HH) | 7 May 2022 | All |
| Travel and Hospitality (T&H) | 7 May 2022 | Hotels, tour operators, travel agencies, convention centers, festivals, restaurants and bars (for extension). |
The subsidy rate that an employer will receive depends on the extent of the employer’s revenue losses in the corresponding calendar month as shown in Appendix A. The employee remuneration eligible for subsidies is capped at $1,129 per week.
The basis of the model is a period-by-period profile of employment by revenue loss bracket, compiled from operational data. Current remuneration at businesses with revenue losses was projected by indexing to the trend in total employees supported. The trend was established based on the number of employees supported in periods for which the window to submit applications has closed. Employment by revenue loss range was then distributed across revenue loss ranges based on the average distribution. Subsidy rates were then applied to simulate the choice between CEWS and CRHP benefits and to calculate subsidies which would be paid to CEWS claimants, for each future period.
We expect that the extension of the Canada Emergency Wage Subsidy by Bill C-2 will result in an additional $5,456 million in subsidies being paid beyond those already approved by Order in Council 2021-0882. Of these additional subsidies, we expect $666 million to be paid under the Tourism and Hospitality Recovery Program, and $4,790 million to be paid under the Hardest-Hit Business Recovery Program. With this extension, we expect the gross cost of the Canada Emergency Wage Subsidy to be $106,680 million. This represents a net cost to the federal government of $92,307 million after accounting for corporate income tax recoveries.
The main sources of uncertainty relate to the magnitude and distribution of revenue losses across businesses, as well as employment at those businesses.
- Estimates are presented on an accruals basis as would appear in the budget and public accounts.
- Positive numbers subtract from the budgetary balance, negative numbers contribute to the budget balance.