CEWS 2.0: The Federal Government’s Revisions to the CEWS Program

by Gigi Poon | Aug 20, 2020 | News

CEWS 2.0: The Federal Government’s Revisions to the CEWS Program

August 20, 2020

The Federal government has recently announced changes to the Canada Emergency Wage Subsidy (CEWS). The revised program, or ‘CEWS 2.0’ as they are calling it, has a number of changes:

- Some businesses that did not meet the 30% revenue decline test were not eligible for CEWS 1.0 are now eligible for CEWS 2.0. This includes any wage-paying business that has any drop in revenues compared to the same month in 2019.
- The calculation for the subsidy has changed as well. The greater the drop in revenues, the greater the percentage subsidy.
- If the business suffered a drop in revenues of 62% or more, the subsidy will be greater under CEWS 2.0 compared to CEWS 1.0.
- For period 5 and 6 (July 5 – August 1 and August 2 – 30), the business has the option to use CEWS 1.0 or 2.0 to calculate the subsidy.
- Under CEWS 1.0, any employee who was without remuneration from the eligible entity in respect of 14 or more consecutive days in the qualifying period was not eligible. This rule has been eliminated under the CEWS 2.0.

We’ve laid out the CEWS 2.0 changes and details into the following sections:

The Redesigned CEWS Program
CEWS 2.0 “Base Percentage”
CEWS 2.0 “Top-Up Percentage”

All charts and data in this article are retrieved from the Department of Finance of Canada

The Redesigned CEWS Program

The CEWS program is now divided into nine four-week “qualifying periods” commencing on 15 March 2020 and ending on 21 November 2020. The amount of periods have increased since our last post about CEWS. Here’s a breakdown of the periods:

	Period	CEWS qualifying period	Current and prior reference periods	Alternative prior reference period
CEWS 1.0	1	15 Mar – 11 Apr, 2020	Mar 2020 – Mar 2019	Jan/Feb 2020
	2	12 Apr – 09 May, 2020	Apr 2020 – Apr 2019	Jan/Feb 2020
	3	10 May – 06 Jun, 2020	May 2020 – May 2019	Jan/Feb 2020
	4	07 Jun – 04 Jul, 2020	Jun 2020 – Jun 2019	Jan/Feb 2020
CEWS 2.0	5	05 Jul – 01 Aug, 2020	Jul 2020 – Jul 2019	Jan/Feb 2020
	6	02 Aug – 30 Aug, 2020	Aug 2020 – Aug 2019	Jan/Feb 2020
	7	31 Aug – 26 Sep, 2020	Sep 2020 – Sep 2019	Jan/Feb 2020
	8	27 Sep – 24 Oct, 2020	Oct 2020 – Oct 2019	Jan/Feb 2020
	9	25 Oct – 21 Nov, 2020	Nov 2020 – Nov 2019	Jan/Feb 2020

For Period 1 to 4 (original CEWS 1.0): if the entity experienced a 30% decline in revenue (or at least 15% for March), then the entity was entitled to a wage subsidy of 75% of the wages and salaries payable, up to a maximum of $847/employee/week.

Under CEWS 2.0, any entity that has experienced a decrease in revenue during the relevant calendar month compared to the corresponding 2019 calendar month will be entitled to a wage subsidy.

Key Elements

The 30% revenue decline requirement and corresponding 75% wage subsidy is replaced by a sliding-scale subsidy that consists of two parts:
- a “base subsidy” for an Eligible Employer that has experienced any level of revenue decline for a particular period, and
- an additional “top-up subsidy” for Eligible Employers that have experienced a revenue decline of greater than 50% for a particular period.
A “safe-harbour” rule for periods 5 and 6, which allows an eligible employer that have experienced a more than 30% revenue decline and would have been entitled to a larger per-employee subsidy under the original CEWS rules (CEWS 1.0) can use CEWS 1.0 instead of CEWS 2.0.
Elimination of the eligible employee 14 day rule – Any employee who was without remuneration from the eligible entity in respect of 14 or more consecutive days in the qualifying period was not eligible for CEWS 1.0. This rule has been eliminated under the new rules.
Prior period deeming rule – CEWS 2.0 has a similar rule, if an eligible entity’s actual revenue reduction percentage for the current period is lower than the immediately preceding period, the revenue reduction percentage for the current period is deemed to be equal to its revenue reduction percentage for the immediately preceding period.
Furloughed employees – Different rules for employees on special leave without pay.

CEWS 2.0 “Base Percentage”

The revenue reduction percentage is used to determine the “base percentage” of the subsidy for the eligible entity for the particular qualifying period.

- Period 5 & 6: Base % = 1.2 x Revenue Reduction %
- Period 7: Base % = 1 x Revenue Reduction %
- Period 8: Base % = 0.8 x Revenue Reduction %
- Period 9: Base % = 0.4 x Revenue Reduction %
- Base amount: Base % x Employees Eligible Remuneration Up to $1,129

The following illustrates how the base subsidy rate is calculated in Periods 5 – 9 for employers with a revenue decline of 50% or more and for employers with a revenue decline of less than 50%:

Timing	Period 5*: Jul 5 – Aug 1	Period 6*: Aug 2 – Aug 29	Period 7: Aug 30 – Sep 26	Period 8: Sep 27 – Oct 24	Period 9: Oct 25 – Nov 21
Maximum weekly benefit per employee	Up to $677	Up to $677	Up to $565	Up to $452	Up to $226
Revenue drop
50% and over	60%	60%	50%	40%	20%
0% to 49%	1.2 x revenue drop (e.g., 1.2 x 20% revenue drop + 25% = 24% base CEWS rate)	1.2 x revenue drop (e.g., 1.2 x 20% revenue drop + 25% = 24% base CEWS rate)	1.0 x revenue drop (e.g., 1.0 x 20% revenue drop = 20% base CEWS rate)	0.8 x revenue drop (e.g., 0.8 x 20% revenue drop = 16% base CEWS rate)	0.4 x revenue drop (e.g., 0.4 x 20% revenue drop = 8% base CEWS rate)
* In Periods 5 and 6, employers who would have been better off in the CEWS design in Periods 1 to 4 would be eligible for a 75% wage subsidy if they have a revenue decline of 30% or more.

CEWS 2.0 “Top-Up Percentage”

For employers whose revenue decline is more severe (more than 50%), a “top-up” of up to 25% of the base subsidy is available.

To determine whether it qualifies for a “top-up” and has met the greater-than-50% threshold, eligible entity compares its average qualifying revenue for the 3 prior months in 2020 to the same 3 months in 2019 (or if the eligible entity has elected to use January/February 2020 as its “prior reference period”, then to its average qualifying revenue for January/February 2020).

The basic top-up rate % calculation: 1.25 x (Revenue decline % for 3 month – 50%)

The following table illustrates how the top-up subsidy rate is calculated:

3-month average revenue drop	Top-up calculation = 1.25 x (3 month revenue drop – 50%)	Top-up CEWS rate
70% and over	1.25 x (70%-50%) = 25%	25%
65%	1.25 x (65%-50%) = 18.75%	18.75%
60%	1.25 x (60%-50%) = 12.5%	12.50%
55%	1.25 x (55%-50%) = 6.25%	6.25%
50% and under	1.25 x (50%-50%) = 0.0%	0.00%

The following chart illustrates the combined calculation:

Timing	Period 5*: Jul 5 – Aug 1	Period 6*: Aug 2 – Aug 29	Period 7: Aug 30 – Sep 26	Period 8: Sep 27 – Oct 24	Period 9: Oct 25 – Nov 21
Maximum weekly benefit per employee	Up to $960	Up to $960	Up to $847	Up to $734	Up to $508
Revenue drop in the current 1-month reference period
50% and over	85% (60% base CEWS + 25% top-up)	85% (60% base CEWS + 25% top-up)	75% (50% base CEWS + 25% top-up)	65% (40% base CEWS + 25% top-up)	45% (20% base CEWS + 25% top-up)
0% to 49%	1.2 x revenue drop + 25% (e.g., 1.2 x 20% revenue drop + 25% = 49% CEWS rate)	1.2 x revenue drop + 25% (e.g., 1.2 x 20% revenue drop + 25% = 49% CEWS rate)	1 x revenue drop + 25% (e.g., 1 x 20% revenue drop + 25% = 45% CEWS rate)	0.8 x revenue drop + 25% (e.g., 0.8 x 20% revenue drop + 25% = 41% CEWS rate)	0.4 x revenue drop + 25% (e.g., 0.4 x 20% revenue drop + 25% = 33% CEWS rate)
* In Periods 5 and 6, employers who would have been better off in the CEWS design in Periods 1 to 4 would be eligible for a 75% wage subsidy if they have a revenue decline of 30% or more.

As always, if you have any questions or need assistance in applying for CEWS, please contact your Provision relationship manager.

As Senior Relationship Manager with Provision CPA, Vernon believes open communication and a strong working relationship are vital to success. He strives to anticipate client needs and find opportunities for strategic and tactical planning. Vernon finds it rewarding when he has helped play a role in developing a tax plan that turns into a savings or profit maker for the client. It’s a privilege to be involved in something as personal as an entrepreneur’s business vision.

One of the best pieces of advice he was ever given was “Give all that you can without expectation. No matter how much we give away, there will never be any shortage because giving brings its own reward.” A fun fact about Vernon is that he used to be a self-employed musician. Art and music are part of his daily life outside of the office, and you’ll find him enjoying it any time he can with his family.

As the Client Advocate and Admin Manager, Stefanie wears many hats. Front-facing, she spearheads onboarding for new clients and answers front desk phone calls and emails, while internally managing Provision CPA’s Admin team behind the scenes. Stefanie enjoys the act of troubleshooting and figuring out how to solve problems in a way that adds value to her clients and ensures they feel heard.

Stefanie has worked at Provision CPA for seven years now and she describes every day as an adventure. She’s fulfilled by the constant ability to learn and take on something new, with the personal and professional support of her team.

The most important thing to know about Stefanie: Don’t let her RBF fool you, she loves to laugh and make others laugh, too!

From a young age, Raina has always been interested in solving calculations and numbers, which drove her to pursue a career in Accounting as a CPA. 13 years later, she still loves the creativity she gets to bring with taxes and advisory. As a Senior Relationship Manager at Provision CPA, she assists in finding solutions to the entrepreneur’s accounting and tax needs. She does this by constantly trying to think ‘big picture’ and finding ways to make tax and accounting as simple as possible for her clients.

What Raina enjoys most about her role is meeting new people and learning about their businesses and challenges. The best piece of advice she’s ever been given was “we constantly need to change, grow, and learn.”

Outside of work, you’ll find her spending time with her two little ones and hubby. She also loves to travel and has spent 27 years in busy Mumbai, India!

Kulveer is a Junior Accountant at Provision CPA. To Kulveer, developing relationships and trust with business owners and guiding them through every day situations is what she finds most fulfilling. She’s always up for a challenge and appreciates the autonomy Provision provides to work with a diverse roster of businesses and coming up with solutions to their problems.

The best piece of advice she’s ever received was to “count your blessings no matter what else is going on in life.”

When Kulveer’s not working, you’ll find her spending time with family and friends, tutoring, or exercising.

With seven years of experience in the Accounting industry, Rachel understands the deep need to provide entrepreneurs with professional advice in a clear, concise, and consumable way. Rachel first studied Chinese Literature in University but always had a calling for math (mainly because she’s good at it!). It was when she immigrated to Canada that she decided to pursue a career in Accounting.

Now, as an Intermediate Accountant at Provision CPA, she still gets fired up organizing numbers for businesses. Rachel describes her role as a bridge between bookkeepers and managers – she’s involved in not only the minute details of a business, but the big, granular picture as well.

The best piece of advice Rachel’s been given was “Don’t give up easily, nothing is impossible”, and she applies this to her day-to-day-life.

Outside of work you’ll find Rachel spending quality time with her three kids, reading books and watching movies.

Ahmed is an Intermediate Accountant at Provision CPA. He’s always had an analytical mind and an insatiable curiosity for business. Ahmed knew early on that he wanted to get involved in the field of finances. After studying business at Kwantlen Polytechnic University, he explored a career in Accounting.

Ahmed loves being the entrepreneur’s trusted partner in all things finance. He enjoys helping them grow their business by providing astute financial advice and making sure tax season is a smooth process for them. He also takes pride in making sure his clients can make the best decisions for their businesses, helping them succeed year-round.

When he’s not working, you’ll find Ahmed exploring the nature B.C has to offer. The best piece of advice Ahmed was once given is “Focus on improving at your passion and the rewards will follow.”

As an Administrative Database Analyst, Kristen makes sure that Provision’s clients are taken care of by analyzing business processes, identifying gaps, and providing creative solutions that help the Provision team to do their job most successfully.

Before landing at Provision, she explored several industries from marketing to manufacturing, and pursued her MBA in 2017. Kristen was drawn to the firm’s flexible and collaborative work environment, and strong focus on training and mentoring team members. Collaborating with her team, Kristen’s goal is to make accounting simple while also instilling confidence in clients that their work will be done on time with exceptional service.

The best piece of advice she has ever been given was “Don’t stop learning. Every day is an opportunity to learn something new.” Outside of work you’ll find Kristen in the kitchen learning new ways to make traditional food. A fun fact? She used to work at a brewery as a Beer Quality Tech, which is where she discovered her passion for process improvement.

Sarah’s love for tax (believe it or not) and passion for entrepreneurship led her to Provision CPA. Her role focuses on quality control, making sure all team members are well-equipped, and that processes are efficient and effective so that clients receive excellent service. Being able to serve, add value, and alleviate a client’s burden while also celebrating their entrepreneurial journey is rewarding to Sarah.

Did you know that Sarah had conquered 7 continents before the age of 30? Not only is she a globetrotter, she can also speak 5 languages. When she’s not working, you’ll find Sarah embracing her role as a full-time dog mom.

Johnny is a Manager at Provision CPA, with accounting industry experience from small local firms to large international firms. He makes sure that every client is in the most tax optimal position by performing quality control on files to ensure accuracy.

Johnny takes on any opportunity to put his entrepreneurial hat on! At the firm, he enjoys working closely with entrepreneurs and helping them to navigate the ups and downs of owning a business. Johnny believes that the key to success lies in providing excellent customer service and finds deep fulfillment in helping his clients grow and focus on their business, without them having to worry about the accounting and tax work in the back-end.

A fun fact you probably didn’t know about Johnny is his love for basketball and hockey (it’s still undecided which one he loves more). Out of the office, he’s shooting hoops with friends and visiting the local park with his family.

Maria has been at Provision CPA for almost 13 years as a Staff Accountant, working directly with entrepreneurs and getting to know their businesses and lives on a deep level. Ultimately, she wants every client to feel that she is there for them. To Maria, it’s not just about numbers or making sure everything looks correct on paper – she wants every business owner to feel heard.

Maria views every challenge as a new experience and brings positivity to problem-solving. At the end of the day, she goes home feeling fulfilled knowing she gave her all.

When she’s not working, you’ll find Maria knocking off another local trail from her long list of hikes. Since she was a Girl Guide Leader for 20 years, she knows her stuff! Ask her for her B.C. hiking bucket list.

With over 20 years of entrepreneurial experience, Bita has had quite the career journey – from owning a bakery, then a flower shop, to selling real estate and getting her Mortgage Broker license, she’s done it all.

Some time ago, Bita decided to go back to school and start a new journey in becoming a CPA. She now brings the passion and determination of an entrepreneurial spirit to her team and clients at Provision CPA.

Bita’s goal is to make her clients’ “accounting life” as stress-free and straightforward as possible. Her strength lies in her ability to speak the “entrepreneurial language”.

The best piece of advice she’s been given is to “give 110% in everything you do”, whether that’s troubleshooting client issues, or riding her scooter (rain or shine) you’ll find Bita fully committing to the job.

After working for multinational companies in the past, Vanessa was drawn to Provision CPA because of a deep values alignment. What she loves about working at Provision is the opportunity to help business owners improve their accounting processes and problem solve through a strategic lens.

Vanessa’s ‘why’ is dedication. She’s dedicated to always giving her best to both her clients and coworkers. Sarah also loves to find opportunities to grow, and when there are gaps that need improvement, she embraces the challenge with open arms. The best piece of advice she was given was from her mom, to “follow your dreams” you’ll see her applying this to both her work and personal life.

When Vanessa isn’t working, she’s going for long walks to “get some exercise” but we all know she’s actually catching Pokémon!

From strategic alignment through to execution, as a Manager, Oliver is involved in supporting every stage of the entrepreneur’s journey at Provision CPA.

Oliver brings experience from working at a large firm in the UK, but he prefers to work in a closer-knit environment where he can be more involved in delivering impact and results for clients. Oliver finds working with people who have a real passion for their companies contagious, proving to him that there IS a way to make accounting “exciting” (most of the time).

What you might not know about Oliver, is that bookkeeping is his superpower. Most people don’t like dealing with the financial side of things – luckily, that’s where he thrives. His experience working with a variety of businesses and industries of different sizes gives Oliver a lens into understanding how to manage and help achieve each client’s unique desire.

The best piece of advice he was ever given? “Never turn down an invitation to do something new.”

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CEWS 2.0: The Federal Government’s Revisions to the CEWS Program

CEWS 2.0: The Federal Government’s Revisions to the CEWS Program

August 20, 2020

The Federal government has recently announced changes to the Canada Emergency Wage Subsidy (CEWS). The revised program, or ‘CEWS 2.0’ as they are calling it, has a number of changes:

We’ve laid out the CEWS 2.0 changes and details into the following sections:

The Redesigned CEWS Program

Key Elements

CEWS 2.0 “Base Percentage”

CEWS 2.0 “Top-Up Percentage”

QUICK LINKS

CONTACT

STAY CONNECTED

Vernon Jones

Stefanie Jordan

Raina Bellani

Kulveer Kaur Dhillon

Rachel Xu

Ahmed El-Alem

Kristen Duncanson

Sarah Lee

Johnny Yip

Maria Lee

Bita Bassir

Vanessa Borba

Oliver Porter