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Further Details Given on the Wage Subsidy Extension

The federal government is now proposing another extension of the Canada Emergency Wage Subsidy (CEWS) until December 19, 2020 and is expanding the eligibility criteria to include all businesses that have experienced a revenue decrease.

CEWS was first put in place for an initial 12-weeks and has since been extended in several phases, which to date has only provided the 75 percent wage subsidy to employers that have experienced at least a 30% decrease in revenue.

“CTA is strongly supportive of today’s announcement. The CEWS is an important program for many carriers and we are pleased to see it extended until December,” said Jonathan Blackham, CTA Director of Policy and Public Affairs. “We are also very happy to see the government move away from the 30-percent threshold and make the CEWS scalable. Many carriers in need of assistance have been falling just below the current qualification threshold and this why we have long supported this kind of approach.”

Effective July 5, 2020 (i.e., Period 5 and subsequent periods), employers that have been affected by the COVID-19 crisis would be eligible for a base CEWS amount for active employees. The rate of the base CEWS would now vary depending on the level of revenue decline, and its application would be extended to employers with a revenue decline of less than 30 per cent.

The specified rate would be determined based on the change in an eligible employer’s monthly revenues. See Government’s tables here. On top of that, the businesses that have been hit the hardest by the economic downturn caused by the COVID-19 pandemic could receive an additional 25 per cent top-up subsidy.

Today’s announcement mirrors requests by the Canadian Trucking Alliance (CTA) since the CEWS was first announced. Since that time, CTA has continually pushed for the CEWS to be made scalable, so that it can include a larger number of businesses who may need help.

As CTA’s extensive surveying quickly showed after the CEWS was first introduced, nearly 50 percent of trucking companies did not qualify for the CEWS either fully, or in part based on the program’s 30 percent threshold. In fact, many fleets fell just below the threshold of the 30 percent decreases in revenue required to access the program – in many cases, carriers missed it by just a few percentage points.

The Canadian Trucking Alliance also supports the philosophy contained in today’s announcement regarding the continuation and need to phase the program out by December 2020. This approach should allow for a smooth phase-out so that businesses can plan for a time when the CEWS will not be available.

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