To say that COVID-19 blind sided almost every business in the world is stating the obvious. Despite this gargantuan financial impact, however, a lot of individuals have settled into a nice rhythm since the onset of the pandemic. It’s human nature, after all; we tend to adapt.

But while many fortunate Canadians have gone from panic socializing on House Party, to enjoying guilt free Netflix without social obligation, the economic reality of COVID-19 still bears down on business owners across the country. Time strapped, stressed, and facing unrelenting uncertainty, navigating the government subsidies has been both challenging and critical to their survival. 

The series of financial measures to support Canadians and Canadian businesses were released in stages. Each stage typically started with an initial announcement, followed by preliminary written-form information, FAQs with technical details, followed by consultation periods where the Department of Finance would collect feedback from business owners and advocacy groups representing professional interests.

Wage subsidies were, and remain today, one of the biggest focuses of small and medium-sized businesses. The wage subsidies represent the largest flow of capital from government to businesses in Canada during the pandemic, and smaller businesses are more likely to be adversely affected by COVID-19's economic impact. According to Statistics Canada, businesses with under 100 employees are more likely to have reported over 20% decline in revenue in early 2020.

As of the beginning of October, the Government of Canada has approved roughly 1.2 million applications and paid $40 billion in subsidies from the Canadian Emergency Wage Subsidy alone.

From Humi's own experience supporting Canadian SMBs throughout this period, most business owners have faced varying degrees of challenge utilizing the wage subsidies. This is primarily due to the confusion around differentiating the types of wage subsidies available, how they interact with each other as well as with employee-oriented measures like the CERB, and keeping track of the latest updates to wage subsidies.

In an effort to help businesses navigate the subsidies, we created two reference charts to outline the notable characteristics:

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General approach: the "year-over-year" approach, where the reduction in revenue determination is made by comparing the change in qualifying revenue, year-over-year, for the calendar month in which the claim period began.

Alternative approach: for an eligible employer that was not carrying on business in the previous year. The reduction in revenue determination is made by comparing the current period's revenue with the average of Jan and Feb 2020 revenue.

Deeming rules : once an eligible employer has determined it has experienced the required reduction in revenue for a particular claim period, it is automatically considered to have experienced the required reduction in revenue for the following claim period.

Safe harbour rules: in claim periods 5 and 6, an eligible employer with a revenue decline of 30% or more would receive a wage subsidy rate of at least 75%.

Depending on the type of subsidy and the period you're claiming the subsidy for, the mechanics of the subsidies may get very intricate. The CRA has been releasing comprehensive resources to help business owners determine eligibility, calculate claim, and apply for claim.

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Resources for the 10% Temporary Wage Subsidy‍

TWS Overview

PD27 10% TWS Self-Identification Form for Employers

Resources for the 75% Canadian Emergency Wage Subsidy

CEWS Overview

CEWS Application Guide

CEWS Technical FAQ

CEWS T4 reporting requirements

Additional resources

Humi's Covid-19 resource hub

Canada Emergency Business Account (CEBA)

Regional Relief and Recovery Fund (RRRF)

Canada Emergency Commercial Rent Assistance (CECRA)

Business Development Bank of Canada's relief programs

While the above resources are comprehensive, crunching numbers and working through data can be a challenge. Despite the fact that it’s never been so critical, it simply isn’t what most of us got into business to do. If you’re in further need of guidance, your payroll provider should be keen to assist you, and there are many local accounting firms that have worked quickly to streamline the process of aiding with applications as well. 

Aside from securing the benefit of these subsidies if you are in need, I urge everyone to remember that they are not intended for businesses that are unaffected by the pandemic. Unfortunately, the potential audit to ensure that paid benefits were sent to truly eligible employers may be even more painful than the initial applications. In the end, the audit is a positive process that may uncover many bad actors within our country, and it’s important that everyone is prepared in the case they are selected. We’ve written additional guidance on preparing for this audit, which is a must-read for anyone leveraging the subsidies.  

For those of us who have been lucky enough to survive this long, it’s my hope that we can all emerge stronger, with new perspectives and fortitude, leading to a brighter future for all Canadians. Whether your business has been damaged or just slightly dinged by COVID-19, myself and the team at Humi are here to support you, to help make that future a reality.