Here’s who’s eligible and how to apply for Canada’s coronavirus wage subsidy

If you’re a business struggling with the financial effects of the coronavirus pandemic, the government’s promised wage subsidies are on the way.

Prime Minister Justin Trudeau on Monday shared some of the details on the new subsidy program for businesses, which was significantly amended last week after criticisms that the initial plan to cover 10 per cent of wages wasn’t nearly enough to make a difference.

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Trudeau said last week that plan would now cover up to 75 per cent of wages.

But there remain unanswered questions about how it all will work.

Here is what is and is not known.

Who is eligible?

It’s important to note right away that there isn’t a lot of information about the specifics of how the subsidies will work — and in particular, how those accessing them will be held accountable.

It is clear, however, that it won’t just be small and medium-sized businesses getting access to this.

Trudeau said on Monday that the subsidies will be open to any business, big or small, along with charities and not-for-profit organizations.

Those applicants must have suffered at least a 30 per cent decline in revenue because of the coronavirus pandemic, he said, noting that the goal is to ensure as many people as possible can keep their jobs and paycheques.

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“For people to get through this tough time and for the economy to rebound, people have to keep their jobs,” Trudeau said. “That’s why the number of employees is not the eligibility criteria we’ve chosen.”

Deputy Prime Minister Chrystia Freeland also explained the rational behind including large corporations in the wage subsidy plan when questioned by journalists on Monday.

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“We understand that coronavirus and the economic impact of coronavirus does not make any distinction between small companies, medium companies, large companies,” she said.

“The idea of this program is to conserve Canadian jobs.”

Freeland would not answer when asked whether any large companies that take the subsidy would face criteria such as not raising executive bonus pay.

How will it work?

For those that get the subsidy, the government will then cover “up to 75 per cent” of employees’ wages — but only for the first $58,700 worth of salary.

That means the maximum amount of subsidy would translate to $847 per week, unless an employer tops up any salary exceeding $58,700 from the business’s own funds.

How all of that will be calculated — and whether it will come in the form of a payroll deduction or a cheque from the government — isn’t entirely clear right now.

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The plan for the previous 10 per cent wage subsidy had been for the company to receive the subsidy not via cheque but through a reduction in how much income tax it sends to the Canada Revenue Agency.

What is not clear at the moment is whether the coming plan will use that same model.

The government has changed course quickly on similar promises in the past, including by combining two promised emergency benefit programs into the single COVID-19 Emergency Response Benefit.

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There’s also a lack of clarity on how businesses will be required to prove they have seen a 30 per cent decline in revenue, whether applications will be vetted before the subsidy is granted or what kind of criteria will be in place to determine who gets the maximum 75 per cent wage subsidy.

It’s also not clear whether there will be tiers of subsidies or what the punishment could be for companies that try to take advantage of the system, though Trudeau warned such consequences would be “severe.”

In other words: some of the big details are clear, but the process itself remains opaque.

When will it roll out?

This is another big unknown.

Trudeau was asked specifically about the timeline here during his comments to journalists on Monday but didn’t give a clear answer.

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“The important thing is to reassure employers and workers across the country that we will be there for them,” he responded, saying the details were still being finalized.

He added that Finance Minister Bill Morneau and Small Business Minister Mary Ng will be providing more details on Tuesday, but also noted that the Canada Revenue Agency is focused right now on rolling out the new COVID-19 Emergency Response Benefit.

That new benefit of $2,000 per month for individuals who aren’t able to work because of the coronavirus pandemic is set to roll out on April 6 and be sent to applicants around 10 days later.

Because of that, it’s not yet clear whether the wage subsidy launch will be pushed back until after that first program gets up and running, or whether it will overlap with the launch.

“This help will be getting to them soon,” Trudeau said.

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