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Explainer: Changes to the Canada Emergency Wage Subsidy

Smiling professional man with clasped hands, looking sideways.

At the end of July, the federal government passed legislation to redesign the Canada Emergency Wage Subsidy (CEWS).

The good news: the CEWS now includes more businesses and will run to the end of the year.

The bad news: the program is more complicated.

The original CEWS

In the original program, an employer qualified if their revenues declined at least 30% compared with a pre-COVID-19 reference month. The program provided a wage subsidy of 75% of an employee’s pre-COVID-19 earnings, up to a maximum of $847 per week.

The subsidy was initially in place from March 15 to June 6 and later extended to August 29, 2020, for a total of 24 weeks.

The new CEWS

With the redesigned CEWS, all declines in revenue will qualify for some level of support. Under a new sliding scale, businesses whose revenues decline less will get less support.

The program will also provide less support over time. Whereas the original CEWS started with a 75% wage subsidy in March 2020, this will fall to 20% or less by November 2020.

Effective July 5, 2020, the CEWS has two parts: a base subsidy and a top-up subsidy. The top-up is available to employers whose revenues have fallen by more than an average of 50% in a three-month period.

Base subsidy

The base subsidy is available to all businesses whose revenues have declined, but the calculations are different depending if your revenues fell by between 0% and 49% or by more than 50%.

1) Your revenues fell by between 0% and 49%

Here’s the calculation to determine your CEWS rate and the amount of your wage subsidy.

Find the period, then multiply the predetermined factor (either 1.2, 1.0, 0.8 or 0.4) by your percentage revenue drop to determine your CEWS rate. Then multiply this CEWS rate by your employee’s pre-COVID wages.

July 5–Aug. 1

1.2 x revenue drop x wages

Aug. 2–Aug. 29

1.2 x revenue drop x wages

Aug. 30–Sept. 26

1.0 x revenue drop x wages

Sept. 27–Oct. 24

0.8 x revenue drop x wages

Oct. 25–Nov. 21

0.4 x revenue drop x wages

Example: Dr. Arthurs’ revenues decline by 45% in the July 5–August 1 period and by 25% in the October 25–November 21 period, compared with the same reference periods last year.

Her administrative assistant earns $50,000 annually, or $962 per week. Here’s the wage subsidy Dr. Arthurs will get:

  • July 5–August 1 = 1.2 x revenue drop of 45% x $962 per week = $519 per week
  • October 25–November 21 = 0.4 x revenue drop of 25% x $962 per week = $96 per week

2) Your revenues fell by more than 50%

The CEWS rate is fixed. Here’s the calculation.

Find the period, then multiply the CEWS rate (either 60%, 50%, 40% or 20%) by your employee’s pre-COVID wages.


CEWS rate (multiply by employee’s wages)

Maximum subsidy per week

July 5–Aug. 1



Aug. 2–Aug. 29



Aug. 30–Sept. 26



Sept. 27–Oct. 24



Oct. 25–Nov. 21



Example: Dr. Modi's revenues decline by 80% in the July 5–August 1 period and by 50% in the October 25–November 21 period, compared with the same reference periods last year.

His administrative assistant also earns $50,000 annually, or $962 per week. Here’s the wage subsidy Dr. Modi will get:

  • July 5–August 1 = 60% x $962 per week = $577 per week
  • October 25–November 21 = 20% x $962 per week = $192 per week

In addition to these amounts, Dr. Modi will likely also qualify for the top-up subsidy.

Top-up subsidy

If your practice income has dropped by more than an average of 50% over a three-month period, you will get a top-up wage subsidy, of up to 25%.

Here’s the top-up calculation:

  • Calculate your average three-month revenue drop; it must be more than 50%.
  • Subtract 50% from this percentage drop.
  • Multiply by 1.25.

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%



1.25 x (65% – 50%) = 18.75%



1.25 x (60% – 50%) = 12.5%



1.25 x (55% – 50%) = 6.25%


50% and under

1.25 x (50% – 50%) = 0.0% 


Example: Dr. Modi's monthly revenues from July 5 to September 26 drop by an average of 65%, giving him a top-up subsidy of 18.75%.

Here’s how much he will get in total for the base subsidy and top-up subsidy for his employee over July 5–August 1:

Base subsidy

60% x $962 per week


Top-up subsidy

18.75% x $962 per week


Total CEWS 



The safe harbour rule

Under the “safe harbour” rule, employers who would have been better off with the original CEWS for July 5 to August 29 will still be eligible for the 75% wage subsidy if they have a revenue decline of 30% or more.

Payroll account number

Previously, to qualify for the CEWS, an employer needed to have a payroll account number with the Canada Revenue Agency. But some self-employed physicians do not have a payroll number (e.g., those in cost-sharing group arrangements) because they use another entity to administer the payroll.

This issue has now been addressed so an employer can qualify for the CEWS even without a payroll number.    

For more information

The rules are complex, and determining eligibility can be difficult, especially for physicians who use different structures, including group practices. Your accountant and tax advisor are in the best position to analyze your specific situation.

If you have questions about how changes to your cash flow affect your investment, retirement or other financial plans, talk to an MD Advisor*.

*MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.

The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.