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On March 3, 2021, the federal government announced that it plans to extend the current subsidy rates for the Canada Emergency Wage Subsidy (“CEWS”), the Canada Emergency Rent Subsidy (“CERS”), and Lockdown Support until June 15, 2021. The government has also proposed changes to the calculations used for determining eligibility to claim these benefits and the amount of benefits that eligible employers would receive, which are intended to help eligible businesses and organizations as they continue to grapple with financial challenges during the COVID-19 pandemic.

The following subsidy rates, which were previously slated to end on March 13, 2021, will be extended and continue to apply from March 14 to June 5, 2021 (the “Extension Period”):

  • CEWS: The maximum base subsidy rate for active employees will remain at 40%, and the maximum top-up subsidy rate for employers most adversely impacted by the pandemic will remain at 35%. As such, the maximum combined subsidy rate will remain at 75%;
  • CERS: The maximum subsidy rate will remain at 65%; and
  • Lockdown Support: The maximum rate will remain at 25% and will continue to be provided in addition to the CERS, providing eligible businesses with rent support of up to 90% overall.

Furloughed Employees

A separate subsidy rate structure will continue to apply to furloughed employees under the CEWS. The amount of CEWS funding that employers will be able to claim in respect of furloughed employees will continue to be aligned with the amount of benefits available through Employment Insurance during the Extension Period. As a result, employers who qualify for the CEWS will continue to be able to claim a wage subsidy of up to $595 per week for each furloughed employee.

Reference Periods

The government has proposed revised reference periods for calculating employers’ declines in revenues during the pandemic for the purposes of determining CEWS and CERS eligibility and the subsidy amounts for eligible employers.

Since the CEWS and CERS launched, an employer’s decline in revenues has generally been determined by comparing its revenues in a given month with its revenues in the same month of the previous year. Given that the pandemic has gone on for nearly a year, the government has proposed to allow employers to continue comparing their revenues in a given month to the same calendar month in 2019 for qualifying periods during the Extension Period (i.e., periods 14 to 16), to ensure that the general approach continues to calculate employers’ declines in revenues relative to a pre-pandemic month.

An employer may also continue to use an alternative approach, whereby its change in revenues is determined by comparing its revenues in a given month to the average of its revenues in January 2020 and February 2020.

Employers that have already elected to use the general approach or alternative approach for prior periods would be required to continue using the approach that they have chosen if they claim the CEWS and/or CERS for qualifying periods 14 to 16.

Flexible Baseline Remuneration Periods

Finally, the government has proposed allowing eligible employers to elect to use an additional alternative time period for determining the baseline remuneration of furloughed employees and/or active non-arm’s length employees for qualifying periods 14 to 16. Notably, the baseline remuneration of such employees is used to determine the amount of CEWS funding that eligible employers can claim in respect of these employees.

This proposed change would allow eligible employers to elect to use the period of March 1, 2019 to June 30, 2019, or July 1, 2019 to December 31, 2019 (the current alternative period) to calculate baseline remuneration during periods 14 to 16. Where an employer does not elect to use one of these alternative periods for determining the baseline remuneration of furloughed or active non-arm’s length employees, the default baseline remuneration period is January 1, 2020 to March 15, 2020.


The extension of the subsidy rates for the CEWS, CERS and Lockdown Support is great news for employers, as it means that employers can continue to be eligible for the same levels of support that are currently available until at least June 5, 2021.

Similarly, the government’s proposed changes to the reference periods for the CEWS and CERS will also help to ensure that employers that continue to experience declines in revenue relative to 2019 will continue to be eligible for the CEWS.

Finally, the new alternative time period for determining the baseline remuneration of furloughed employees and active non-arm’s length employees will provide employers with greater flexibility to select a period that maximizes the amount of CEWS funding that they can receive in respect of such employees.

As always, we will continue tracking COVID-19 related developments affecting employers and will post further updates as they become available to keep you In the Know.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.