CEWS Extension for Furloughed Employees

Summary#

This final regulation, SOR/2020-227, amends the Income Tax Regulations to extend the COVID-19 wage subsidy rules for furloughed employees for the four-week period September 27 to October 24, 2020. It keeps the same maximum weekly subsidy of $847 per furloughed employee and is deemed to have come into force on September 27, 2020.

What it does#

• Extends the existing treatment of furloughed employees under the Canada Emergency Wage Subsidy (CEWS) to cover the period September 27 to October 24, 2020.
• Specifies that the amount used to calculate the subsidy for a furloughed employee in that period is the same as for the prior CEWS periods (periods five, six and seven).
• Keeps the maximum weekly subsidy at $847 per furloughed employee who was paid for the week.
• Makes the change effective retroactively as of September 27, 2020.
• The Canada Revenue Agency (CRA) will apply and administer these rules for eligible employers.

Who's affected#

• Employers who applied for or could apply for the Canada Emergency Wage Subsidy (CEWS) and who had employees temporarily on paid leave (furloughed) during September 27 to October 24, 2020.
• Employees who were furloughed and paid in that four‑week period—because their pay could be covered in part by the subsidy.
• Small businesses that used or considered using CEWS to maintain payroll; they may still face some administrative work to claim the subsidy.
• The federal government budget, since the extension increases program costs.

Why it matters#

• It gives employers the same financial support for furloughed staff for an extra month, helping them keep ties to employees and making rehiring easier as the economy recovers.
• It helps furloughed employees by maintaining a subsidy‑backed income stream when they were paid but not working.
• The extension adds about $260 million to the CEWS cost, bringing more spending on a program already estimated at around $83.6 billion before this change.
• Because the regulation is final and retroactive to September 27, 2020, eligible employers can count on the same subsidy rules for that month.