On March 27, 2020 there was an important announcement from the Federal government that they will be providing to small businesses a wage subsidy that could be as high as 75 percent.  This is huge.  It is a lot higher than the original 10% wage subsidy they had promised on March 18, 2020.   What is not clear is whether it will also be provided to non-profits and charities?

A little bit of background.

 

The first announcement of a 10% wage subsidy on March 18, 2020, up to $1375 per employee with a total maximum of up to $25,000 per employer.  It adds up but it is only a small help to organizations and probably will not give them much greater flexibility to retain staff.  When it was originally announced it was announced as being for small business and then later it was announced as small business plus non-profits and charities.

It said originally:

web archive

Providing small business with wage subsidies

We are providing eligible small employers a temporary wage subsidy for a period of three months.

The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.

Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration.

Then it was subsequently expanded to say:

www.canada.ca

You are an eligible employer if you:

  • are a non-profit organization, registered charity, or a Canadian-controlled private corporation (CCPC);
  • have an existing business number and payroll program account with the CRA on March 18, 2020; and
  • pay salary, wages, bonuses, or other remuneration to an employee.

Note: CCPCs are only eligible for the subsidy if their taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, is less than $15 million.

The Temporary Wage Subsidy for Employers is limited to the eligible employers listed above.

 

Then the Federal government on March 27, 2020 announced:

www.canada.ca

Providing small business with wage subsidies

We announced an up to 75 per cent wage subsidy for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. This will help businesses to keep and return workers to the payroll.

More details on eligibility criteria will start with the impact of COVID-19 on sales, and will be shared before the end of the month.

 

What is clear is that there is no reference to non-profits and charities in the March 27 announcement. I have spoken to a number of people, elected representatives and at the Department of Finance and I asked does the 75% apply to charities.  The short answer is we will know soon and probably on Monday. The long answer is that an elected representative who is close to someone who is close to someone else who makes the decision said that he/she thinks it will apply to non-profits and charities in the same way that the 10% wage subsidy did – but they said that was what they think – it has not been confirmed to them so they are just guessing/extrapolating.

Even the well connected CFIB has on their website relating to the 75% wage subsidy “The following information was about the former 10% wage subsidy and might therefore change in the upcoming days:” [my emphasis]

I sent a note to one elected representative who thinks it might apply to non-profits and charities noting that “there are a lot of charities and non-profits who are scratching their heads right now because of the wording on the Finance document – I see your logic, it makes sense to me and I sure hope you are correct – but a written clarification would be really helpful for the 2m employees, 15m volunteers that are part of this important $260 billion sector.”  The charity sector alone, excluding the non-profit sector, is larger than any single business sector in this country.

If this wage subsidy in its enhanced form applies to non-profits and registered charities that will be very important.    Now might be a good time to contact your elected representatives and encourage them to ensure that the charity and non-profit sectors are included in the enhanced wage subsidy. Even better if the Federal government provided a clarification that would be great and save a lot of head-scratching, anxiety and distraction for those leading charities and non-profits.  Charities and non-profits are dealing with huge uncertainty.  They don’t want unnecessary uncertainty – the situation is difficult enough and many of them are on the frontlines of dealing with this crisis.   Give em a break.