Canada Emergency Wage Subsidy (CEWS) 2.0

CEWS 2.0: A resourceLast updated: October 14, 2020

On July 20, the federal government introduced legislation  that will substantially change the CEWS program starting July 5, 2020.  Since the program has changed so significantly many are calling it CEWS 2.0 (and we are choosing to do the same). CEWS 2.0 is far more complex than its previous version. The government extended CEWS until June 2021 on October 9, 2021.

The intent of this article is to provide a simplified high-level discussion of the changes rather than to provide a complete guide to CEWS 2.0. Our article on CEWS 1.0 is available here.

High-level Summary of Changes

  1. CEWS 2.0 will be available until June 2021 but the exact details on the program are currently only available until December 19, 2020.
  2. The level of support received from CEWS 2.0 will fluctuate based on the percentage decrease in revenue, with those experiencing the greatest decrease in revenue being entitled to the greatest subsidy.
  3. There is no longer a minimum revenue decrease (e.g. 30%) required to qualify for CEWS 2.0.
  4. The maximum support available under CEWS 2.0 will be gradually reduced between July and October 2020.
  5. CEWS 2.0 includes a base subsidy and a top-up subsidy.
  6. Safe Harbour rule:  There are rules for Periods 5 and 6 (July 5 – August 29, 2020) such that a company with a decrease in revenue of at least 30% will not receive less than what they were entitled to receive under the original CEWS rules.
  7. Furloughed employees (i.e. those not working but being paid) – CEWS 2.0 can only be claimed in relation to furloughed employees until October 24, 2020. It is the government’s intention that furloughed employees after this date transition to other COVID relief programs.

Two Parts to CEWS 2.0

  1. Base subsidy: available to all eligible employers who are experiencing a decline in revenue, with the subsidy amount varying depending on the scale of revenue decline.
  2. Top-up subsidy: an additional subsidy for employers who have experienced a 50% or greater decrease in their 3-month average revenue.

Both subsidies are based around a maximum remuneration per employee of up to $1,129 per week. This is similar to the original CEWS formula where the maximum subsidy was $847 (75% of $1,129) per week per employee.


As many of the changes are referenced to claim periods, we have outlined the upcoming periods below:

  • Period 5 – July 5 – August 1, 2020
  • Period 6 – August 2 – August 29, 2020
  • Period 7 – August 30 – September 26, 2020
  • Period 8 – September 27 – October 24, 2020
  • Period 9 – October 25 – November 21, 2020

Base Subsidy

The maximum base subsidy is a flat percentage for employers experiencing a revenue drop of 50% or more. Employers with a revenue drop of less than 50% will be eligible for a lower base subsidy based on a formula. Rather than describing the formula for each period in detail, we have included a chart below, provided by the Government of Canada, that illustrates the subsidy rate based on the decrease in revenue for each period.

For Period 5 and all subsequent periods, an employer can use the greater of its percentage revenue decline in the current period and that in the previous period for the purpose of determining its qualification for the base CEWS and its base CEWS rate in the current period. The intention of this rule is to mimic the original CEWS rules that stated once you qualify for one period you automatically qualify for the next period.

Chart #1

Top-up Subsidy

The top-up subsidy is available to employers who have experienced a 3-month average revenue drop of more than 50%. The 3-month average revenue drop will be determined by comparing the average revenue of the preceding 3 months to the same months in the prior year. An alternative approach considers the average revenue of the preceding 3 months to the average monthly revenue in January and February 2020.

Employers who have experienced a 3-month average revenue drop of more than 50% would receive a top-up subsidy equal to 1.25 times the average revenue drop that exceeds 50%, up to a maximum top-up of 25%, which is attained at a 70% revenue decline.

We have included a chart below, also provided by the Government of Canada, that illustrates the combined impact of the base + top-up subsidy.

October 9 Update – The government announced the maximum subsidy will remain at 65% until December 19, 2020. The chart provided by the government (below) previously reflected that the maximum subsidy would decrease to 45% starting in Period 9.

Chart #2


Please contact your Stern Cohen advisor to learn more about how CEWS 2.0 will apply to you.


Department of Finance’s Backgrounder on CEWS 2.0 –

Tax Legislation governing CEWS 2.0 and related changes –

October 9 Update –

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