Abstract
Introducing a wage subsidy for employers with reduced revenues. The subsidy is available for wages paid in ten 4-week periods from 15 March 2020 to 19 December 2020. The parameters for the tenth period have not yet been announced but were assumed to be the same as the parameters for the ninth period for the purposes of this analysis.
For Periods 1 to 4, employers are eligible for the subsidy if they have a qualifying revenue decline. Revenue declines are calculated based on calendar months, rather than the 4-week periods, with the first period corresponding to March 2020. Revenues in the corresponding calendar month are usually compared to revenues in the same calendar month in the prior year. The revenue decline required for eligibility is 15% for March, and 30% for April, May and June. For July onwards, employers are eligible for the subsidy if in a period they have any revenue decline.
For Periods 1 to 4, the subsidy is 75% of wages up to the lesser of the weekly cap and wages actually paid. For new employees, the subsidy is 75% of wages paid up to the cap. For Periods 5 to 10, the subsidy rate that an employer will receive depends on the extent of the employer’s revenue losses in the corresponding calendar month (for the base subsidy) and the preceding three calendar months (for the top-up). The level of subsidy declines over periods 7 to 9 as shown in the annexed tables. The employee remuneration eligible for subsides is capped at $1,129 per week. For employees on leave with pay, employers can also recover 100% of employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. Eligible employers include individuals, taxable corporations, and partnerships as well as non-profit institutions and registered charities. Public bodies are not eligible.
The PBO estimates the total net cost of this measure to be $59.2 billion - $67.9 billion in wage subsidies and $0.5 billion in forgone employer payroll contributions, offset by $9.1 billion in corporate income tax revenues from wage subsidies.
Additional Details on the Cost Estimate Update
The PBO updated the cost estimate of the Canada Emergency Wage Subsidy (CEWS) because:
- The CEWS was extended from six 4-week periods to ten 4-week periods;
- New program parameters were announced for periods 5 to 9; and
- Additional economic and operational data permit a more accurate estimation.
- $67.9 billion in gross wage subsidies;
- $0.5 billion in forgone employer payroll contributions;
- $9.1 billion in corporate income tax revenues.
Description of the CEWS
The subsidy is available for wages paid in ten 4-week periods from 15 March 2020 to 19 December 2020. The parameters for the tenth period have not yet been announced but were assumed to be the same as the parameters for the ninth period for the purposes of this analysis.
For Periods 1 to 4, employers are eligible for the subsidy if they have a qualifying revenue decline. Revenue declines are calculated based on calendar months, rather than the 4-week periods, with the first period corresponding to March 2020. Revenues in the corresponding calendar month are usually compared to revenues in the same calendar month in the prior year. The revenue decline required for eligibility is 15% for March, and 30% for April, May and June. For July onwards, employers are eligible for the subsidy if in a period they have any revenue decline.
For Periods 1 to 4, the subsidy is 75% of wages up to the lesser of the weekly cap or wages actually paid). For new employees, the subsidy is 75% of wages paid up to the cap. For Periods 5 to 10, the subsidy rate that an employer will receive depends on the extent of the employer’s revenue losses in the corresponding calendar month (for the base subsidy) and the preceding three calendar months (for the top-up). The level of subsidy declines over periods 7 to 9 as shown in the tables below. The employee remuneration eligible for subsides is capped at $1,129 per week.
For employees on leave with pay, employers can also recover 100% of employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan.
Eligible employers include individuals, taxable corporations, and partnerships as well as non-profit institutions and registered charities. Public bodies are not eligible.
Base Subsidy Rates
* In Periods 5 and 6, employers who would have been better off in the CEWS design in Periods 1 to 4 would be eligible for a 75% wage subsidy if they have a revenue decline of 30% or more.
Top-up Subsidy Rates
Timing |
||||||
Period 5*: |
Period 6*: August 2 – August 29 |
Period 7: |
Period 8: September 27 – October 24 |
Period 9: |
||
Revenue drop in prior 3 calendar months |
70% to 100% |
25% |
||||
50% to 70% |
1.25 x (revenue decline-50%) |
|||||
0% to 49% |
0 |
Monthly profile of CEWS
Month-by-month, the cost of the CEWS is expected to be the highest in Periods 5 and 6 (5 July to 29 August).
Figure 1-1 CEWS Payments by Qualifying Period

This is largely because subsidies will become available to firms with revenue losses of less than 30% from 5 July onwards. While these firms receive lower subsidy rates, they account for a larger share of employment. The top-up also increases the subsidies for companies with large revenue losses.
Figure 1-2 CEWS Payments by Revenue Loss Range

After Period 6 (ending 29 August), the cost of subsidies gradually declines as the subsidy rates decrease and projected economic conditions continue to improve.
For Periods 1-4 (15 March to 4 July) the PBO’s estimates reflects subsidies being paid in relation to the wages of approximately 3 million employees. The extension of the CEWS to employers with revenue declines of less than 30% dramatically expands the scope of employees whose wages are being subsidized to approximately 10 million. However, the lower level of support for these employers with lower revenue losses means there is not a proportionate increase in cost.
Figure 1-3 Employees supported by period

Sector profile of CEWS
By sector, the largest share of subsides have gone to employers in manufacturing, who received 20% of all subsidies. Subsidies per person vary depending on the salaries of employees in each industry (up to the maximum under the program). For example, average subsidies for mining, oil and gas extraction are more than double those for accommodation and food services.
Figure 2-1 Total CEWS payments and average CEWS payments per employee per period by industrial sector
Industrial Sector |
Total amount of CEWS payments since launch |
Average amount of CEWS per |
Manufacturing |
$ 4,738,004,000 |
$ 2,565 |
Accommodation & Food Services |
$ 1,656,290,000 |
$ 1,264 |
Retail Trade |
$ 2,179,952,000 |
$ 1,946 |
Construction |
$ 2,523,418,000 |
$ 2,542 |
Professional Scientific & Technical Services |
$ 2,205,369,000 |
$ 2,599 |
Wholesale Trade |
$ 2,187,483,000 |
$ 2,602 |
Administrative Support Waste Management & Remediation Services |
$ 1,162,406,000 |
$ 2,028 |
Health Care & Social Assistance |
$ 1,164,065,000 |
$ 2,044 |
Transportation & Warehousing |
$ 1,362,175,000 |
$ 2,608 |
Other Services except Public Administration |
$ 1,039,936,000 |
$ 2,140 |
Arts Entertainment & Recreation |
$ 464,031,000 |
$ 1,877 |
Information & Cultural Industries |
$ 643,826,000 |
$ 2,650 |
Mining Quarrying & Oil & Gas Extractions |
$ 746,973,000 |
$ 3,095 |
Not Assigned |
$ 382,482,000 |
$ 2,012 |
Real Estate & Rental & Leasing |
$ 379,583,000 |
$ 2,419 |
Education Services |
$ 301,108,000 |
$ 1,992 |
Agriculture Forestry Fishing & Hunting |
$ 224,548,000 |
$ 2,210 |
Finance & Insurance |
$ 259,990,000 |
$ 2,634 |
Management of Companies & Enterprises |
$ 269,600,000 |
$ 2,818 |
Public Administration |
$ 11,864,000 |
$ 2,345 |
Utilities |
$ 9,714,000 |
$ 2,874 |
Geographical profile of CEWS
Most CEWS payments have been paid to businesses in Ontario, followed by Quebec, Alberta and British Columbia.
Figure 3-1 Total CEWS payments and average CEWS payments per employee per period by province or territory
Province/Territory |
CEWS Amount Approved Since Launch |
Average amount of CEWS per employee per period |
Ontario |
$9,711,885,000 |
$2,246 |
Quebec |
$5,237,142,000 |
$2,260 |
Alberta |
$3,649,975,000 |
$2,411 |
British Columbia |
$2,897,948,000 |
$2,159 |
Manitoba |
$708,757,000 |
$2,172 |
Nova Scotia |
$447,141,000 |
$2,087 |
Saskatchewan |
$403,058,000 |
$2,169 |
New Brunswick |
$332,092,000 |
$2,039 |
Newfoundland and Labrador |
$219,116,000 |
$2,144 |
Missing |
$182,795,000 |
$1,939 |
Prince Edward Island |
$69,055,000 |
$1,802 |
Yukon |
$32,173,000 |
$2,311 |
Northwest Territories |
$16,895,000 |
$2,400 |
Nunavut |
$4,788,000 |
$2,206 |
Relative to size of their labor force, Yukon, Alberta, Ontario and Manitoba have the most CEWS claims. This likely reflects the different impact of COVID-19, public health measures, and oil price shocks in different regions.
Figure 3-2 Employees in relation to whom wage subsidies have been paid as a share of total 2019 employment by province or territory
Province/Territory |
Period 1: March 15 to April 11 |
Period 2: April 12 to May 9 |
Yukon |
19% |
19% |
Alberta |
19% |
19% |
Ontario |
17% |
16% |
Manitoba |
16% |
16% |
British Columbia |
15% |
15% |
Prince Edward Island |
14% |
12% |
Nova Scotia |
13% |
12% |
Quebec |
12% |
15% |
New Brunswick |
12% |
13% |
Newfoundland and Labrador |
12% |
12% |
Northwest Territories |
12% |
10% |
Saskatchewan |
10% |
10% |
Nunavut |
6% |
5% |