Bill amendment paves way for large number of prodcos to claim CEWS

The amendment to Bill C-20, which rectifies a minor administrative issue that caused major problems, comes after months of behind-the-scenes advocacy work from the CMPA.
Photo by rawpixel on Unsplash

The House of Commons has passed new legislation that will allow a large number of Canadian production companies to finally begin claiming the Canada Emergency Wage Subsidy (CEWS), following months of behind-the-scenes advocacy work from the CMPA and other industry organizations.

Previously, due a technicality that has persisted since March, certain companies were unable to apply for CEWS because they had previously partnered with an industry payroll service provider (such as EP or Cast & Crew). As a result, the production company used the payroll service provider’s CRA payroll business number rather than being given a number of their own.

What seemed like a minor administrative issue caused significant problems, with many prodcos finding themselves disqualified from claiming the wage subsidy, which has been a lifeline for many. The CMPA told Playback Daily it estimates the issue affected hundreds of production company employees across the country, as using payroll service providers is an industry norm.

The legislative change to Bill C-20 was passed by the House of Commons on July 21 and approved by the Senate and given Royal Assent on July 27. The modification of the CEWS eligibility requirements means employers using the CRA business payroll number of a payroll service provider are able to access the program.

With the issue now rectified, eligible production companies can begin collecting the subsidy retroactively to March 15. In order to be eligible, an employer must be able to demonstrate that they experienced a 30% revenue decline in the months of March, April, May, June and July, when compared to the same month the prior year.

Under CEWS regulations prior to July 5, companies were able to claim up to $847 per employee. After July 5, companies are able to claim up to $1,129 per employee. The maximum rate that can be claimed will decline as companies recover and the program is phased out. In addition, there is a top-up subsidy of up to an additional 25% for companies that have experienced a decline of 50% or more. The additional 25% is incremental and maxes out at a 70% revenue decline.

As well, the new legislation will also see CEWS extended until Nov. 21, 2020.

The modification of the CEWS access process is welcome news for a domestic production sector that has been bruised by the impact of the COVID-19 pandemic. Earlier in July, the Department of Canadian Heritage unveiled $27 million in financial aid to the audiovisual and digital media sectors as part of the second phase of the COVID-19 Emergency Support Fund. The phase two funds were allocated specifically to companies that had been missed during phase one of the support fund, which saw the CMF administer $88.8 million and Telefilm administer $27 million.

Updated: an earlier version of this story stated that the CEWS issue had affected hundreds of Canadian production companies, when in fact it is more accurate to say the issue affected hundreds of employees at Canadian production companies.