Moodys Tax Explains Canada Emergency Wage Subsidy (CEWS) V. 2.0

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The ongoing wage subsidy saga is a perfect case study of the dilemma faced by drafters of tax legislation: Should tax legislation be drafted broadly so as to impact everyone equally despite the fact that it may not be fair, or should tax legislation be drafted in a bespoke manner that is carefully targeted to achieve a perceived fair and progressive outcome but that inevitably comes with complexity? With the COVID-19 wage subsidy regime, we have witnessed the full spectrum.

The first wage subsidy introduced in response to Covid was the Temporary Wage Subsidy (TWS) announced on March 18, 2020 - see our blog on this. Although the subsidy was not substantial (10% of wages paid, up to $1,375 per employee to a maximum of $25,000 total per employer), it was spectacularly simple. Many employers in