Thanks, Kevin.
Let's look a little more closely at the issue. Currently, if the deadline is missed, the applicant loses 100% of the subsidy. There is no ability to amend the claim upward, so if the business finds they have made a mistake that would result in a larger claim, that opportunity is also gone once the deadline has passed. To underscore this point, we want to provide you with two examples of some of the likely unintended consequences of not allowing these claims to be filed late.
In Ontario, we have a client in the financial services industry who only realized at the last minute that they would qualify for CEWS. They reached out to us on very short notice to file their claim. Due to some recent turnover in their staff, they didn't realize they didn't have online access set up. Although we attempted to get it set up, it was too last-minute. We were unable to file the claim on time. As a result, this business lost out on the support for 129 employees.
Another business, in the software development industry in Quebec, prepared their own claim. The owner thought he had to deduct $25,000 from his CEWS claim for every period between March and June to which he also got the temporary wage subsidy, so he reduced his claim by a total of $75,000. However, the maximum temporary wage subsidy is only $25,000. He was actually entitled to an additional $50,000 of CEWS. He realized this mistake in late February, which was of course past the due date. Because the deadline had passed, it was too late to amend his claim. He lost out on that 50,000 dollars' worth of support.
The legislation and the accounting for CEWS is complex, and it's new. In the 12 months since the pandemic began, small and medium-sized enterprises across Canada have been focusing intently on keeping their businesses running and on keeping their employees employed, not on their accounting. We have provided examples only of missed CEWS filings at this point, because the first filing for CERS has not passed. However, it too has similar complex legislation and hard deadlines. Therefore, it's a given that there will be misses in this program as well.
We do recognize that given the rapidly changing nature of this legislation, the introduction of this deadline rigidity may have simply been an oversight. However, both existing legislation and jurisprudence support the ability to file tax returns, elections, forms, etc., past the applicable deadlines. We ask for the same treatment for CEWS and CERS. We all know that these programs are finite. They won't be around forever. Therefore, if we don't fix them now, many Canadian businesses may never recover.
In summary, we respectfully recommend that the CEWS and CERS legislation be amended to allow for some type of late filing. This will reflect the intent of the legislation and it will help more Canadian businesses keep their employees working.
Thank you.