Compliance snapshot — Canada Emergency Wage Subsidy for businesses

The Canada Emergency Wage Subsidy (CEWS) was introduced at the onset of the COVID-19 pandemic to assist businesses with maintaining their workforce by partially offsetting their payroll-related costs.

At its height, the CEWS supported over 5 million employees across Canada:

• Over $100 billion in CEWS support was provided to 460,000 employers
• 100% of CEWS applications went through an automated pre-payment validation, where claims of concern were reviewed manually to ensure eligibility

The CEWS application periods are now closed.

Ensuring compliance with the CEWS – completed

To ensure the integrity of the COVID-19 support programs for businesses, the CRA developed a comprehensive compliance program which consisted of many activities, including automated validation criteria, manual pre-payment verification and post-payment verifications.

Two post-payment verification programs were developed to identify and address non-compliance with the CEWS program:

• Post-payment validations: Project-based reviews based on claims with specific risk indicators
• Post-payment audits: Comprehensive reviews based on claimants that demonstrated the highest-risk of non-compliance

These two compliance programs were undertaken using a risk-based approach that aligns with international best practices and existing compliance programs.

CEWS post-payment compliance work began in August 2020, and all cases were closed by December 31, 2025.

CEWS compliance results (as of December 31, 2025)^{Footnote 1}

Overall, the CEWS compliance programs found that the vast majority of claimants applied the program rules correctly and made reasonable efforts to comply. In many cases, adjustments resulted from honest mistakes rather than intentional non-compliance. Over 95% of the dollar value of claim amounts reviewed were approved, either as filed or with minor adjustments.

This table excludes aggressive non-compliance and preparer-linked claims (see section below). This table will no longer be updated, as all routine CEWS post-payment validation and audit work is complete.

Aggressive non-compliance and preparer-linked claims – targeted compliance activities

While the routine CEWS post-payment compliance programs are complete, the CRA continues to undertake targeted compliance activities focused on a subset of high-risk claimants suspected of willful and/or aggressive non-compliance for both the CEWS and the Canada Emergency Rent Subsidy (CERS).

These activities include cases involving claimants suspected of having used third-party subsidy preparers who may have promoted and assisted in breaking or bending the rules and knowingly facilitated the production of inaccurate or willfully non-compliant claims.

These activities are not part of the general CEWS compliance programs and represent focused efforts to address suspected aggressive and organized non-compliance.

These targeted compliance activities support the government’s priority to combat aggressive tax planning by tackling cases of willful non-compliance, including aggressive schemes designed to obtain unwarranted payments. This work is expected to be substantially completed by March 31, 2027.

Included in the numbers outlined above, the CRA completed third party penalty audits, which resulted in $10 million in third party penalties.^{Footnote 4}

Additional information

For more detailed information on CEWS post-payment audit program activities, including a comprehensive breakdown of results as of March 31, 2023, please read Canada Emergency Wage Subsidy – Post-payment audits. Note that the data presented in this report represents a specific point in time and is not updated regularly.