CRA indicates that business interruption insurance proceeds generally are not excluded as extraordinary revenue for CEWS purposes
Regarding the treatment of business interruption insurance proceeds for Canada emergency wage subsidy (“CEWS”) purposes, CRA stated:
[A]n entity would typically acquire business interruption insurance to replace lost revenue when the entity is unable to carry on its ordinary activities. Accordingly … business interruption insurance proceeds would generally be included in qualifying revenue and would generally not be considered an extraordinary item.
This sounds rather like an application of the surrogatum principle: the business interruption itself is extraordinary, but the revenues for which the insurance proceeds are a substitute are ordinary.
Neal Armstrong. Summary of 3 May 2021 Internal T.I. 2020-0852571I7 under s. 125.7(1) – qualifying revenue – (c).