CRA applies the CEWS dividend-payment rule on an unconsolidated basis

S. 125.7(2.01) of the CEWS (wage subsidy) rules provides that no CEWS amount arises in the qualifying period respecting “a qualifying entity that is a publicly traded company or a subsidiary of such a company if, in the qualifying period, it paid taxable dividends to an individual who is a holder of common shares of the company or of the subsidiary of the company.”

CRA confirmed that this denial applies only to the dividend payer, so that, for example, the payment of dividends by a public company would not affect any of its subsidiaries’ CEWS entitlements.

Neal Armstrong. Summary of 3 August 2022 External T.I. 2021-0922231E5 under s. 125.7(2.01).