CRA indicates that government assistance based partly on payroll levels would not be qualifying revenue if normal accounting practice would be to contra payroll expense

Eligible entities received annual governmental financial assistance based, in whole or in part, on their labour expenditures. Were these qualifying revenues for CEWS purposes?

After stating that this was a question of fact, CRA indicated (in light of the “normal accounting practices” rule in s. 125.7(4)) that if the normal accounting practice of the entities was to apply the amounts to reduce their payroll (or other) expenses, they would not be qualifying revenues.

Neal Armstrong. Summary of 7 January 2022 External T.I. 2020-0866751E5 F under s. 125.7(4).