Thursday, 26th March 2020 | Management
Canada’s COVID-19 Economic Response Plan – Key points for businesses & individuals
Since the beginning of March, restrictions and measures related to COVID-19 have rapidly escalated. While the first stages focused on public health and safety, in very short order, businesses and personal finances began to be affected. This is a cheatsheet of the measures that the Government of Canada have released as of April 2, 2020.
This information was originally shared by Green Leaves Bookkeeping and summarizes selected government comments up to April 2, 2020.
Businesses
- Corporate taxes return to be filed 6 months after year-end (unchanged)
- Corporate tax balances or installments due between Mar 18 – Sept 1 – not due until Sept 1/20
- HST/GST payments deferred until Jun 30/20 for the following: Feb/Mar/Apr monthly reporting periods, Jan – Mar quarterly reporting period. Annual filers whose return and/or installments are due in Mar/Apr/May for amounts owing in previous fiscal year or installments for current fiscal year
Workplace Safety Inspection Board Extension
WSIB will allow premium reporting payment deferral until Aug 31/20 for the following payments:
- Monthly: March 31, April 30, May 31, June 30, July 31, Aug 31
- Quarterly: April 30, July 31
- Annual: April 30
- https://www.wsib.ca/en/
financialrelief
CRA Audit Activity
CRA will not contact any small or medium businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the CRA will temporarily suspend audit interaction with taxpayers and representatives.
Liaison Officer Service
The Liaison Officer service is now available over the phone and will be customizing information by ensuring small businesses are aware of any changes such as filing and payment deadlines, proactive relief measures, etc.
Wage Subsidies
Prime Minister Justin Trudeau announced on April 1, 2020 that the Government is proposing to introduce a wage subsidy for qualifying businesses for up to three months, and retroactive to March 15, 2020.
10% wage subsidy
For employers with no sales reduction & may not qualify for 75% subsidy, employers not required to keep employees on payroll. This reduction is directly on your source deductions. If you have already taken this but qualify for the subsidy below it will be reduced by the 10% you have already taken off. Basically, you can apply for one or the other–not both.
75% wage subsidy
For employers that have suffered at least a 30% drop in revenues in March, April, May as compared to last year. This wage subsidy has a limit of $847 per week. This subsidy will be applied for online (once open) and funds would be returned to the business (there are no details on how or when yet.)
Individuals
Tax Payment Deferrals
- Personal tax filing extension: June 1, 2020
- Payment of personal taxes September 1, 2020
Individuals Without Paid Sick Leave
For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the government is:
- Waiving the one-week waiting period for those in imposed quarantine that claim Employment Insurance (EI) sickness benefits, effective March 15, 2020.
- Waiving the requirement to provide a medical certificate to access EI sickness benefits.
Canada Emergency Response Benefit (CERB)
This benefit provides a payment of $2,000 for a 4-week period (the same as $500 a week) for up to 16 weeks. After you apply, you should receive your payment in 3 business days if you signed up for direct deposit, and in about 10 business days if you apply for payment by mail. Read our blog post on CERB
Longer-term Income Support
- An Emergency Support Benefit will provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment. The individual amounts and process will be disclosed shortly.
- Implementing changes to the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process.
Low/Modest Income Individuals
- A one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC) will be made. This will double the maximum annual GSTC payment amounts and result in an average boost to income for those benefiting by close to $400 for single individuals and close to $600 for couples.
- The maximum annual Canada Child Benefit payment amounts would be increased by $300 per child for the 2019-20 benefit year. This will be added to the May, 2020 benefit cheque.
Canadians Abroad
The Emergency Loan Program for Canadians Abroad will provide the option of an emergency loan to Canadians in need of immediate financial assistance to return home or to temporarily cover their life-sustaining needs while they work toward their return. Each application will be assessed according to their specific situation and needs. This emergency assistance is a repayable loan. Eligible Canadians currently outside Canada and needing help to return home can contact the nearest Government of Canada office or Global Affairs Canada’s 24/7 Emergency Watch and Response Centre in Ottawa at +1 613-996-8885 (collect calls are accepted where available) or email sos@international.gc.ca.
- Students: A six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans will be provided.
Minimum RRIF Withdrawals: The required minimum withdrawals from Registered Retirement Income Funds (RRIFs) will be reduced by 25% for 2020. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.
Other Filings & Administration
Trust Filing Due Date Deferral
For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.
T3 Slips Submission Date
No specific statement was made regarding the deadline for filing T3 slips reporting income taxable to the trust beneficiaries.
Other Returns
Many taxpayers are required to file other tax and information returns. No mention was made of these, including partnership returns and NR4 reporting slips.
EFILE Signatures
In order to reduce the necessity for taxpayers and tax preparers to meet in person, effective immediately the CRA will recognize electronic signatures as having met the signature requirements of the Income Tax Act, as a temporary administrative measure. This provision applies to authorization forms T183 or T183CORP.
Financial Assistance
Individuals
Canada’s large banks have confirmed that this support will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products. Banks have affirmed their commitment to working with customers to provide flexible solutions, on a case-by-case basis, for managing through hardships caused by recent developments. This may include situations such as pay disruption, childcare disruption, or illness.
For Businesses
The Business Credit Availability Program will allow the Business Development Bank of Canada and Export Development Canada to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses. The near-term credit available to farmers and the agri-food sector will also be increased through Farm Credit Canada.
The Office of the Superintendent of Financial Institutions (OSFI) announced it is lowering the Domestic Stability Buffer by 1.25% of risk-weighted assets, effective immediately. This action will allow Canada’s large banks to inject $300 billion of additional lending in to the economy.
For Exporters
The Minister of Finance would now be able to determine the limit of the Canada Account in order to deal with exceptional circumstances. The Canada Account is administered by Export Development Canada (EDC) and is used by the government to support exporters when deemed to be in the national interest.
Interest Rates
The Bank of Canada cut the prime interest rate to 0.75%. Other banks have also reduced rates.
Closing
Many of the measures listed above have only been announced recently (March 18, 2020) and are noted as requiring Royal Assent. In recent public comments, it was indicated that the opposition parties have promised their support to move these measures quickly, therefore, we can presumably expect draft legislation in the short term.
Over the next days and weeks, the specifics on these programs will be released. Most of the details for these initiatives will be released on one of these web pages:
General federal info
CRA
Travel
Employment & Social Development Canada
As the situation develops further, there may be additional government measures, or modifications to those already announced.
The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional. No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
Green Leaves Bookkeeping offers full service bookkeeping, payroll, personal tax preparation in Acton, personal tax preparation in Milton, and consulting services in Acton, Ontario and surrounding areas. Have a bookkeeping mess? We can help! Whether you need a full time bookkeeping service, a once a month tune up, a software consultation, or someone to prepare your taxes we are available to assist you.
Written By: Lisa Trencs CB, CPB | Certified Bookkeeper, Certified Professional Bookkeeper Website
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