CANADA'S COVID-19 EMERGENCY PLAN FOR INDIVIDUALS AND BUSINESSES
On March 18, 2020, the Government announced a new set of economic measures to help Canadians and businesses cope with the global COVID-19 pandemic.
The Government of Canada is taking immediate, significant and decisive action to support Canadians and businesses facing hardship as a result of the COVID-19 outbreak.
TAX FILING AND PAYMENT DEADLINES
The government announced the extension of tax filing and tax payment deadline as shown below:
|Tax Payer||Original Filing Deadline||New Filing Deadline||New Payment Date|
|Individuals||April 30, 2020||June 1, 2020||September 1, 2020|
|Trusts with a December year end||March 30, 2020||May 1, 2020||September 1, 2020|
|Corporations||Six months after year end||No changes||September 1, 2020|
The payment deadlines apply to all income tax payments due on or after March 18, 2020, and before September 1, including balances and installments due. No interest or penalties will apply up to this date.
Self-employed taxpayers and their spouse or partners still have until June 15, 2020 to file their income tax returns.
All other tax-filing deadlines remain the same.
For individuals expecting a refund, we recommend that your file your tax return sooner as the Canada Revenue Agency (CRA) will continue to process refunds throughout the tax season.
SMALL BUSINESS OWNERS
For corporations eligible for the small business deduction, as well as non-profit organizations and charities, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months to support businesses that are facing revenue losses and to help prevent lay-offs.
The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees' remuneration.
ACCESS TO CREDIT FOR SMALL AND MEDIUM SIZED BUSINESSES
A $10 billion credit facility will be established and the money will go to the Business Development Bank of Canada (BDC) and Development Canada (EDC). BDC and EDC will help businesses access this additional credit. BDC and EDC are also cooperating with private sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation and tourism.
The near term credit available to farmers and the agri-food sector will also be increased through Farm Credit Canada.
TEMPORARY INCOME SUPPORT FOR WORKERS AND PARENTS
New measures introduced for Canadians without paid sick leave (or similar workplace accommodation) who are sick with the COVID-19 virus, are in imposed quarantine as a result of the virus or forced to stay home to care for children due to school or daycare closures includes;
Access to Employment insurance (El) sickness benefits
- The one-week waiting period for individuals that claim Employment insurance (El) benefits has been waived
- The requirement to provide a medical certificate to access El sickness benefits has also been waived
Emergency Care Benefit
Introduction of an Emergency Care Benefit (ECB) providing up to $900 bi-weekly, for up to 15 weeks to be administered by Canada Revenue Agency (CRA) to provide income support to:
- Workers. including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for El sickness benefits,
- Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent. but do not qualify for El sickness benefits.
- Parents with children who require care due to school or daycare closures, and are unable to earn employment income, irrespective of whether they qualify for El or not
Even though the CERB has ended, the CRA is continuing to accept and process retroactive applications until December 2, 2020.
Applications to the Emergency Care Benefit will be available in April 2020 and require Canadians to attest that they meet the eligibility requirements and re-attest every two weeks to reconfirm their eligibility. This benefit will be accessible online using the CRA My Account secure portal, My Service Canada Accounts or by calling a toll-free number equipped with an automated application process
New Recovery Benefits
The new Recovery Benefits are available between September 27, 2020 and September 25, 2021.
The CRA will open applications for the Canada Recovery Sickness Benefit and the Canada Recovery Caregiving Benefit on October 5 and for the Canada Recovery Benefit on October 12.
LONGER-TERM INCOME SUPPORT FOR WORKERS
For Canadians who lose their jobs or face reduced hours as a result of COVID-19's impact, the Government is implementing the El Work Sharing Program, which provides El benefits to workers who agree to reduce their normal working hours 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.
ROLE OF FINANCIAL INSTITUTIONS
Banks in Canada 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. The support from Canada's large banks will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products.
INCOME SUPPORT FOR INDIVIDUALS WHO NEED IT MOST
One-time special payment through the Goods and Services Tax credit (GSTC)
A one-time special payment will be made to qualifying individuals by early May through the Goods and Services Tax Credit (GSTC). This will double the maximum annual GSTC payments for the 2019-2020 benefit year. This will boost income by approximately $400 for single individuals and $600 for couples.
Proposal to increase annual child Canada benefit
The Government is proposing to increase the maximum annual child Canada benefit payments amounts for 2019-2020 benefit by an extra $300 per child as part of their May payment.
SUPPORT TO OTHER GROUPS THAT MAY BE VULNERABLE
- A six-month, interest-free reprieve on student loan payments for all individuals currently in the process of repaying these loans.
- Providing $305 million for a new distinctions-based Indigenous Community Support Fund to address immediate needs in First Nations, Inuit, and Métis Nation communities.
Reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors' retirement savings. This will provide flexibility to seniors that are concerned that they may be required to liquidate their RRIF assets to meet minimum withdrawal requirements. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.
Providing the Reaching Home initiative with $157.5 million to support those experiencing homelessness.
Supporting women and children fleeing violence by providing up to $50 million to women's shelters and sexual assault centres, including facilities in Indigenous communities.