On March 18, 2020, the federal government announced $82 billion in new economic measures for businesses and individuals to help stabilize the economy during the COVID-19 pandemic. These measures were declared as phase one of the government’s plan and some require legislation to pass before they come into effect.
Following the March 13th announcement of $10 billion allocated to the Business Development Bank of Canada and Export Development Bank of Canada to support small and medium-sized businesses (which can be applied for here), the federal government announced additional measures.
- The Canada Revenue Agency (CRA) will allow all businesses to defer the payment of any income tax amounts that become owing on or after March 18, until after August 31, 2020. This income tax deferral includes tax balances and installments. There will be no interest or penalties accrued on these amounts during this period.
- Businesses eligible for the small business deduction, non-profit organizations and charities are eligible for a temporary wage subsidy equal to 10% of total remuneration paid to employees for three months, up to a maximum of $1,375 per employee and $25,000 per employer. This program will be administered through reduced payroll remittances.
- On March 27th, this wage subsidy was increased from 10% to 75% retroactive to March 15, 2020. Any details concerning limits, eligibility criteria and other specifics are forthcoming prior to end of March.
- A range of credit and liquidity supports through financial Crown corporations and commercial lenders to provide long-term stable funding to banks and other mortgage lenders.
- The personal income tax filing deadline is deferred until June 1, 2020, and the payment of any income tax (on amounts owing on or after March 18, 2020 and before September 2020), will be deferred until after August 31, 2020, without interest or penalties.
- At Bateman Mackay, we are still aiming to complete all of our clients’ personal income tax returns by April 30th to give clients a better understanding of their tax refund or obligation.
- Individuals expecting to receive benefits under the Canada Child Benefit or GST credit should not delay in filing to ensure their entitlements are properly determined.
- For trusts with a December 31, 2019, taxation year end, the income tax filing deadline is deferred until May 1, 2020. The payment of any income tax (on amounts owing on or after March 18, 2020 and before September 2020), will be deferred until after August 31, 2020, without interest or penalties.
- The Emergency Care Benefit and Emergency Support Benefit have been replaced with the Canada Emergency Response Benefit (CERB). More information can be found here.
- The Emergency Care Benefit will be created to provide up to $900 bi-weekly for up to 15 weeks for those who are:
- Workers (including self-employed) who are not eligible for Employment Insurance (EI) sickness benefits and are quarantined or sick with COVID-19 or who are taking care of a family member who is sick with COVID-19.
- Parents who require care or supervision for their children due to school closures and are unable to earn employment income, regardless of whether they qualify for EI or not.
- The Emergency Support Benefit will provide EI benefits to workers who are not eligible for EI and who are facing unemployment.
- The EI Work Sharing Program provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers.
- For low and modest-income families, the GST credit payment amounts will be doubled.
- The 2019-2020 annual Canada Child Benefit payment amounts will increase by $300 per child.
- A six month interest-free moratorium on the repayment of Canada Student Loans.
- Reducing the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.
- The Canada Mortgage and Housing Corporation (CMHC) is providing increased flexibility for homeowners facing financial difficulties, including deferred payments on homeowner CMHC-insured mortgage loans.
- Additional supports for Indigenous communities, people experiencing homelessness, and women and children fleeing violence.
Changes to Tax Filing and Payment Deadlines
|Individuals||The deadline to file your income tax and benefit return will be deferred until June 1, 2020.The deadline to pay any balance due for your individual income tax and benefit return for 2019 has been extended from April 30, 2020, to September 1, 2020. This means you will not be assessed any penalties or interest if your balance due is paid by September 1, 2020.|
|Self-employed and their spouse or common law partner||For self-employed individuals or those who have spouses or common-law partners that are self-employed, the deadline to pay any balance due for your individual income tax and benefit return has been extended from April 30, 2020, to September 1, 2020.|
|Businesses||The deadline for businesses to pay any income tax amounts that become owing or due after March 18, 2020 and before September 1, 2020 has been extended to September 1, 2020. This means you will not be assessed any penalties or interest if your balance due is paid by September 1, 2020.|
|Trusts||For trusts with a taxation year end of December 31, 2019, the filing due date of March 31, 2020, will be deferred to May 1, 2020.Furthermore, all trusts that have an upcoming income tax balance due date or an income tax instalment payment due date before September 1, 2020, will have their payment due date effectively extended to September 1, 2020.|
Penalty and interest implications for upcoming trust tax obligations not covered by the relief described above will be considered by the CRA on a case-by-case basis.
|Charities||The Charities Directorate is extending the filing deadline to December 31, 2020, for all charities with a Form T3010, Registered Charity Information Return due between March 18, 2020 and December 31, 2020.|
More information about all of the above programs and measures can be found on the Department of Finance website.