On March 18, 2020, the Government of Canada announced measures in response to the COVID-19 outbreak. These measures are to help stabilize the economy during this challenging period.
Tax Filing and Payment Flexibility
- For individuals (other than trusts), the tax return filing due date will be deferred until June 1, 2020. However as many programs are based on filing, filing sooner is encouraged.
- For trusts having a taxation year ending on December 31, 2019, the tax return filing due date will be deferred until May 1, 2020.
- There was no announcement regarding a change to corporate or partnership filing deadlines.
- The CRA will allow all taxpayers, including corporations, to defer until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act, which in general includes most federal taxes on income. No interest or penalties will accumulate on these amounts during this period.
- Alberta Tax and Revenue Administration has announced similar measures to defer the payment of corporate tax until after August 31, 2020.
- The 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.
- 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.
Support to Individuals
Temporary Income Support
- Effective March 15, 2020, the one-week waiting period is temporarily waived for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits.
- The requirement to provide a medical certificate to access EI sickness benefits is waived.
- Emergency Care Benefit will provide up to $900 bi-weekly for up to 15 weeks to provide income support to:
- Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI 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 quality for EI sickness benefits.
- Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.
Application for the Benefit will be available in April 2020, and require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility. Canadians will select one of three channels to apply for the Benefit:
- by accessing it on their CRA MyAccount secure portal;
- by accessing it from their secure My Service Canada Account; or
- by calling a toll free number equipped with an automated application process.
Longer-Term Income Support for Workers
For Canadians who lose their jobs or face reduced hours as a result of COVID’s impact, the Government is:
- Introducing an Emergency Support Benefit delivered through the CRA to provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment.
- Amending the EI Work Sharing Program that 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.
Income Support for Individuals Who Need It Most
The following has been announced to provide support:
- Provide a one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC). This will double the maximum annual GSTC payment amounts for the 2019-20 benefit year. The average boost to income for those benefitting from this measure will be close to $400 for single individuals and close to $600 for couples.
- Increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child. The overall increase for families receiving CCB will be approximately $550 on average; these families will receive an extra $300 per child as part of their May payment.
- Providing $305 million for a new distinctions-based Indigenous Community Support Fund.
- Six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.
- Reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.
- Providing the Reaching Home initiative with $157.5 million to continue to support people experiencing homelessness during the COVID-19 outbreak.
- Supporting women and children fleeing violence, by providing up to $50 million to women’s shelters and sexual assault centres.
Support For Businesses
- Provide eligible small employers a temporary wage subsidy for a period of three months. 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. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.