Canada’s Economic Response Plan – March 18, 2020 and updates
The Government of Canada released a series of financial measures in mid-March.
We have summarized selected government comments up to March 18, 2020 and updated with March 25, 2020, March 27, 2020 and April 1, 2020 announcements.
Please note these measures are still at an initial stage. More specific information will follow over days and weeks.
INDIVIDUALS:
| Tax Return Due Date | Changed from April 30 to June 1, 2020; | Those expecting refunds or benefits (such as the GST/HST credit, Guaranteed Income Supplement and Canada Child Benefit) should file as early as possible. |
| Tax Payment Deferral | Payment of income tax amounts that become owing on or after March 18, 2020 (also including installments) and before September 2020. Payment will be deferred “until after August 31, 2020”, which seems to imply payment will be due on September 1, 2020; | No interest or penalties will accumulate on these amounts during this period. |
| Individuals Without Paid Sick Leave (Employment Insurance (EI) sickness benefits) | Who are sick, quarantined or forced to stay home to care for children; | Waiving: – one-week waiting period for those in imposed quarantine, effective March 15, 2020. – the requirement of a medical certificate. |
| Canada Emergency Response Benefit (new program) more details on the eligibility and how to apply. | – Providing up to $2,000 per month (previously $900 bi-weekly), for up to 16 weeks; – Application for the Benefit will be available in April 2020, and require Canadians to attest (and continue to attest every four weeks) that they meet the eligibility requirements; – Individuals can apply through a secured portal that will be available on April 6, 2020 (Monday) or by calling an automated toll-free number 1-800-959-2019. | Apply 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; and – Parents with children who require care or supervision due to school closures, and are unable to earn employment income, regardless of whether they qualify for EI or not. |
| Low/Modest Income Individuals (Income Support) | – A one-time special payment through the Goods and Services Tax credit (GSTC) will be made. (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. | By early May 2020 |
| Students | A six-month interest-free freeze on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans, will be provided. |
BUSINESSES:
| Tax Payment Extension | Payment of income tax amounts that become owing on or after March 18, 2020 (also including installments) and before September 2020. Payment will be deferred “until after August 31, 2020”. | No interest or penalties will accumulate on these amounts during this period. |
| Other Payment and Filing Extensions | No comment was made about changing the filing and payments dates for payroll, GST/HST, and other non-income tax items. | Still remain the same. |
| CRA Audit Activity | Any post assessment GST/HST or Income Tax audits suspended for the next four weeks. | |
| Payroll Subsidies (Introduced two programs) | CANADA EMERGENCY WAGE SUBSIDY – 75% | TEMPORARY WAGE SUBSIDY – 10% |
Please note that the announced economic plan still requires a 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 a draft legislation in the short term.
The information above 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.