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Canada Announces COVID-19 Economic Response Plan

tax
Posted by Ryan Rawluk Posted on 18 Mar 2020

On March 18, 2020, the Government of Canada announced a set of economic measures to help stabilize the economy during this challenging period.  The government's announcement can be found here:

https://www.canada.ca/en/department-finance/economic-response-plan.html

The measures include the following:

Support for Canadians

- Waiving the one week waiting period for sick leave benefits for EI, for people in imposed quarantine, effective March 15, 2020.

- Waiving the requirement for medical certificate for EI sick benefits.

- Introducing Emergency Care Benefit, $900 bi-weekly, up to 15 weeks, for workers, including self employed, who do not qualify for EI, who are quarantined or sick with COVID-19, or taking care of a family member who is sick with COVID-19 and parents with childing who require care or supervision due to school closures.

- Longer Term Income Support for workers, including Emergency Support Benefits for people not eligible for EI and who are facing unemployment and an EI Work Sharing Program for workers who agree to reduce their normal working hours.

- One-time special payment by early May 2020 through the GST Credit which will double the annual entitlement.

- Increasing the Canada Child Benefit for the 19/20 year by $300 per child, to be paid out with the May payment.

- Six month interest-free moratorium on repayment of Canada Student Loans.

- Reducing minimum withdrawals from RRIFs by 25% for 2020 to help with volatile market conditions

Support for Taxpayers

- Tax filing deadline for individuals for 2019 tax returns is deferred to June 1, 2020.  We encourage people to file as soon as they can to get their tax refunds and to ensure their entitlement to Canada Child Benefits is not interrupted.

- Trusts filing deadline is deferred to May 1, 2020 (previously March 30, 2020).

- Taxpayers are allowed to defer payment of any income tax amounts that become owing on or after today until after August 31, 2020.  No interest or penalties will accumulate on these amounts during this period.

- CRA will allow tax preparers to get electronic signatures on forms T183 and T183Corp as a temporary measure.

Support for Businesses

- Small businesses may be eligible for a temporary wage subsidy for three months equal to 10% of remuneration paid during that period, up to a maximum of $1,375 per employee and $25,000 per employer.  Businesses will be able to benefit immediately from this support measure by reducing their remittances of income tax withheld.  Employers benefiting include corporations eligible for the small business deduction, as well as non-profit organizations and charities.

- Businesses can defer until after August 31, 2020 the payment of any income tax amount that becomes owing on or after today and before September 2020.  The relief would apply to tax balances due, as well as instalments.  No interest or penalties will accumulate on these amounts.

- 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 majroity of businesses, CRA will temporarily suspend audit interaction with taxpayers and their representatives.

At Rawluk & Robert Chartered Professional Accountants Inc., we are here to help steer you through this extremely difficult time.  If you have any questions or concerns about the above or other tax matters, do not hesitate to contact our office by telephone - 204-237-6053 - or by email.

Stay Safe!