Canada: Immediate and decisive measures to help taxpayers, businesses and the economy
FEDERAL GOVERNMENT ECONOMIC RESPONSE PLAN TO FACE THE COVID-19 PANDEMIC
Dear Madam,
Dear Sir
Today, the federal government tabled an economic intervention plan to take immediate and decisive action to help taxpayers, businesses and the Canadian economy facing difficulties caused by the outbreak of COVID-19.
For more information, please contact one of Mallette's tax specialists or partners in your area, one of our 30 offices: mallette.ca/contact-us
MEASURES AFFECTING COMPANIES HELPING COMPANIES TO KEEP EMPLOYEES EMPLOYED
A temporary three-month wage subsidy will be available to eligible small business employers. This assistance will be equal to 10% of salaries paid during the period in question, up to a maximum of $1,375 per employee and $25,000 per employer. To speed up the collection of this sum, the measure is available immediately by reducing deductions at source on employee remuneration (income tax). The notion of eligible small business has not yet been defined, but it has been specified that corporations eligible for the small business deduction, NPOs and charities will be covered by this measure.
TIMELY FILING OF INCOME TAX RETURNS AND PAYMENT OF TAX FOR COMPANIES
The filing date for 2019 income tax returns has not been postponed and will have to be filed six months after the corporation's fiscal year-end. However, the CRA will not be contacting any small or medium-sized businesses to initiate GST/QST or income tax post-assessment audits over the next four weeks.
The date of payment of income tax under Part I of the Income Tax Act, as well as instalments, that become due as of March 18, 2020 and before September 1, 2020 is postponed until after August 31, 2020, without interest and penalties.
More details to follow.
SUPPORT FOR CANADIAN COMPANIES THROUGH THE CANADA ACCOUNT
The Canada Account is a program administered by Export Development Canada and used by the government to support exports when it is determined to be in the national interest. Changes to the Canada Account will provide additional support to Canadian companies through loans, guarantees or insurance policies.
ACCEESS TO CREDIT FOR BUSINESSES
As announced last week, the Bank of Canada and Export Development Canada will be providing $10 billion in additional support, most of which will go to small and medium-sized businesses. This support will be provided through the Business Credit Availability Program. Short-term credit to farmers and the agri-food sector will also be increased through Farm Credit Canada. The Bank of Canada has also adopted a low interest rate policy in response to the crisis.
APPUISING THE LIQUIDITY OF THE FINANCIAL MARKET
The government will purchase up to $50 billion of insured mortgage pools through Canada Mortgage and Housing Corporation (CMHC). This will provide banks and mortgage lenders with stable, long-term funding to continue lending to Canadian consumers and businesses.
MEASURES AFFECTING INDIVIDUALS TEMPORARY MEASURES: INCOME SUPPORT FOR WORKERS AND PARENTS
Here are the measures to help individuals who do not benefit from paid sick leave (or a similar mechanism in the workplace) and who are ill, in quarantine or obliged to stay at home to look after their children:
Elimination of the mandatory one-week waiting period for people in quarantine claiming EI sickness benefits. This temporary measure was previously announced on 15 March 2020 and has already been in force since that date.
Elimination of the requirement to provide a medical certificate to access Employment Insurance sickness benefits.
Instatement of a new Emergency Care Allowance, providing up to $900 every fortnight for up to 15 weeks for employees and the self-employed:
Who are quarantined due to or have COVID-19 (but not eligible for EI sickness benefits);
Who are caring for a family member with COVID-19 (but not eligible for EI sickness benefits);
Who have children requiring care or supervision due to the closure of their school (whether or not they are eligible for EI).
The benefit application will be available from April 2020. Claimants will have to provide a certificate of eligibility and renew it every fortnight.
LONG-TERM MEASURES: INCOME SUPPORT FOR WORKERS
For Canadians who lose their jobs or face reduced working hours as a result of COVID-19 :
Instatement of an emergency support allowance for workers who do not qualify for employment insurance and who are hit by unemployment (details to come for the terms of application).
Employment Insurance Work-Sharing program relaxed. The eligibility period for work-sharing agreements is extended to 76 weeks, the eligibility conditions are modified and the application process is simplified.
TIMELY FILING OF INCOME TAX RETURNS AND PAYMENT OF TAX FOR INDIVIDUALS
The filing date for 2019 tax returns has been postponed:
Individuals other than trusts: June 1, 2020.
Trusts for the tax year ending December 31, 2019: May 1, 2020.
The date of payment of income tax under Part I of the Income Tax Act, as well as instalments, that become due as of March 18, 2020 and before September 1, 2020 is postponed until after August 31, 2020, without interest and penalties.
More details to follow.
As of today, the Canada Revenue Agency will recognize electronic signatures as meeting the requirements of the Income Tax Act on a temporary basis for T183 or T183CORP forms.
OTHER MEASURES FOR INDIVIDUALS
For low- and modest-income families, possible enhancement of the GST credit: an average of $400 more for singles and an average of $600 more for couples for 2019-2020.
For families, possible increase in the Canada Child Allowance: an additional $300 per child in the May payment.
Student loans: six-month moratorium on interest on Canada Student Loans for those currently repaying their loans.
Seniors: for 2020, 25% reduction in minimum withdrawal amount to preserve RRIF capital given volatile market conditions.
Thank you for your time.