The Government of Canada has announced relief for Canadians. The relief comes in the form of financial support and extension of tax filing deadlines.
Flexibility for Taxpayers
The Canada Revenue Agency (CRA) has provided relief for taxpayers.
Extension of Tax Filing Deadlines:
Taxpayer Year-End Original Due Date Revised Due Date
Personal income tax returns
December 31, 2019 April 30, 2020 June 1, 2020
Trust income tax returns
December 31, 2019 March 31, 2020 May 1, 2020
There were no changes announced to extend the tax filing deadline for corporate taxpayers.
Items to note:
At the time of writing this article, the CRA has not released any information on extending the deadline for:
Individuals who are self-employed who had a June 15, 2020, personal income tax filing deadline.
Trusts with year ends other than December 31, 2019.
Returns related to taxes other than the income tax such as GST returns etc.
Extension of Tax Payment Deadlines to August 31, 2020:
Taxes and instalments payments that became owing on or after March 18, 2020, and before September 2020 are deferred to August 31, 2020. No interest or penalties will accumulate on these amounts during this period.
Items to note:
The tax payment extension only applies to Part I tax under the Income tax Act. As such, the payment of other Federal taxes (i.e. Part XIII withholding tax on distributions to non-residents, Goods and Sales Tax) are not currently covered by this extension
The CRA will temporarily allow electronic signatures as having met the signature requirements of the Income Tax Act including authorization forms including the forms required to electronically file tax returns; The CRA will not contact small or medium businesses to initiate any post-assessment GST/HST or Income Tax audits for the next four weeks.
The Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.
The Liaison Officer is now available over the phone.
Financial Support for Businesses
Helping Businesses Keep their Workers:
Small employers (i.e. corporations eligible for the small business deduction, as well as non-profit organizations and charities) will be provided with a temporary wage subsidy for 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 can access this benefit immediately by reducing the remittance of income tax withheld on employees’ remuneration.
Supporting the Economy:
Lowering the Domestic Stability Buffer to allow Canada’s large banks to inject $300 billion of additional lending in addition to the interest rate decrease announced last week (to 0.75%).
Providing additional funding for the Business Credit Availability Program for small and medium-sized businesses to financially support businesses and provide them with credit solutions.
Increasing the Farm Credit Canada’s near term credit available to farmers and the agri-food sector.
Reducing the administrative burden by allowing the Minister of Finance to determine limits on the Canada Account which is used by the government to support exporters.
Financial Support for Canadian Workers:
Temporary Income Support for Workers and Parents
Relief for Canadians, who do not have access to paid sick leave and are sick, quarantined or forced to stay home to care for children include:
One week waiting period for EI on imposed quarantine waived effective as of March 15, 2020
Waiving requirement to provide a medical certificate to access EI sickness benefits
The Emergency Care Benefit program will provide up to $900 bi-weekly, for up to 15 weeks. The application for this benefit is available in April and evidence must be provided to ensure they meet the eligibility requirements.
Support for workers including the self-employed who do not otherwise qualify for EI sickness benefits and are: quarantined or sick with COVID-19; or taking care of a family member who is sick with COVID-19. Parents with children who require care or supervision due to school closures and as such, cannot perform their employment duties.
Longer-Term Income Support for Workers
Relief for Canadians who may lose their jobs or have reduced hours due to COVID-19 the government will introduce programs:
The Emergency Support Benefit for workers who are not eligible for EI and the EI Work Sharing Program.
The EI Work Sharing Program by easing eligibility requirements and streamlining the application process for employees who agree to reduce their normal working hours
Income Support for Individuals Who Need It Most
Doubling the maximum annual Goods and Services Tax credit payment amounts for the 2019-20 benefit year.
Increase of the maximum annual Canada Child Benefit payment amounts for the 2019-20 benefit year (increased to $300 per child).
A 6-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 for seniors.
Funding the Reaching Home initiative to support people experiencing homelessness during the COVID-19 outbreak.
Providing funding to women’s shelters and sexual assault centres.
Funding the Indigenous Community Support Fund to address immediate needs in First Nations, Inuit, and Métis Nation communities.
Other Support and Relief Provided
Financial Institutions have affirmed their commitment to working with customers to provide flexible solutions, on a case-by-case basis, for managing through hardships caused by recent developments including a 6-month deferral for mortgages.
Mortgage insurers including the Canada Mortgage and Housing Corporation (CMHC) have tools to assist homeowners experiencing financial difficulties.
The Government has created the Insured Mortgage Purchase Program which will help support the market through the purchase of insured mortgage pools through the CMHC.
The Bank of Canada is to adjust its market liquidity operations, broaden eligible collateral its term repo facility and preparing for providing support for the Canada Mortgage Bond if required.
Speak to your financial institution to determine the relief you can access.
The above content is believed to be accurate as of the date of posting. Canadian tax laws are complex and are subject to frequent changes. Professional tax advice should be sought before implementing any tax planning. Gram LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained herein.