On April 2, 2020, the Finance Minister announced various updates on the measures the Canadian government is taking to support individuals and businesses. These new measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will now provide up to $82 billion in direct support to Canadians and Canadian businesses.
Changes to income tax filing and payment deadlines:
- The CRA has provided a dedicated web page that summarizes the new deadlines for all tax returns and tax payments: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html
UPDATES FOR BUSINESSES
The Canadian Emergency Wage Subsidy (CEWS)
The government announced a wage subsidy of 75% for qualifying businesses, for up to 3 months, retroactive to March 15, 2020.
Eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities.
The current update and details given:
- This subsidy will be available to eligible employers that see a drop of at least 30 percent of their revenue, year over year (i.e. March 2020 versus March 2019).
- Employers will need to attest to the decline in revenue and re-apply monthly.
- The subsidy will provide support of up to 75% of an employee’s wages for a 3 month period retroactive to March 15, 2020, to a maximum of $847/week (75% of the first $58,700 of an employee’s salary).
- The subsidy is limited to the lower of the above and the pre-crisis remuneration for the employees, including non arms-length employees (i.e. owners and shareholders)
- More information related to the CEWS can be found on the Government of Canada’s website here.
- The Canada Revenue Agency (CRA) will coordinate the CEWS through an online portal that is expected to be available in 3 to 6 weeks.
- Businesses will need access to CRA’s My Business Account portal in order to apply.
- For employers that do not qualify for the CEWS, they can still qualify for the 10% Wage Subsidy announced on March 18, 2020. More details on this subsidy can be found here.
The Canadian Emergency Business Account (CEBA)
The government will be extending $40,000 loans to qualifying businesses interest-free for one year, of which $10,000 will be forgiven if $30,000 is fully repaid on or before December 31, 2022.
- In order to be eligible the business must have had payroll in 2019 of $50,000 to $1 million
- Businesses must contact their existing financial institutions to apply; however, not all major banks have announced the details of their programs yet
- More details on this program can be found here.
GST/HST Remittance Deferral
To support Canadian businesses in the current extraordinary circumstances, the Minister of National Revenue will extend until June 30, 2020 the time that:
- Annual filers, whose GST/HST return or instalment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.
- Quarterly filers have to remit amounts collected for the January 1, 2020 through March 31, 2020 reporting period; and
- Monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods;
- More details on this program can be found here.
UPDATES FOR INDIVIDUALS
Canada Emergency Response Benefit
This program will replace the previously announced Canada Emergency Care Benefit and Canada Emergency Support Benefit. Applications are set to become available April 6 through CRA’s My Account portal and will provide a $2,000 monthly benefit for 4 months to workers:
- Who must stop working due to COVID-19 and do not have access to paid leave or other income support.
- Who are sick, quarantined, or taking care of someone who is sick with COVID-19.
- Who are working parents and must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
- Who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.
- wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
To be eligible for the CERB, applicants must have had at least $5,000 in employment income, self-employment income, or maternity or parental leave benefits for 2019 or in the 12-month period preceding the day they make the application.
CRA will begin to accept applications on April 6 and there are specific rules to follow when applying (i.e. based on the month you were born). Please review the details on the Government of Canada website here.
If you do not yet have access to CRA My Account for Individuals, we recommend that you set up your account as soon as possible, as the process can take 5-10 days. If you require assistance from an Accountant Toronto we would be happy to help.