March 27, 2020
Additional Economic Support Announced by the Government of Canada
Written by: Sheryne Mecklai, CPA, CA, TEP, Bryan Hubbell, CPA, CGA, and Mike Ronse, CPA, CGA
Today, Prime Minister Justin Trudeau and Canada’s Minister of Finance Bill Morneau, announced additional economic support that will be available to Canadians dealing with the impacts of COVID-19. More details including the legislation around this relief are expected to be released early next week.
Temporary Wage Subsidy:
The temporary wage subsidy has been increased from 10% to 75% and the increase will be applied retroactively to March 15, 2020. Other details have not been provided as to how the subsidy will function.
Extension of Tax Filing Deadlines
Extensions of returns, forms, elections and designations due between March 18, 2020, to June 1, 2020, for:
Trusts – extended to May 1, 2020
Partnerships – extended to May 1, 2020
NR4s – extended to May 1, 2020
Individuals (excluding trusts) – extended to June 1, 2020
Extensions of returns, forms, elections and designations due between March 18, 2020, to December 31, 2020, for:
Registered Charities extended to December 31, 2020
Extensions have not been granted for:
Corporate income tax returns still due 6 months after the fiscal year-end
Personal returns for self-employed and their spouse still due on June 15, 2020
Trust returns due before March 18, 2020, or after June 1, 2020, still due 90 days after the trust’s year-end
Penalties and interest amounts on amounts owing will not be charged if these new deadlines are met.
Deferral of GST/HST
Deferral of GST/HST payments to June 30, 2020, for:
Monthly filers with remittance for amounts collected in February, March and April 2020;
Quarterly filers with remittance for amounts collected from January 1, 2020, to March 31, 2020; and
Annual filers whose GST/HST return and remittances due in March, April or May 2020 for their previous fiscal year and current year GST/HST instalments.
GST on imported goods due in March, April or May.
Custom Duties
Payments and filings for customs duties deferred to June 30, 2020.
New Loan Programs
Canada Emergency Business Account for Small Business and NPOs
Small business and not for profits which paid between $50,000 and $1 million in payroll in 2019 are eligible to receive interest-free loans of up to $40,000 through their financial institutions. If this loan is repaid on or before December 31, 2022, 25% (up to $10,000) will be forgiven.
Additional Loan Programs for Small and Medium-Sized Enterprises (“SME”)
Export Development Canada will guarantee new operating term loans that financial institutions extend to SMEs, up to $6.25 million
Business Development Bank of Canada and financial institutions will provide additional lending to SMEs through co-lending programs for eligible businesses of up to $6.25 million
Clients should contact their financial institutions to determine their eligibility for these additional loans.
Other CRA Administrative Relief
Collections activities on new debts will be suspended until further notice, and flexible payment arrangements will be available. – speak to the collections officer
Banks and employers do not need to comply or remit on existing requirement to pay (i.e. garnished amounts) during this time
Taxpayers who are unable to file a return or make a payment by the tax-filing and payment deadlines because of COVID-19 can request the cancellation of penalty and interest charged to their account
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. Manning Elliott LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained herein.