Summary of Federal and Provincial Initiatives related to COVID-19

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Summary of Federal and Provincial Initiatives related to COVID-19

April 2, 2020

Important Changes to tax Filing and Payment Deadlines:

Individuals

The deadline to file your income tax and benefit return is deferred to June 1, 2020
The deadline to pay any balance due for your individual income tax and benefit return for 2019 is extended from April 30, 2020, to September 1, 2020, including self-employed. No penalties or interest will be assessed if your balance due is paid by September 1, 2020.

Businesses

The deadline for businesses to pay any income tax amounts that become owing or due after March 18, 2020 and before September 1, 2020 has been extended to September 1, 2020. This means you will not be assessed any interest if your balance due is paid by September 1, 2020.

Trusts

Trusts with a taxation year-end of December 31, 2019, the filing due date of March 31, 2020, will be deferred to May 1, 2020
All trusts that have an upcoming income tax balance due date or an income tax instalment payment due date before September 1, 2020, will have their payment due date effectively extended to September 1, 2020
Penalty and interest implications for upcoming trust tax obligations not covered by the relief described above will be considered by the CRA on a case-by-case basis

Federal Support for Businesses:

Canada Emergency Wage Subsidy

The Canada Emergency Wage Subsidy would apply at a rate of 75 percent of the first $58,700 normally earned by employees – representing a benefit of up to $847 per week. The program would be in place for a 12-week period, from March 15 to June 6, 2020.
Eligible employers who suffer a drop in gross revenues of at least 30 percent in March, April or May, when compared to the same month in 2019, would be able to access the subsidy.
Eligible employers would include employers of all sizes and across all sectors of the economy, with the exception of public sector entities.
For non-profit organizations and registered charities similarly affected by a loss of revenue, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their circumstances. The government is also considering adding support for non-profits and charities, particularly those involved in the front line response to COVID-19. Further details will be announced in the near term.
An eligible employer’s entitlement to this wage subsidy will be based entirely on the salary or wages actually paid to employees. All employers would be expected to at least make the best efforts to top up salaries to 100% of the maximum wages covered.

The Canada Emergency Wage Subsidy will enable employers to re-hire workers previously laid off and to keep those who are already on the payroll.

Eligible employers would be able to access the Canada Emergency Wage Subsidy by applying through a Canada Revenue Agency online portal. More details regarding how to apply for the program will follow. Those organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 10 percent of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.

Government Announces Details of the Canada Emergency Wage Subsidy
https://www.canada.ca/en/department-finance/news/2020/04/government-announces-details-of-the-canada-emergency-wage-subsidy-to-help-businesses-keep-canadians-in-their-jobs.html

Canada Emergency Wage Subsidy
https://www.canada.ca/en/department-finance/news/2020/04/the-canada-emergency-wage-subsidy.html

Canada Emergency Business Account

This program will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus. Small businesses and not-for-profits should contact their financial institution to apply for these loans.

To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).

More eligibility details are to be released by the Federal Government.

GST/HST Remittance Deferral

Payments are extended until June 30, 2020, as follows:

Monthly filers – on amounts collected for the February, March and April 2020 reporting periods;
Quarterly filers – on amounts collected for January 1, 2020, through March 31, 2020 reporting period; and
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.

Additional Support for Canadian Businesses from the Economic Impact of COVID-19
https://www.canada.ca/en/department-finance/news/2020/03/additional-support-for-canadian-businesses-from-the-economic-impact-of-covid-19.html

Support to Businesses
https://www.canada.ca/en/department-finance/economic-response-plan/covid19-businesses.html

Federal Support for Individuals and Families:

Financial Relief from Canada’s Largest Banks

Canada’s 6 largest banks have announced support that will include, on a case-by-case basis, up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products.

EI Measures:

Canada Emergency Response Benefit (CERB)

This benefit replaces the previously announced Emergency Care Benefit and the Emergency Support Benefit. The portal for accessing the CERB would be available in early April. EI eligible Canadians who have lost their job can continue to apply for EI here, as can Canadians applying for other EI benefits.

CERB is meant to support

workers who must stop working due to COVID-19 and do not have access to paid leave or other income support
workers who are sick, quarantined, or taking care of someone who is sick with COVID-19
working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.
workers 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, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).

CERB would provide

$2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic.
Canadians would begin to receive their CERB payments within 10 days of application
Benefits will be paid every 4 weeks for up to 4 months.

To Register for your My Service Canada Account, follow this link
https://www.canada.ca/en/employment-social-development/services/my-account/gckey.html

CERB VS EI

Canadians who are already receiving EI regular and sickness benefits as of today would continue to receive their benefits and should not apply to the CERB.
- If their EI benefits end before October 3, 2020, they could apply for the CERB once their EI benefits cease,
  o if they are unable to return to work due to COVID-19. Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply.
- Canadians who are eligible for EI regular and sickness benefits would still be able to access their standard EI benefits, if still unemployed, after the 16 weeks covered by the CERB.
EI eligible Canadians who have lost their job can continue to apply for EI, as can Canadians applying for other EI benefits.

Canada Child Benefit

Eligible recipients will receive $300 more per child with their regular May CCB payment
If you have previously applied for the CCB, you do not need to re-apply

Support for Individuals
https://www.canada.ca/en/department-finance/economic-response-plan/covid19-individuals.html

For more information on Canada’s COVID-19 Economic Response Plan
https://www.canada.ca/en/department-finance/economic-response-plan.html

BC Provincial Government Initiatives to help British Columbians Facing Hardship due to COVID-19:

For Businesses

Deferred Tax Payments

BC is extending filing and payment deadlines for the following taxes until September 30, 2020:

Employer health tax
Provincial sales tax (including municipal and regional district tax)
Carbon tax
Motor fuel tax
Tobacco tax

Reduced School Tax Rates for Businesses

School tax rates for commercial and industrial properties (Classes 4, 5 and 6) will be reduced by 50% for the 2020 tax year.

For Individuals and Families

Enhanced BC Climate Action Tax Credit

An additional one-time payment will be made in July 2020 on top of the regular climate action tax credit amount for qualifying individuals and families

BC Emergency Benefit for Workers

The BC Emergency Benefit for Workers will provide a one-time $1,000 payment to people who lost income because of COVID-19.

BC residents who receive Federal Employment Insurance, or the new Canada Emergency Response Benefit are eligible
Applications will open in April 2020
The one-time payment will be paid in May 2020

Climate Action Tax Credit
A one-time enhancement to the climate action tax credit will be paid in July 2020 for moderate to low-income families:

An adult will receive up to $218.00 (increased from $174.00)
A child will receive $64.00 (increased from $51.00)

BC Student Loans

Starting March 30, 2020, BC student loan payments are automatically frozen for six months.

Rental Rebate, Moratorium on Evictions and Rent Freeze

The BC Government is offering a $500/month payment for the next 3 months which will be paid directly to landlords. The funds will support renters experiencing a loss of income by helping them pay their rent and will be paid directly to landlords on their behalf, to ensure landlords continue to receive rental income during the pandemic. Benefiting people with low to moderate incomes, this supplement will be available to renters who are facing financial hardship as a result of the COVID-19 crisis but do not qualify for existing rental assistance programs.

Assistance with Monthly Bills

BC Hydro

Residential Customers:
- If you or your spouse/partner have lost employment or have become unable to work due to COVID-19, you may be eligible for three months of bill credit based on your average consumption.
- The application is not open yet, but we expect it to be open the week of Monday, April 6. Once it opens, there is no rush to apply. Eligible customers can apply any time until June 30, 2020, to receive the credit.
Small Business Customers
- If you own a small business that needed to close due to COVID-19, you may be eligible to have your business’ electricity use charges waived for up to three months.
ICBC
- Customers on a monthly payment plan who are facing financial challenges due to COVID-19 may defer their payment for up to 90 days with no penalty.

BC Hydro COVID-19 Relief Fund
https://app.bchydro.com/accounts-billing/bill-payment/ways-to-pay/covid-19-relief-fund.html

COVID-19 Provincial Support and Information, please visit the Government of British Columbia’s website
https://www2.gov.bc.ca/gov/content/safety/emergency-preparedness-response-recovery/covid-19-provincial-support

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.