COVID-19: Canada’s Tax Measures to help Canadians with filing and paying taxes

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The Government of Canada has announced a series of economic measures designed to support Canadian workers and businesses.
We have summarized the key measures and the mechanisms in a short list that is easy to follow:

Tax Relief Measures:

  • Filing deadlines:
    • For Individuals: Tax filings have been delayed to June 1, 2020
    • For Trusts: Tax filings have been delayed to May 1, 2020
    • For Corporations: Tax filings due after March 18, 2020 is deferred until June 1, 2020.
    • For Partnerships: Tax filings have been delayed to May 1, 2020
    • For Non-resident information returns: The deadline to file Form NR4 has been delayed to May 1, 2020 . The deadline to file Form T1134 has been delayed to June 1, 2020.
  • Payment of Taxes
    • Income taxes: The payment of any (Personal, Corporate, and Trusts) income tax amounts that become owing on or after March 18, 2020 and before September 2020 may be deferred to after August 31, 2020. This measure only applies to amounts that become payable under Part I of the Income Tax Act(ITA). This measure does not apply to taxes owing under other parts of the ITA such as Part IV, Part V1.1 and Part XIII withholding tax.
    • GST/HST and import duties: On March 27, 2020 Canada’s prime minister announced that the remittances of GST/HST as well as import duties would be deferred until June 30, 2020.

Support for Individuals and Corporations

Temporary income support for workers: The government announced a new Emergency Care Benefit to assist workers who, as a result of the current situation, are unable to work as a result of illness or closures. The program will become available in April (April 6) and will provide up to $900 biweekly for up to 15 weeks. This program is available to the following individuals:

  • Workers, including the self-employed, who are quarantined or sick but do not qualify for EI sickness benefits
  • Workers, including the self-employed, who are taking care of a family member who is sick, but do not qualify for EI sickness benefits
  • Parents with children who require care or supervision due to school closures and are unable to earn employment income, irrespective of whether they qualify for EI

Federal wage subsidy program

Under the terms of the program, eligible employers can receive a subsidy equal to 75 per cent of the remuneration paid by an eligible employer between March 15, 2020 and June 20, 2020. There is also a per employee cap of $1,375 and a maximum total subsidy of $25,000 per employer. CCPCs that are associated with each other will each have their own $25,000 limit and will not be required to share or allocate this limit among them, unlike other income tax limits.

Improved access to credit:

Measures have been implemented to provide businesses with increased access to credit. The Business Credit Availability Program is now available to allow the Business Development Bank of Canada and Export Development Canada (EDC) to provide more than $10 billion of additional support aimed at small and medium-sized businesses. Farm Credit Canada is also increasing the near-term credit available to farmers and other businesses in the agri-food sector.

Canada’s large banks will also have access to an additional $300 billion in funds as a result of the lowering of the Domestic Stability Buffer by 1.25% of risk-weighted assets, effective immediately. This action, in addition to last week’s dropping of the Bank of Canada’s emergency interest rate cut to 0.75% may help to increase companies’ ability to access credit during the financial hardship resulting from the current situation.

In addition, changes have been made to the Canada Account that is administered by EDC, which supports exporters. The changes will now allow the Minister of Finance to determine the limit of the Canada Account in order to deal with exceptional circumstances, thereby providing additional support to Canadian companies through loans, guarantees or insurance policies.

Other support from lending institutions

Canada’s banks have committed to working with customers to provide flexible solutions, on a case-by-case basis, for those affected by recent developments. This support will include up to a six-month payment deferral for mortgages and the opportunity for relief on other credit products. The Canadian Mortgage and Housing Corporation (CMHC) is also providing increased flexibility for homeowners facing financial difficulties. These flexibility measures include the ability to defer mortgage payments on homeowner CMHC-insured mortgage loans.

Enhanced Canada Child Benefit payments

On a one-time basis, for the 2019–20 benefit year only, the maximum annual Canada Child Benefit payment amounts will be increased by $300 per child. The increase will be included as part of the May 2020 payment. Legislative changes will be passed on an emergency basis to implement this measure.

RRIF withdrawals 

The required minimum withdrawals from RRIFs will by reduced by 25% for 2020. This measure will reduce the amount of RRIF assets that an individual may need to liquidate to meet the minimum withdrawal requirements. Similar measures will be introduced for individuals receiving variable benefit payments under a defined contribution registered pension plan. These measures will apply immediately, with supporting legislation to follow at a later date.

We will provide updates as they become available. Make sure to check our blog frequently.