Canada’s COVID-19 Economic Response Plan
Updated: Mar 26
****THE INFORMATION WITH RESPECT TO THE ECONOMIC RESPONSE PLAN WAS UPDATED MARCH 25, 2020 WHEN THE LEGISLATION WAS FORMALLY APPROVED. PLEASE REFER TO OUR MARCH 25, 2020 POST FOR THE UPDATED INFORMATION****
March 18, 2020
Today the PM and Minister of Finance provided numerous stimulus announcements for which there is a link to the full details below Here is a summary of the highlights as well:
A subsidy will be provided for up to three months to eligible small employers’ equivalent to 10% of remuneration paid during the three month period. The subsidy will result in up to a maximum credit of $1,375 per employee and $25,000 per employer.
This is an immediate subsidy in that your remittance to CRA for taxes withheld deductions can be reduced.
An eligible employer is a corporation that is eligible for the small business deduction as well as non-profit organizations and charities.
In addition to the subsidies, businesses can defer payments for corporate taxes owing and installments until August 31, 2020.
CRA will not contact any small or medium business to initiate any post assessment of GST/HST or income tax audits for the next four weeks and they will temporarily suspend audit interaction with taxpayers.
For those employees that do not have access to paid sick leave and are sick, quarantined or forced to stay home to care for children:
One week waiting period for EI will be waivedNo medical certificate will be required
A new Emergency Care Benefit (ECB) providing up to $900 bi-weekly for up to 15 weeks has also been announced. This is administered through CRA and provides support to the following:
Workers including self-employed individuals who are quarantined or sick with COVID-19 and would not qualify for regular EI sickness benefits. Workers including self-employed who are taking care of a family member with COVID-19 and do not qualify for regular EI sickness benefits. Parents with children who require care and supervision due to school closures
Applying for this ECB will be available in April 2020 and through CRA via My Account, My Service Canada account or by calling a toll free number (still to be released).
Coming early May 2020 there will be additional funds pushed out through the GST/HST program for those that qualify.
For those receiving the Canada Child Benefit, there will be an increase to the maximum benefit of $300 per child for the 2019-20 benefit year and this will start with payments in May.
There will be a six month interest free period on the repayment of Canada Student Loans
Minimum Registered Retirement Income Fund withdrawals will be reduced by 25% for 2020 to reduce the impact on retirement plans due to the decline in the stock market.
Personal tax return filing deadlines have been extended to June 1, 2020.
Trusts that have December 31, 2019 year ends will have until May 1, 2020 to file their returns.
Filings deadlines for corporate clients have not been extended at this time
All taxpayers that will have payments due after today’s date and before September 2020 can defer such payments until after August 31, 2020.
Any payments not made during this period of time will not attract interest and/or penalties.
The business credit availability program will allow the BDC and EDC to provide $10 billion in additional support. These agencies are working with private sector lenders to coordinate credit solutions for businesses.
For farm operations the credit available will be increased through Farm Credit Canada.
The Government of Canada is taking immediate, significant and decisive action to help Canadians facing hardship as a result of the COVID-19 outbreak.
On March 18, 2020, the Prime Minister announced a new set of economic measures to help stabilize the economy during this challenging period. These measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses.
To all of our businesses that are struggling with what to do pertaining to staff and operations, the government today announced initiatives to try to assist you financially as well as your employees.
One initiative that has existed prior to this COVID-19 disaster is a program known as work share.
The program is part of the EI benefits program and what it allows you to form an agreement with your staff to have them enter into a work share arrangement with another staff member. Under the government initiatives announced today, such work share arrangement can be in place for a period of 76 weeks.
The program requires the employer to file an application and typically this application is supposed to be submitted 30 days prior to the work sharing start date. I have not been able to find anything that shortens that time period re application in any of the announcements today.
If you desire to look at this program for any of your staff then please click here for more information. Although this process seems to be a good alternative, it may not be suitable in the current situation as the 30 day application period may be prohibitive.