Approximately an hour ago, like many of you, our team members were watching our Prime Minister deliver news that the Canada/US border was closing to non-essential traffic as well as unveiling the Economic Response Plan.
I am going to provide you with my interpretation of the Response Plan based on the facts that are currently provided.
Support for Individuals
The first area of support is focused to individuals and their families. First, there is the waiving of the one week waiting period for folks who are quarantined in respect of EI benefits. These individuals are not required to provide a medical certificate to access EI sick benefits.
A new measure is the Emergency Care Benefit. This benefit can provide up to a maximum of $900 biweekly for up to 15 weeks and is designed to support workers and self employed individuals who are quarantined or sick and are not eligible for EI. The Benefit is also available to workers or self employed individuals are are taking care of a family member who is sick with COVID-19 and it also extends to parents with children who require care due to school closures. It is available to parents if they cannot work because they do not have child care for their children, and it does not matter if the parent is EI eligible or not.
The Emergency Care Benefit is being administered by the Canada Revenue Agency (CRA). You can apply for this program beginning in April via your CRA My Account or your My Service Canada account.
The government is also providing long term support for workers through a Emergency Support Benefit which will support workers who are not eligible for EI. As well, a EI Work Sharing program is introduced for workers willing to reduce their work hours.
Besides EI measures, the Government announced a special one time payment via HST/GST in early May 2020. The average boast to income for eligible individuals will be approximately $400 for individuals or $600 for a couple.
Families will be supported via an increase to the Canada Child Benefit by increasing the benefit by $300 per child. The one time increase will be reflected in May’s CCB payment.
Other measures included relief on Student Loan interest and for folks drawing on their Registered Retirement Income funds, minimum withdrawal requirements will be reduced by 25% (this helps Seniors maintain investments that have been hit hard in the market as they will not have to liquidate as much of these assets during 2020).
Your Personal Tax Filings
Due to the upset and turmoil caused by the CORVIN-19 virus, individuals are getting an extension to file their tax returns. T1 or personal tax returns deadline has been moved to June 1, 2020 providing an additional month to file. I would recommend folks that access programs such as the Canada Child Benefit and HST/GST to get their personal tax returns filed as soon as they can. These programs use the T1 filing for calculation of benefits effective July 2020.
Individuals will also get an extension on paying their taxes. Any balances incurred as of today and forward, the due date for payment to August 31, 2020. No interest or penalties will be charged during this period.
Support for Businesses
Businesses are also being supported under this Plan. Businesses that can maintain their workforce can be eligible for a wage subsidy for a period of three months. The subsidy is equal to 10% of wages paid during this period to a maximum subsidy of $1,375 per employee to a total subsidy of $25,000 per employer. Small business owners will be able to reduce the amount of payroll remittances being made as a means to access the subsidy. This wage subsidy is available to corporations eligible for the Small Business deduction as well as non profit organizations and Charities. Not sure if it is applicable to your business or organization, then feel free to reach out to us, we can help?
Other good news for Businesses? You bet! The CRA is allowing for any payments of income tax being owed as of today and before September 2020 to be deferred until August 31, 2020. This relief includes instalments as well as tax liabilities. During this period, penalties and interest will not incur on any outstanding balance.
Small businesses won’t see a CRA Tax Auditor in the next four weeks either. All audit actions are suspended by CRA at this time.
There are other resources available out there for small business owners. Export Canada, Business Development Corp (BDC) and Farm Credit Canada have opportunities to assist business owners during this difficult times.
In summary, the Federal government has implemented measures to assist all Canadians during this challenging time. Along with the measures I have summarized above, Trusts who have a December 31, 2019 year end have a one month extension for filing, with the filing deadline moved to May 1, 2020.
Invidividuals can seek out debt relief options with their banks, as all major banks are assisting Canadians with their finances during this time.
Full details of the program can be accessed at this link: https://www.canada.ca/en/department-finance/news/2020/03/canadas-covid-19-economic-response-plan-support-for-canadians-and-businesses.html
We will continue to monitor the situation and provide updates on programs, subsidies and opportunities as we find out about them. Stay safe everyone and let’s look out for one another.