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Government updates on COVID-19 relief

Mar 27 2020

Recent Updates

During todays COVID-19 update the Prime Minister provided an announcement on new measures for businesses.  These include:

  • The Temporary Wage Subsidy has been increased to 75% from 10% for eligible businesses (details to come from the Federal Government);
  • Up to $40,000 in government guaranteed interest-free loans from the banks will be offered, with up to $10,00 to be forgiven; and,
  • March, April and May GST/HST payments are deferred until the end of June.

Additional support for Canadian businesses that were announced today can be read here.

Stay tuned for further updates next week when the government releases additional details. 

WCB Deferral and Reduction

The Alberta government has announced measures to provide financial support to private sector employers during the COVID-19 outbreak relating to WCB premiums.  Specifically:

  • All private sector employers will have their 2020 WCB premiums deferred until 2021; and,
  • When invoiced in 2021, small and medium sized private sector employers will have 50 per cent of their 2020 premiums waived.

WCB has indicated that it will refund employers who have already made payments towards their 2020 premiums. 

For full details you can read the WCB Employer Fact Sheet.

Additional Information on Temporary Wage Subsidy

On March 24, 2020, the Canadian Government introduced Bill C-13 An Act Respecting Certain Measures in Response of COVID-19.  Bill C-13 received Royal Assent on March 25, 2020.  Included in Bill C-13 is a Temporary Wage Subsidy that allows eligible employers to reduce the amount of payroll deductions that are to be remitted to CRA (note that this does not reduce the amount withheld from employees – just the amount remitted to CRA).  The amount of the subsidy will be taxable income to the employer.

The subsidy is equal to 10% of the remuneration paid to employees employed in Canada between March 18, 2020 and June 20, 2020 to maximum of $1,375 per employee and $25,000 per eligible employer.  As noted above it was announced that there would be adjustments to these amounts, including increasing the percentage up to 75% for qualifying businesses.  We will provide further details when they are available next week.

An eligible employer means a:

  1. Canadian controlled private corporations that had a business limit for the purpose of calculating the small business deduction in it preceding taxation year;   
  2. An individual;
  3. A registered charity;
  4. A partnership, all of the members of which would meet one of the conditions 1 to 4; or,
  5. A non-profit organization

To be an eligible employer, it is necessary to have an existing business number and payroll program account with the CRA on March 18, 2020 and employ one or more individuals in Canada.  For Canadian controlled private corporations, the taxable capital of the corporation and all associated corporations for the most recent taxation year must be less than $15,000,000.  However, for the purpose of this subsidy, the reduction to the business limit for passive income in excess of $50,000 is not considered.  In addition, each corporation in an associated group is eligible for the full $25,000 subsidy provided they had a business limit in its most recent taxation year and had an existing business number and payroll program account with the CRA on March 18, 2020.  

Please contact your trusted advisory at Mowbrey Gil if you need help determining whether your business qualifies or for assistance with calculating and reducing remittances.

Key Deadline Changes

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 penalties or interest if your balance due is paid by September 1, 2020.  This relief also applies to tax instalments, under Part I of the Income Tax Act. 

Individuals

  • The deadline to file your income tax return has been deferred until June 1, 2020.  However we encourage individuals who expect to receive refunds not to delay the filing of their returns.

Partnerships

  •  The deadline for partnership information returns are all extended to May 1, 2020.

Trusts and NR4 Information Returns

  •  For 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.  Furthermore, 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.

Charities

  • The Charities Directorate is extending the filing deadline to December 31, 2020, for all charities with a Form T3010, Registered Charity Information Return due between March 18, 2020 and December 31, 2020.
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