The COVID-19 MARCH 25, 2020 UPDATES:
- Canada Emergency Response Benefit
- Expanding the Federal work share programs
- Expansion of eligibility for Federal Temporary Wage Subsidy for Employers
- Updated Federal Payment and Filing Extension information
- Ontario relief measures for business and individuals
Canada Emergency Response Benefit
The Federal government has introduced the Canada Emergency Response Benefit. This benefit replaces the two programs – the Emergency Care Benefit and the Emergency Support Benefit – introduced on March 18, 2020.
The new benefit will provide a taxable benefit of $2,000 a month for up to 4 months to:
- wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
- workers who must stop working due to COVID19 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 that are sick or need additional care 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.
The Canada Emergency Response Benefit will be accessible through a secure web portal starting in early April. Applicants will also be able to apply via an automated telephone line or via a toll-free number.
Payments under this program are expected to begin on April 16, 2020.
Extending the Federal Work-Sharing Program
The maximum duration of the Work-Sharing program has been extended from 38 weeks to 76 weeks. The Work-Sharing program is offered to workers who agree to reduce their normal working hours because of developments beyond the control of their employers.
Federal Temporary Wage Subsidy for Employers
The Temporary Work Subsidy is a taxable subsidy equal to 10% of the remuneration you pay between March 18, 2020 and June 20, 2020, up to $1,375 per employee and to a maximum of $25,000 total per employer, and available in the first remittance period that includes remuneration paid between the eligible dates.
The subsidy is now available to the following eligible employers:
- individuals and partnerships whose members include individuals, Canadian-controlled private corporation (CCPC) or charities, non-profit organizations, registered charities,and CCPCs if their taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, is less than $15 million;
- have an existing business number and payroll program account with the CRA on March 18, 2020; and
- pay salary, wages, bonuses, or other remuneration to an employee.
At present, the subsidy is not available to non-CCPCs.
The subsidy is calculated as follows, for example, if you have 5 employees earning monthly salaries of $4,100 for a total monthly payroll of $20,500, the subsidy would be 10% of $20,500, or $2,050. However, you cannot reduce your remittance of Canada Pension Plan contributions or Employment Insurance premiums.
If the income taxes you deduct are not sufficient to offset the value of the subsidy in a specific period, you can reduce future remittances to benefit from the subsidy. This includes reducing remittances that may fall outside of the application period for the wage subsidy (after June 20, 2020).
Updated Federal Payment and Filing Extensions
The CRA has clarified that tax payments for many entities are now confirmed to be due by September 1, 2020 rather than after August 31, 2020.
Of important note is the fact that there are, currently, no extensions to the following filing due dates:
- Partnerships with December 31, 2019 year ends – March 31, 2020 or, where all partners are corporations, May 31, 2020;
- T1134 – Information Returns Relating to Controlled and Not-Controlled Foreign Affiliates – March 31, 2020 for December 31, 2018 year ends;
- Foreign Reporting Forms – T1135, T1141 and T1142 (which will be March 30, 2020 for trusts and April 30, 2020, for individuals who are not self-employed
- Corporations – 6 months after the year-end for tax returns.
The CRA does not address the penalties for a corporation that files its tax return late but pays its tax balance before the extended balance due date of September 1, 2020.
Ontario Relief Measures
The Ontario government has announced the following relief measures for businesses and individuals today:
- increasing the Employer Health Tax exemption for 2020 from $490,000 to $1 million.
- a five-month relief period for Ontario businesses who are unable to file or remit their provincial taxes on time.
- introducing a new 10 percent refundable Corporate Income Tax credit, the Regional Opportunities Investment Tax Credit, would be available to eligible businesses that construct, renovate or acquire qualifying commercial and industrial buildings outside of Ottawa and the Greater Golden Horseshoe.
- permitting employers covered by the Workplace Safety and Insurance Board (WSIB) to defer payments for up to six months. No interest will be accrued on outstanding premium payments and no penalties will be charged during the six-month deferral period.
- providing a one-time payment of $200 per child up to 12 years of age, and $250 for those with special needs, including children, enrolled in private schools. To help families pay for the extra costs associated with school and daycare closures during the COVID-19 outbreak
- doubling the Guaranteed Annual Income System (GAINS) payment for low-income seniors for six months, to $166 per month for individuals and $332 per month for couples for six months, starting in April 2020.
- setting electricity prices at the lowest rate, known as the off-peak price, 24 hours a day for 45 days for eligible residential, farm and small business consumers.
- expanding eligibility for the Low-income Energy Assistance Program (LEAP) and ensuring that their electricity and natural gas services are not disconnected for nonpayment during the COVID-19 outbreak.
- providing emergency child care options to support parents working on the front lines, such as health care workers, police officers, firefighters, and correctional officers.
- expanding access to the emergency assistance program administered by Ontario Works to provide financial support to people facing economic hardship and help more people meet basic needs such as food and rent during this public health emergency.
- enhancing funding by $148 million for charitable and non-profit social services organizations such as food banks, homeless shelters, churches and emergency services to improve their ability to respond to COVID-19. The funding is to be provided directly to Consolidated Municipal Service Managers and District Social Service Administration Boards who will allocate this funding based on local needs.
- providing six months of Ontario Student Assistance Program (OSAP) loan and interest accrual relief for students, leaving more money in people’s pockets.
- Providing additional supports of $26 million to Indigenous peoples and communities, including emergency assistance for urban Indigenous people in financial need, and costs for health care professionals and critical supplies to reach remote First Nations.
- $ Providing five months of interest and penalty relief for businesses to file and make payments for the majority of provincially administered taxes, including Employer Health Tax, fuel and gas taxes, and beer, wine and spirits taxes.
- Deferring the upcoming June 30 quarterly municipal remittance of education property tax to school boards by 90 days, which will provide municipalities the flexibility to, in turn, provide property tax deferrals to residents and businesses, while ensuring school boards continue to receive their funding.