March 27 updates

Further Federal Responses to COVID-19

COVID-19 March 27, 2020 Update

In this update, we outline the following further Federal responses to COVID-19:

  • Enhancement of Federal Temporary Wage Subsidy for Employers
  • Deferral of GST/HST Payments
  • New vehicle for businesses to access loans up to $40,000
  • Extensions for Trusts, Partnerships and NR4 Information Returns
  • Reduction in Bank of Canada prime rate

Federal Temporary Wage Subsidy for Employers

The Temporary Work Subsidy is a taxable subsidy of remuneration you pay between March 18, 2020, and June 20, 2020.

Initially, the subsidy was set at 10% of remuneration paid, 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 has now been increased to 75% of remuneration paid and backdated to March 15, 2020.

Further details on how this subsidy is to be calculated are expected to be issued early next week.

As noted in our March 25, 2020 Update, the subsidy is now available to the following eligible employers:

  • individuals and partnerships whose members include individuals, Canadian-controlled private corporations (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.

Deferral of GST/HST Payments

The Federal government has announced a deferral of GST/HST payments until June 30, 2020, for the following filers:

  • Monthly filers who have to remit amounts collected for the February, March and April 2020 reporting periods;
  • Quarterly filers who have to remit amounts collected for January 1, 2020, through March 31, 2020 reporting period; and
  • Annual filers, whose GST/HST return or installment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year, and installments of GST/HST in respect of the filer’s current fiscal year.

Canada Emergency Business Account

Under this initiative, the Federal government will guarantee loans of up to $40,000 to small and medium-sized businesses and not-for-profit organizations.

To qualify for a loan, these companies and organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.

The loans will be interest- free for the first year.

Repaying the balance of the loan on or before December 31, 2022, will result in loan forgiveness of 25 percent (up to $10,000).

Extensions for Trusts, Partnerships and NR4 Information Returns

The Canada Revenue Agency has now extended the deadline for trusts, partnerships and NR4 Information returns filing from March 31, 2020 to May 1, 2020.

Bank of Canada bank rate

The Bank of Canada has reduced the prime bank rate from 0.75% to 0.25% as of today, March 27, 2020.