COVID-19 Update: CRA Economic Response Plan

March 19, 2020

Yesterday morning, Prime Minister Trudeau announced the federal government is prepared to spend $27 billion on direct financial help and will provide businesses with $55 billion in liquidity, mainly through mainly tax deferrals, in response to the COVID-19 crisis. 

In the sections below we have summarized the most pertinent benefits and programs that apply to individuals and private business owners.

What we know from CRA

For Businesses

  • Service Canada will be waiving the one-week waiting period for EI sickness benefits for six months and waiving the requirement for a doctor’s note to access this assistance. This will allow employees to have quicker access to EI funds. Please refer to our post about ROEs for more information.
  • Businesses can defer payment of corporate income taxes due and instalments for any amounts that become due as of March 17, 2020 and up to August 31st.  There will be no accumulation of interest and/or penalties for this deferment.
  • No initiation of any post-assessment GST or Corporate Income tax audits for the next 4 weeks and will suspend audit interactions with existing files for the majority of businesses.

For Individuals

  • The Canada Child Benefit (CCB) will have a one time increase of $300 per child paid as part of the May payments
  • Doubling of the maximum annual GST Credit payment will be paid out to low-income individuals as a one-time payment as part of the May payments.
  • Emergency Care Benefit – a new measure introduced that will provide up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit will be administered through the CRA and will provide income support to workers, including the self-employed, who:
      • are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
      • are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not qualify for EI sickness benefits.
      • Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.
    • The Emergency Care Benefit will be available starting in April 2020. Individuals will need to attest that they meet the eligibility requirements and re-attest every two weeks that they are still eligible. This benefit can be applied through the following methods:
        • Accessing it through your CRA My Account portal
        • Accessing it from your My Service Canada Account
        • Calling a toll free number that will be provided at a later time
  • Tax filing deadline for individuals has been extended to June 1, 2020. Additionally, taxpayers can defer payment until August 31, 2020 (including instalments) without interest or penalty.
      • We are fully set up to work remotely and at full capacity to complete your personal taxes as soon as possible so there is one less thing to worry about and you get any refund owed to you sooner! We encourage you to file your tax returns without delay so that your eligibility for Canada Child Benefits and GST Credits are properly determined
  • 6-month interest-free pause on Canada Student Loans repayments for all individuals
  • Reduction in the minimum RRIF withdrawals by 25% for 2020 as well as for defined contribution RPPs – allowing for flexibility and not forcing the liquidation of investments at a time when the markets are volatile
  • Big 6 banks have agreed to work with individuals on a case-by-case basis to provide flexible solutions related to credit products they offer including up to a 6-month deferral for mortgages (CMHC eligible and otherwise). Please contact your bank for information on what they can offer you

What has been announced but details are forthcoming

For the following measures, we have limited information at this time and will provide updates on the specifics as soon as we get more information from the government.

For Businesses

  • Temporary Business Wage Subsidy program will provide eligible small businesses with a 10 percent wage subsidy for the next 90 days, up to a maximum of $1,375 per employee and $25,000 per employer
      • This will be eligible for corporations that qualify for the small business deduction, non-profit organizations and charities. We are waiting for more information on the exact mechanisms of this subsidy and will reach out when more information is available.
  • Big 6 banks have agreed to work with businesses on a case-by-case basis to provide flexible solutions related to credit products they offer including up to a 6-month deferral for mortgages (CMHC eligible and otherwise). Contact your bank for information on what they can offer you.

For Individuals

  • Emergency Support Benefit program will provide financial support to those that will become unemployed and have no EI coverage. This will be administered through the CRA with more details to come.

What you can do right now

In these unprecedented times, we understand that there is a lot of information to disseminate and we at Provision are here to help you in any way we can. Feel free to reach out to your contact at Provision for more details and clarifications. In the meantime, here are a few suggested steps to help you run your personal and business affairs: 

  • Reach out to your bank to discuss what loan deferrals options are available to you as a business and an individual
  • Reach out to your Provision contact to discuss what options are best in order to access corporate funds that you may need personally
  • If you need assistance filing ROEs for temporary lay-offs, please reach out to us and we can provide you information on our ROE filing service
  • Provide us with your personal income tax information as soon as possible to allow us to file your tax returns
      • While you do not need to pay taxes until August 3, filing early will help you get any refunds that may be owed to you
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