While the world faces one of the toughest medical crises we’ve seen in our generation, many of us are feeling the economic impact of the measures that need to be taken in order to stop the spread of COVID-19 (coronavirus).
To help Canadians through the economic crisis, the Canadian government has released an Economic Response Plan which outlines a number of ways that they’ll provide economic support to both Canadian businesses and individuals.
As new developments unfold, we’ll continue to update this post. You can also view more details on the official site here.
Below is a short summary of the support available:
Wage subsidy: The federal government will be providing a temporary wage subsidy to small businesses up to 10% for 3 months to a maximum of $1,375 per employee and $25,000 per employer. This wage subsidy is designed to help keep Canadians employed rather than having employers lay off staff. Your business is eligible for the wage subsidy if you employ one or more employees; have as of March 18, 2020 a CRA payroll number; and you’re one of the following structures: Canadian Controller Private Corporation, sole proprietorship, partnership, not-for-profit, or a registered charity. Keep in mind that there are some specific conditions depending on your tax structure so best to check out the CRA official site here or have a look at the Act itself here for more details. Once you calculate the subsidy that you’re eligible for you can reduce your payroll remittances by the amount of the subsidy until the full amount is received, keeping in mind that the CPP and EI contributions cannot be reduced.
Income tax payments and CRA deadlines: All income tax payments, both corporate and individual, have been deferred until August 31, 2020 meaning no corporate or personal instalments or year end payments that would have been due between today and August 31 will need to be paid. The idea behind this measure is to help ease cash flow concerns for individuals and businesses over the few months. Keep in mind that this relates to income tax payments only but sales tax and other taxes will continue on their normal schedule for now. The personal tax filing (T1) deadline has also been extended to June 1 and the trust filing (T3) deadline has been extended until May 1, 2020.
CRA audits: The CRA will not conduct any GST or income tax audits for the next 4 weeks (until mid April).
Bridge financing: 10 billion dollars of credit support has been provided to BDC to help with bridge financing during this time. You can speak directly to a BDC representative for details on the financing options available to you.
Employment insurance: For employees who are required to miss work due to symptoms or taking care of family members, the federal government announced an ‘Emergency Care Benefit’ equal to EI (employment insurance) for people who are ill, experiencing symptoms that result in missing work or have to take time off to take care of family members but fail to qualify for EI. This benefit will provide up to $900 every 2 weeks up to 15 weeks. People can apply online at home and receive payments via direct deposit with no medical documentation required, just an attestation. This benefit is meant to begin in early April. If you lose your job and don’t qualify for EI, an additional emergency support benefit will be available to allow individuals to receive benefits similar to EI.
GST/HST credit: Canadians who qualify for the GST/HST credit will see an increase where single adults can receive on average $400/month and married couples on average $600/month starting in May.
Canadian Child Benefit: For those with children, the federal government will be boosting the Canadian Child Benefit temporarily by $300 per child resulting in an overall increase of approximately $550 per family also starting in May.
Student loans: There has been a 6 month interest free moratorium on Canadian federal student loans.
RRIF withdrawal amount: For seniors, the government has reduced the minimum RRIF withdrawal amount by 25% to allow seniors to maintain capital where possible. OAS and GIS payments will not be impacted and will continue without any interruptions.
Mortgage payments: Major banks as well as CMHC (Canada Mortgage and Housing Corporation) have provided mortgage protection to assist with mortgage deferral up to 6 months as well as relief on auto loans and credit card payments. Individuals are encouraged to speak with their banks for more information on this.
Stay safe and healthy.