In response to the COVID-19 emergency, and its significant impact on the well-being of Canadian individuals, businesses, and other organizations alike, both the Canadian federal government, and Alberta government have introduced measures intended to assist Canadians in getting through this difficult time. Many of the measures are financial in nature and widely available. The purpose of this article is to summarize some of the many important benefits introduced to date and provide some guidance on what you need to do to ensure that you or your business are taking full advantage of the relief available.
Income Tax Filing and Payment Deadline Extensions
In order to provide administrative and financial relief to both individuals and businesses, the Canada Revenue Agency has announced the following filing and payment extensions:
- 2019 Individual Income Tax Return filing and payment deadline – Filing deadline extended to June 1, 2020 (remains June 15 for self-employed individuals);
- Individual tax payment deadline - Extended to September 30, 2020, including June 15, 2020 and September 15, 2020 installment payments;
- Corporate Income Tax Returns normally due after March 18, 2020 and before May 31st – Extended to June 1, 2020;
- Corporate Income Tax Returns normally due on May 31st, or in June, July, or August – Extended to September 1, 2020;
- Corporate Income Tax Payments due on or after March 18, 2020 – Extended to September 30, 2020;
- Other individual and business income tax filings due on or after March 18, 2020 including returns, elections, designations, and information requests – Extended to June 1, 2020.
- Trusts with a December 31, 2019 year-end – Extended to May 1, 2020.
- Trusts that would normally have a filing due date after March 30th and before May 31st – Extended to June 1, 2020;
- Trusts that would normally have a filing due date on May 31st, or in June, July, or August – Extended to September 1, 2020;
- Trust Income Tax payments due after March 18, 2020 – Extended to September 30, 2020.
- Filing of an objection due March 18, 2020 or later – Extended until June 30, 2020.
- Partnership Information Returns that would normally have a March 31 filing deadline – Extended to May 1, 2020.
- Partnership Information Returns that would normally have a filing deadline after March 31st and before May 31st, 2020 – Extended to June 1, 2020.
- Partnership Information Returns that would normally have a filing due date on May 31st, or in June, July, or August – Extended to September 1, 2020;
- Form T3010, Registered Charity Information Return due between March 18, 2020 and December 31, 2020 – Extended to December 31, 2020.
- GST/HST remittances – See “GST/HST Remittance Deferral” section below.
- NOTE - Payroll deductions payments and all related activities are excluded from the above exemptions and should be addressed based on their original applicable deadlines.
**Update - In a September 14, 2020 release, it was announced that the CRA has extended the payment due date for current year individual, corporate, and trust income tax returns, including instalment payments, from September 1, 2020, to September 30, 2020. Penalties and interest will not be charged if payments are made by the extended deadline of September 30, 2020. This includes the late-filing penalty as long as the return is filed by September 30, 2020.
Other CRA Administrative Relief
The CRA has announced that for the time being they will not initiate contact with taxpayers for audits (with certain exceptions). This includes no new audits being launched, no requests for information related to existing audits, and no audits finalized or reassessments issued.
Collections activities on new debts will also be suspended until further notice, and flexible payment arrangements will be available.
For additional details on the various administrative measures introduced by the CRA as part of its COVID-19 emergency relief measures visit www.canada.ca
GST/HST Remittance Deferral
To support Canadian businesses in the current extraordinary circumstances, the Minister of National Revenue will extend until June 30, 2020 the time that:
- Monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods;
- Quarterly filers have to remit amounts collected for the January 1, 2020 through March 31, 2020 reporting period; and
- Annual filers, whose GST/HST return or instalment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.
NOTE – As of the date of writing, there has been no announcement regarding an extension for GST/HST return filing deadlines, however, in recognizing the difficult circumstances faced by businesses, the CRA has commented that they won’t impose penalties where a return is filed late provided that it is filed by June 30th.
Canada Emergency Commercial Rent Assistance (CECRA)
On April 24th, Prime Minister, Justin Trudeau announced that the federal government has reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. This program will lower rent by 75 per cent for small businesses that have been affected by COVID-19.
To qualify for CECRA for small businesses, the commercial property owner must:
- own or be the landlord of the commercial real property* which is occupied by one or more impacted small business tenants
- enter (or have already entered) into a rent reduction agreement for the period of April, May and June 2020, reducing an impacted small business tenant’s rent by at least 75%
- ensure the rent reduction agreement with impacted tenants includes a moratorium on eviction for the period of April, May and June 2020
- have declared rental income on your tax return (personal or corporate) for tax years 2018 and/or 2019
Impacted small business tenants are businesses — including non-profit and charitable organizations that:
- pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement)
- generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level)
- have experienced at least a 70% decline in pre-COVID-19 revenues based on a comparison of average gross monthly revenues for the period of April to June 2020 to:
- Average gross monthly revenues from April to June 2019; or,
- If business was not operating during April to June 2019, average gross monthly revenues for January and February 2020.
The program is administered by CMHC on behalf of the Government of Canada and offers assistance for the months of April, May and June 2020.
- Property owners can apply later and the program will be applied retroactively.
- Property owners may still apply for assistance once the 3-month period has ended if they can prove eligibility during those months.
- Property owners must refund amounts paid by the small business tenant for the period.
The deadline to apply is August 31, 2020.
CMHC will provide forgivable loans to eligible commercial property owners. Funds will be transferred to the property owner’s financial institution.
- The loans will cover 50% of the monthly gross rent owed by impacted small business tenants during the 3-month period of April, May and June 2020.
- The property owner will be responsible for no less than half of the remaining 50% of the monthly gross rent payments (paying no less than 25% of the total).
- The small business tenant will be responsible for no more than half of the remaining 50% of the monthly gross rent payments (paying no more than 25% of the total).
CECRA for small businesses loans will be forgiven if the property owner complies with all applicable program terms and conditions — including to not recover forgiven rent amounts when the program is over.
UPDATE – July 1, 2020 - the CECRA website has been updated to include an extension of the program for July 2020. On July 31, 2020, the Department of Finance announced a further extension for August 2020. These extended periods are available only to landlords who have been approved for the previous April to June application period. Landlords who have not yet submitted an application for the previous April to June period must submit their initial application by August 31, 2020 in order to be eligible. All applicants approved for the program by August 31, 2020 who wish to apply for the July and August extensions must submit the “opt in” applications prior to September 14, 2020.
UPDATE - September 8, 2020 - The Department of Finance has announced that the program will be extended to include the month of September 2020. The CECRA website has also been updated to indicate that information about the September extension opt-in will be available soon. In addition, the deadline to submit a new application has been extended From August 31, 2020 to September 30, 2020.
For more information and a link to the application portal visit www.cmhc-schl.gc.ca
New Loan Guarantee and Co-Lending Program for Small and Medium Enterprises
For businesses that require additional liquidity support or who may not meet the eligibility requirements for the Canada Emergency Business account, additional measures have been introduced to help provide additional support for small and medium sized enterprises (SME’s).
In an effort to support the operations of SME’s and provide access to additional sources of operating cash flows, the EDC will guarantee new operating credit and cash flow term loans that financial institutions extend to SME’s up to $6.25 million. The program cap for this new loan program will be a total of $20 billion for export sector and domestic companies.
A new co-lending program has also been introduced with the intention of bringing the Business Development Bank of Canada (BDC) together with financial institutions to co-lend term loans to SME’s for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts up to $6.25 million, and BDC’s portion of this program is up to $5 million maximum per loan. The potential for lending for this program will be $20 billion.
For additional details on the deferral of GST/HST and new loan programs for businesses visit www.canada.ca
Increasing Credit Available to Farmers
The federal government has announced additional support to Farm Credit Canada by allowing an additional $5 billion in lending capacity to producers, agribusinesses, and food processors. This will offer increased flexibility to farmers who face cashflow issues and to processors who are impacted by lost sales, helping them remain financially strong during this difficult time.
For additional details of the increased farm credit lending capacity visit www.fcc-fac.ca
Canada Emergency Wage Subsidy (CEWS) for Employers
The Canada Emergency Wage Subsidy for Employers is intended to support businesses that are hardest hit by the COVID-19 pandemic and would help protect the jobs Canadians depend on during these difficult times. The initial legislation for this program was passed by Bill C-14 on April 11, 2020.
The CEWS is an additional subsidy to the previously announced 10% Temporary Emergency Wage Subsidy (TEWS). Employers will need to carefully consider their eligibility for each of these programs.
For more information on the CEWS and TEWS check out our detailed Guide to the Canada Emergency Wage Subsidy (CEWS) for Employers CEWS Guide
Alberta Relaunch Grant for Small and Medium Enterprises
This is a Provincial government initiative offering up to $5,000 in funding per business, for small or medium sized Alberta business impacted by COVID-19 in the months of April or May 2020.
Businesses, cooperatives and non-profit organizations that were ordered to close or curtail operations as a result of public health orders issued by Alberta’s Chief Medical Officer of Health may be eligible.
Applicants will be required to demonstrate a revenue reduction of at least 50% in April and/or May 2020 as a result of public health orders. Applicants who saw a 50% revenue reduction in both April and May 2020 can only submit one application.
To be eligible, an Alberta business must be one of the following legal entities as well as meet certain other criteria outlined for the program:
- corporation registered under the Business Corporations Act(Alberta)
- partnership registered under the Partnership Act (Alberta)
- sole proprietor with a trade name registered under the Partnership Act (Alberta)
- corporation incorporated under a special act or a private act of the Alberta legislature
- non-profit registered under a special act or a private act of the Alberta legislature
- non-profit registered under part 9 of the Companies Act (Alberta)
- society registered under the Societies Act (Alberta) or Agricultural Societies Act (Alberta)
- cooperative registered under the Cooperatives Act (Alberta)
For more information on eligibility and how to apply for this funding visit https://www.alberta.ca/sme-relaunch-grant.aspx#toc-4
Canada Summer Jobs Program
The Government has announced several temporary changes to the Canada Summer Jobs program that will allow for employers to:
- Receive an increased wage subsidy, so that private and public sector employers can also receive up to 100 per cent of the provincial or territorial minimum hourly wage for each employee;
- Extend the end date for employment to February 28, 2021;
- Adapt their projects and job activities;
- Hire staff on a part-time basis.
For more details on the Canada Summer Jobs Program visit www.canada.ca
Employment Insurance – Work Sharing Program
Work Sharing (WS) is a program that helps employers and employees avoid layoffs by providing EI benefits to eligible employees who agree to reduce their normal working hours and share the available work while their employer recovers. Work-Sharing is an agreement between employers, employees and the Government of Canada. The WS program was originally introduced to assist employers during the downturn in the forestry, steel, and aluminum industry. As a temporary special measure to support employers and workers affected by COVID-19, the program has been expanded and is no longer limited to one specific sector or industry. It is effective March 15, 2020 to March 14, 2021.
The WS program can help employers retain qualified and experienced workers and avoid recruiting and training new employees once business picks up again.
Employment Insurance – Sickness Benefits
Employment Insurance (EI) sickness benefits provide up to 15 weeks of income replacement and is available to eligible claimants who are unable to work because of illness, injury or quarantine, to allow them time to restore their health and return to work. Canadians quarantined can apply for Employment Insurance (EI) sickness benefits.
Service Canada has announced that in order to support Canadians affected by COVID-19 and placed in quarantine, the following actions will be taken:
- The one-week waiting period for EI sickness benefits will be waived for new claimants who are quarantined so they can be paid for the first week of their claim.
- Establishing a new dedicated toll-free phone number to support enquiries related to waiving the EI sickness benefits waiting period.
- People claiming EI sickness benefits due to quarantine will not have to provide a medical certificate.
- People who cannot complete their claim for EI sickness benefits due to quarantine may apply later and have their EI claim backdated to cover the period of delay.
For more details on the Work Sharing program, EI sickness benefits, and other Employment and Social Development Canada measures visit www.canada.ca
Canada Emergency Response Benefit (CERB)
The Canada Emergency Response Benefit (CERB) is a new temporary measure to assist individuals facing a loss of work. It is a taxable benefit of $2,000 every four weeks for up to 16 weeks, and is intended to support workers who have lost their income due to COVID-19.
For more information on the CERB visit our Guide to the Canada Emergency Response Benefit (CERB) CERB Guide
Canada Emergency Student Benefit
On April 29, 2020 the federal government released details for the proposed Canada Emergency Student Benefit (CESB). This proposed benefit for students who are not receiving the Canada Emergency Response Benefit would provide $1,250 per month for up to four months (May-August 2020). Students with disabilities, and students with dependents would receive an additional $750.
For more details on the CESB visit our detailed Guide to the Canada Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB) CESB Guide
Additional Relief Measures for Students
Additional relief measures for students proposed by the federal government include:
- Implement a moratorium on federal student loan repayments and interest until September 30, 2020. For more information on the suspension of student loan payments visit https://www.csnpe-nslsc.canada.ca/en/what-is-new
- Introduce the new Canada Student Service Grant for students who choose to do national service and serve their communities. The new Canada Student Service Grant will provide up to $5,000 for their education in the fall.
- Double the Canada Student Grants for all eligible full-time students to up to $6,000 and up to $3,600 for part-time students in 2020-21. The Canada Student Grants for Students with Permanent Disabilities and Students with Dependents would also be doubled.
- Broaden eligibility for student financial assistance by removing the expected student’s and spouse’s contributions in 2020-21.
- Enhance the Canada Student Loans Program by raising the maximum weekly amount that can be provided to a student in 2020-21 from $210 to $350.
- Increase existing distinctions-based support for First Nations, Inuit, and Métis Nation students pursuing post-secondary education.
- Extend expiring federal graduate research scholarships and postdoctoral fellowships, and supplement existing federal research grants, to support students and post-doctoral fellows.
For more information on relief measures available to students visit www.canada.ca
Workers’ Compensation Board – Deferral of Premiums
The Workers’ Compensation Board of Alberta (WCB) and the Government of Alberta have announced a new measure to assist private sector employers and mitigate the financial impacts of COVID-19.
Summary of the measures are as follows:
- All 2020 WCB Premiums will be deferred to 2021
- All 2020 WCB Premiums already paid will be refunded
- All 2020 WCB Premiums invoices and statements have been stopped
- Starting in 2021, the 2020 WCB Premiums will be invoiced and discounted by 50%
The 2020 discounted premiums will be calculated in February 2021, those premiums will be added to the 2021 estimated premiums and invoiced as done in the past.
Any small and medium sized private sector employers with $10 million or less in insurable earnings for 2020 will be eligible.
No actions by the employers is required. Refunds will be issued automatically.
For more information on these WCB measures, check out the WCB employer facts sheet at www.wcb.ab.ca
Additional Measures to Support Individuals and Families
- Increased Canada Child Benefit - An extra $300 per child to be provided through the Canada Child Benefit (CCB) for 2019-20. This benefit will be delivered as part of the scheduled CCB payment in May. Those who already receive the Canada Child Benefit do not need to re-apply.
- Reduced minimum withdrawal for Registered Retirement Income Funds (RRIF) – A reduction of the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.
- A moratorium on the repayment of Canada Student Loans - Effective March 30, there will be a six-month interest-free moratorium on the repayment of Canada Student Loans for all student loan borrowers. No payment will be required and interest will not accrue during this time. Students do not need to apply for the repayment pause.
For a complete list of federal government measures in response to COVID-19 visit www.canada.ca
Alberta Government Measures for Individuals
The Alberta government has also announced several financial measures in response to the COVID-19 emergency including the following:
- Protection for Renters – New protections in place for residential and mobile home tenants including protection from eviction for non-payment prior to May 1, 2020 and protection from rent increases or late payment fees.
- Vehicle License and Registration Services – Deferral of vehicle registration and driver’s license renewal deadlines (see below for details).
For a full list of government of public health and safety measures as well as service changes in response to COVID-19 visit https://www.alberta.ca/coronavirus-info-for-albertans.aspx
The information in this publication is current as of November 5, 2020.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Gregory, Harriman & Associates LLP to discuss these matters in the context of your particular circumstances. Gregory, Harriman & Associates LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.