Last updated April 2, 2020. We will update blog posts when more information is released.
On March 18, 2020, Prime Minister Justin Trudeau announced the government is introducing an economic aid package to help Canadians and businesses cope with the COVID-19 pandemic.
The package provides up to $27 billion in direct supports to workers and businesses, and $55 billion to meet liquidity needs of Canadian businesses and households through tax deferrals.
We provide an overview of the proposed measures that impact self-employed individuals and small businesses.
Temporary income support
The government is waiving the 1-week waiting period to claim Employment Insurance (EI) sickness benefits. This temporary measure is in effect as of March 15, 2020.
The government is also priority processing EI sickness claims for people under quarantine. They’re also waiving the medical certificate requirement to access EI sickness benefits.
For workers who must stay home and don't have access to paid sick leave, they're introducing the Canada Emergency Response Benefit.
Read our blog post: federal government updates EI support benefit.
The benefit will provide $2,000 a month for the next four months to workers who have lost their income due to COVID-19.
The CRA will administer the flat-payment benefit and provide support to:
- Self-employed individuals who are sick, quarantined or have been directed to self-isolate but don't qualify for EI sickness benefits
- Self-employed individuals who are taking care of a family member sick with COVID-19, such as an elderly parent or dependents, but do not qualify for EI sickness benefits
- Working parents who must stay home without pay because of sick children or who need care because of school closures, whether they qualify for EI or not
Applications for the benefit will be open in April 2020.
Canadians will be able to apply for the benefit through:
- CRA MyAccount
- My Service Canada account
- By calling a toll-free number
EI Work Sharing Program
The government is implementing the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers.
The program will extend the eligibility of such agreements to 76 weeks, ease eligibility requirements, and streamline the application process.
Individual and trust tax filing deadline deferred
The CRA is deferring the tax filing deadline for individuals until June 1, 2020.
If you expect to receive benefits under the GST credit or the Canada Child Benefit, don't delay the filing of your return.
That way you ensure your entitlements for the 2020-21 benefit year are properly determined.
If an individual return is filed after June 1, 2020, then CRA will consider the return late. That means if payment for the late filed return is not received by September 1, 2020, late filing penalties will apply.
Corporate filing deadlines remain unchanged.
Audit interaction suspended in some cases
For the next 4 weeks, the CRA will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits.
They will temporarily suspend audit interaction with taxpayers and representatives for most businesses.
Goods and Services Tax credit
The government is proposing to provide a one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC).
This would double the maximum annual GSTC payment amounts for the 2019-20 benefit year.
The government estimates the average boost will be about $400 for single individuals and about $600 for couples.
Canada Child Benefit
The government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts for the 2019-20 benefit year.
Families would receive an extra $300 per child as part of their May payment.
Effective immediately, the CRA will recognize electronic signatures as having met the signature requirements of the Income Tax Act.
This is a temporary administrative measure. This provision applies to authorization forms T183 or T183CORP.
Millions of Canadians sign these forms in person every year to authorize tax preparers to file taxes.
Changes to RRIFs
The government is proposing to reduce the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on seniors’ retirement savings.
This would provide flexibility to seniors concerned they may have to liquidate their RRIF assets to meet minimum withdrawal requirements.
Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.
Small business support
The government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy would be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
Businesses would be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration.
Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
More credit available to businesses and farms The Business Development Bank of Canada (BDC) and Export Development Canada (EDC) will provide more than $10 billion of additional support to small and medium-sized businesses that are facing a cash crunch.
The near term credit available to farmers and the agri-food sector will also be increased through Farm Credit Canada.
RELATED: What your small business needs to know about COVID-19.
Disclaimer: The material above is provided for educational and informational purposes only.