In a press conference on March 18, 2020, Minister of Finance Bill Morneau announced a new set of economic measures, including tax measures, as part of the Government of Canada's COVID-19 Economic Response Plan. The economic stimulus package will provide $27 billion in direct support to Canadian workers and businesses, and $55 billion through tax deferrals intended to provide liquidity to Canadian businesses and households and stabilize the Canadian economy.

A summary of the key tax measures is set out below.

Extension of Tax Filing Deadlines

  • The tax return filing deadlines for individuals (including certain trusts) are extended to June 1, 2020.
  • The tax return filing deadlines for trusts with a December 31, 2019 year end are extended to May 1, 2020.
  • At this time, no extensions of income tax return filing deadlines for other taxpayers have been announced.

Income Tax Deferral

  • All taxpayers are entitled to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020, and before September 2020.
  • This deferral is applicable to tax balances and instalments, and no interest or penalties will accumulate on these amounts during this period.

Suspension of Canada Revenue Agency Audit Activity

  • The Canada Revenue Agency (the CRA) will not contact any small or medium (SME) businesses (i.e., with fewer than 500 employees) to initiate any post assessment income tax or GST/HST audits for the next four weeks.
  • The CRA will temporarily suspend audit interaction with taxpayers and representatives for the vast majority of businesses.

Administrative Relief

  • As a temporary administrative measure, the CRA will recognize authorization forms with electronic signatures as having satisfied the signature requirements of the Income Tax Act. This applies to authorization forms T183 and T183CORP, which authorize tax preparers to electronically file tax returns.

Additional Support for Significantly Impacted Sectors

  • The Federal Government, together with the Business Development Bank of Canada and Export Development Canada, are working to develop additional tools to assist more significantly impacted sectors, such as oil and gas, air transportation and tourism. Additional details are expected to be announced in the coming days.

Certain of the relief and business liquidity measures will be effective immediately, while others require legislative change and may be delayed until early April. Parliament will be recalled in order to pass the legislation required to enact these measures.

Additional resources related to the impact of the COVID-19 pandemic can be found here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.