As part of a new $82 billion spending package, the federal government today announced that approximately $27 billion would be directed to support for employers and employees affected by the COVID-19 situation. Parliament could be recalled as early as next week in order to enact legislation giving effect to these fiscal measures. The full text of the initiatives can be accessed here.
Highlights of the initiatives include the following:
- Temporary Wage Subsidy: Corporations eligible for the small business deduction, as well as non-profit organizations and charities that are facing revenue losses or lay-offs, are to be provided with a temporary wage subsidy equal to 10% of remuneration paid, up to a maximum subsidy of $1,375 per employee and $25,000 per employer, for a period of three months.
- Tax Filings: Businesses will be allowed to defer, until after August 31, 2020, the payment of any income tax amounts (including tax balances due and instalment payments) that become owing on or after today and before September 2020. No interest or penalties will accumulate on these amounts during this period.
- Tax Assessments: For the next four weeks, CRA will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks and will temporarily suspend audit interaction with taxpayers and representatives for most businesses.
- Business Credit Availability Program (BCAP): The Business Development Bank of Canada (BDC) and Export Development Canada (EDC) will be able to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses to help them remain resilient. There will also be cooperation with private sector lenders to coordinate on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation and tourism.
- The Canada Account: The government is changing the Canada Account so that the government is able to provide additional support to Canadian companies through loans, guarantees or insurance policies during these challenging times.
- Assistance for workers without paid sick leave: For those who are sick, quarantined or taking care of children or a family member as a result of COVID-19, the one-week waiting period to claim EI benefits is waived, as is the requirement to provide a medical certificate. Also, in April applications for the Emergency Care Benefit will be available, which is intended to provide income support of up to $900 bi-weekly for up to 15 weeks.
- Longer term income
- Emergency Support Benefit: For workers who lose their jobs due to the impact of COVID-19 and are not eligible for EI, this benefit will provide support of up to $5 billion.
- EI Work Sharing Program: As announced on March 11, there have been temporary changes to the EI Work Sharing Program (which provides EI benefits to workers who agree to reduce their normal hours as a result of developments beyond the control of employers, described in detail here) including extending eligibility of agreements up to a maximum of 76 weeks, as well as simplifying the application process and easing eligibility requirements.
The measures also include a reduction to the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020; enhancement of the GST Credit for low-income Canadians; $305 million for an Indigenous Community Support Fund; an interest-free moratorium on Canada Student Loan repayment; and an enhancement of the Canada Child Benefit.
As it currently stands, we are waiting on further information from the Government with respect to how to participate in these aid packages.
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