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Mar 20, 2020

Government of Canada’s Response to COVID-19 Coronavirus

If you’re currently doing business in Canada and you’re not a delivery driver, medical professional, own a grocery store or produce toilet paper, you’re likely in a similar situation to Octopus Creative as well as many other companies in both the B2C and B2B sectors.

Full disclosure, it’s hard right now. REALLY hard.

But we’re all in this together right? May as well make the most of this as best as we can to coast through these very troubling economic and pandemic situations.

Recently, we received an email from our accountant Ryan Hoult of Rice & Co LLP who compiled a fantastic summary of resources from the recent announcements that the Government of Canada and Province of Alberta has provided for relief to small businesses.

The details below have been directly quoted from their email with their permission:

The Government of Canada has announced help for Canadians during the COVID-19 outbreak. In an effort to help you and your business we’ve compiled the below list of the key programs and waiver, as well as a brief summary of each. 

1. Tax Filing Deadline Extension:

  • Individual Tax Return (T1) deadline for regular filers is extended to June 1. If you have business income on your T1 you deadline is still June 15.
  • Trust Tax Returns (T3) with a taxation year ending December 31, 2019, will be extended to May 1, 2020

2. Tax payment holiday (All TAXPAYERS – individuals, trusts and corporations):

  • All income taxes that become due between March 18, 2020, and August 31, 2020, are not payable until September 1, 2020
  • Alberta has announced an identical deferral for corporate income tax
  • No interest or penalties will accrue during this time.
  • This includes:
    • Income Tax due upon filing
    • Instalments
  • At this time, the following are NOT included:
    • Amounts owing from before March 18, 2020
    • GST/HST due upon filing or instalments
    • Payroll remittances
    • Part XIII withholding taxes

3. Electronic Signatures are allowed on a temporary basis for personal and corporate tax returns.

In order to reduce the amount of face-to-face meetings and document handling, the CRA will be accepting electronic signatures for certain tax forms. The CRA had announced a desire earlier this year to change this rule permanently, so we’re very hopeful that this could be the end of the physical signature requirement.

4. Private Company Business Measures:

  • 10% wage subsidy, up to $1,375 / employee or $25,000 / employer. In place for 3 months and accessed by reducing payroll withholding remittances. We are awaiting a detailed description of how this should be done.
  • No GST/HST post-assessment reviews or business audits for the next 4-weeks (ending April 15th)
  • Most CRA Audit interaction will be temporarily suspended
  • The exceptions are likely to be audits where a statutory deadline is approaching
  • $10 Billion in emergency business loans (see below)
  • No announcement of GST payment or filing deadline extensions
  • No announcement of corporate income tax filing extensions

5. Financial Support for Entrepreneurs impacted by the COVID-19 from the Government of Canada via BDC:

6. Federal Government Support for Individuals:

  • Temporary Income Support for Workers and Parents
    • Reduce EI waiting period for claiming sick benefits
    • Emergency Care Benefit, up to $900 a week, administered by CRA
    • Applications accepted via CRA starting in April
  • Longer-Term Income Support for Workers
    • Emergency Support Benefit for unemployed individuals not eligible for EI
    • Applications accepted via CRA starting in April
    • Expansion of the EI Work Sharing Program to encourage broader use
  • Income Support for Individuals who Need it Most
    • Increase to Canada Child Tax Benefits (up to $300 / year / child) for 19/20
    • Double GST/HST credit for 19/20
    • The increased payments will be paid in a lump sum in May 2020
    • A reminder that 2020/2021 benefit payments (July 2020-June 2021) require you to file your 2019 personal tax return.

7. Mortgage Payment Protection: The Canada Mortgage and Housing Corporation (CMHC) is working with lenders to help people who have trouble paying their mortgage. This might include:

  • Deferred mortgage payments
  • Capitalization of interest
  • Special payment arrangements

These benefits are coordinated with your mortgage lender. If you are under financial stress, reach out to your lender to discuss options.

8. Emergency Financial Assistance: The Alberta Emergency Financial Assistance program can help you during unexpected emergencies. This allowance can cover costs for:

  • food
  • clothing
  • child care
  • transportation
  • damage deposit
  • temporary accommodation
  • utility arrears (repayable if you need help with utility arrears more than once)
  • eviction payments (you must repay this money if you need help with eviction payments more than once)

9. Rules around temporary layoffs in Alberta:

The Government of Canada has also posted a toolkit for private businesses here.

The details of this blog were sourced from Government of Canada website and Province of Alberta website. If you have any further questions, please feel free to contact Ryan Hoult at Rice & Co LLP or your own accountant for further details.