The Latest on Federal Government COVID-19 Financial Relief Plan

March 18, 2020

In order to keep you up to date on the Federal Governments’ response to the economic effects of COVID-19 we have summarized some of the announcements made by the Government of Canada today. We will continue to update you as we receive information.

New emergency care benefits

Ottawa is waiving the one-week waiting period to claim employment insurance sickness benefits. The government is also proposing a new emergency care benefit of up to $900 every two weeks for up to 15 weeks to help workers who are quarantined or sick with COVID-19 or taking take of a sick family member, but do not qualify for employment insurance sickness benefits. The new benefit will also be available for parents who can’t earn employment income because they need to care for children, whether or not the parents qualify for employment insurance.

More information about applying for EI sickness benefits is available here: https://www.canada.ca/en/services/benefits/ei/ei-sickness/apply.html

Special One-Time GSTC and CCB Payments

The government is moving to make a special one-time payment to those who receive the goods and services tax credit that will double the maximum annual payment amounts for the 2019-20 benefit year.

The Government is proposing to provide a one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC). This will double the maximum annual GSTC payment amounts for the 2019-20 benefit year. The average boost to income for those benefitting from this measure will be close to $400 for single individuals and close to $600 for couples. This measure will inject $5.5 billion into the economy.

The Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child. The overall increase for families receiving CCB will be approximately $550 on average; these families will receive an extra $300 per child as part of their May payment. In total, this measure will deliver almost $2 billion in extra support.

Together, the proposed enhancements of the GSTC and CCB will give a single parent with two children and low to modest income nearly $1,500 in additional short-term support.

Reduction to RRIF Minimum Withdrawal Limits

Reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors’ retirement savings. This will provide flexibility to seniors that are concerned that they may be required 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.

CRA Deadlines

For individuals, the return filing due date will be deferred until June 1, 2020.  However, the Agency encourages individuals who expect to receive benefits under the GSTC or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.

The Canada Revenue Agency will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020.  This relief would apply to tax balances due, as well as installments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.

The Canada Revenue Agency 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.

Wage subsidies for businesses

To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months.

The subsidy will be equal to 10% of the remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.

Businesses will 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.