COVID-19 Update: Federal and Ontario Economic Response Measure

·  Loan repayment by December 31, 2022 will result in 25% loan forgiveness up to $10,000.

·  Export Development Canada (EDC) to guarantee up to $20 billion in new operating credit and cash flow term loans issued by financial institutions to SMEs. Each loan is capped at $6.25 million with EDC guaranteeing 80% of each loan. Loans are due within one year.

·  Business Development Bank of Canada (BDC) will issue incremental credit to eligible SMEs of up to $6.25 million per eligible SME, jointly with financial institutions with BDC taking on 80% of the risk. This co-lending arrangement will make up to $20 billion of financing available to SMEs.

·  Between the EDC and BDC lending programs, eligible SMEs can access up to $12.5 million in credit facilities.

·  CRA will not contact any SMEs to initiate post-assessment GST/HST or income tax audits for the next 4 weeks.

·  Increasing the Employer Health Tax (EHT) exemption from $490,000 to $1 million for 2020, retroactive to January 1.

·  The subsidy will be 75% of the first $58,700 earned per employee. This equates to a subsidy of $847/week per employee.

·  Available to all employers facing a revenue decline of 30% or more.

·  Deferral[i] until September 1, 2020 payment of any income tax amounts that become owing on or after March 18, 2020 and before September 1, 2020.  Relief applies to tax balances due and instalments under Part I of the Income Tax Act.  No interest or penalties will accumulate on these amounts during this period if paid by September 1, 2020.[ii]

·  Deferral of all GST/HST payments until June 2020.[iii]

·  Extension of the EI Work Sharing Program (EIWSP) from 38 to 76 weeks for businesses affected by COVID-19 related downturn in business and for companies in the forestry, steel and aluminum sectors.

Ø EHT;
Ø Fuel and gas tax;
Ø International fuel tax;
Ø Tobacco tax;
Ø Wine and spirits tax;
Ø Mining tax;
Ø Insurance premium tax;
Ø Retail sales tax; and
Ø Race tracks tax.

·  Deferral of WSIB payments for up to 6 months.

·  Introducing the Regional Opportunities Investment Tax Credit (ROITC), a 10% refundable tax credit for investments in capital property that:

Ø are made by a Canadian-controlled private corporations (CCPCs) that build, renovate or acquire commercial and industrial buildings that are either Class 1 or Class 6 assets[v] for capital cost allowance purposes;

Ø have a cost between $50,000 to $500,000; and

Ø are available for use on or after March 25, 2020 in a designated Ontario region.[vi]

·  Suspension of audit interactions with most businesses and their representatives during April 2020.

·  The subsidy will be 75% of the first $58,700 earned per employee. This equates to a subsidy of $847/week per employee.

·  Available to all charities and NPOs facing a revenue decline of 30% or more.

·  Canada Emergency Business Account (CEBA) to provide $25 billion in funding to financial institutions to provide interest-free lines of credit of up to $40,000.  CEBA loans are available to employers with 2019 total payroll between $50,000 to $1 million.

·  Loan repayment by December 31, 2022 will result in 25% loan forgiveness up to $10,000.

·  Filing deadline for charity returns extended to December 31, 2020.

·  Charities Directorate has suspended all operations until further notice, including call centres, registration and audit activities.

·  Waiving requirement to have a medical certificate to access EI sickness benefits.

·  Canada Emergency Response Benefit (CERB)[vii].  The CERB provides a $2,000 monthly taxable benefit, up to 4 months. The following are eligible:

Ø  workers who cannot work due to COVID-19 without access to paid leave or other support;

Ø  workers who are quarantined, sick with COVID-19 or caring for family members sick with COVID-19;

Ø  working parents who must stay home with children due to school or daycare closures;

Ø  workers who remain employed but unpaid due to lack of work; and

Ø  self-employed individuals.[viii]

Ø  workers who cannot work due to COVID-19 without access to paid leave or other support;

Ø  workers who are quarantined, sick with COVID-19 or caring for family members sick with COVID-19;

Ø  working parents who must stay home with children due to school or daycare closures;

Ø  workers who remain employed but unpaid due to lack of work; and

Ø  self-employed individuals and contractors.

·  EI Work Sharing Program (EIWSP) to provide EI benefits for up to 76 weeks to workers who agree to reduce their working hours.

·  Increasing the Canada Child Benefit (CCB) maximum by $300 per child and paying the increase as a one-time payment in May 2020.

·  Canada Emergency Response Benefit (CERB).  The CERB provides a $2,000 monthly taxable benefit, up to 4 months. The following are eligible:

Ø  workers who cannot work due to COVID-19 without access to paid leave or other support;

Ø  workers who are quarantined, sick with COVID-19 or caring for family members sick with COVID-19;

Ø  working parents who must stay home with children due to school or daycare closures;

Ø  workers who remain employed but unpaid due to lack of work; and

Ø  self-employed individuals.[x]

·  $9 million expansion in energy bill support to families eligible for the Low-income Energy Assistance Program (LEAP).

·  Subsidized delivery of meals, medicines and other essentials.

·  CRA will defer, until September 1, 2020, payment of any income tax amounts that become owing on or after March 18, 2020 and before September 1, 2020.  Relief applies to tax balances due and tax instalments under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.

·  Deferral of personal tax instalments due June 15 to September 15, 2020.

·  Tax filing deadline extended from April 30, 2020 to June 1, 2020.[xi]

·  If self-employed, deferral of all GST/HST pay-ments until June 2020.[xii]

·  Hydro rates reduced to “off-peak” rates for 24 hours/day for 45 days for consumers.