Government of Canada’s Economic Response to COVID-19

On March 18, 2020, the Government of Canada announced several economic measures to assist individuals and businesses during these challenging times. These measures include the following:

• Temporary income support for workers and parents;
• Longer-term income support for workers;
• One-time special payment through the Goods and Service Tax (GST) credit for low and modest income families;
• Increase to the maximum annual Canada Child Benefit for the 2019-2020 benefit year, by $300 per child;
• Six-month interest free moratorium on the repayment of Canada Student Loans;
• Reducing the required minimum from Registered Retirement Income Funds by 25% for 2020;
• For tax filings for individuals (other than trusts), the return filing due date will be deferred from April 30, 2020 to June 1, 2020. However, individuals who expect to receive a refund or benefits under the GST or the Canada Child Benefit should not delay the filing of their return;
• Tax filing for trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020;
• The Canada Revenue Agency will allow all taxpayers 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 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. Please note that this does not apply to GST/HST or payroll taxes;
• In order 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 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;
• 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 March 18, 2020, 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. For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives;
• Ensuring businesses have access to credit by allowing the Business Development Bank of Canada and Export Development Canada to provide more than $ 10 billion of additional support.

For more detail on this announcement, please see https://www.canada.ca/en/department-finance/news/2020/03/canadas-covid-19-economic-response-plan-support-for-canadians-and-businesses.html

Please note that a majority of these measures require Royal Assent.