FEDERAL COVID-19 ECONOMIC RESPONSE PLAN
27 billion in direct support to Canadian workers and businesses.
Temporary Income Support for Workers and Parents
For Canadian without paid sick leave who are sick, quarantined or forced to stay home to care for children:
● Waiving one-week waiting period for those in quarantine that claim EI – effect as of March 15, 2020.
● Waiving requirement to provide a medical certificate to access EI sickness.
● Emergency Care Benefit provides $900 bi-weekly, for up to 15 weeks. Administered through the CRA and provide income support to:
◌ workers, including self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits
◌ workers, including self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not qualify for EI sickness benefits.
◌ Parents with children who require care of supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.
Application for the Benefit will be available April 2020 and require Canadians to attest that they meet eligibility requirements. They will need to re-attest every two weeks to reconfirm eligibility. Applicants will sect one of three channels to apply for the benefit:
1. Accessing on their CRA MyAccount secure portal;
2. Accessing it from secure My Service Canada Account; or
3. Calling a toll-free number equipped with automated application process (number not provided yet).
Longer-Term Income Support for Workers
For Canadian who lose jobs or face reduced hours as a result of COVID’s impact:
● Emergency Support Benefit delivered through the CRA to provide up to 5 billion in support to workers who are not eligible for EI and who are facing unemployment.
● EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process. Announced on March 11, 2020
Income Support for Individuals who need it most
For 12 million low and modest income families there will be a one-time special payment by early May 2020 through GST. This will double the maximum annual GSTC payment for 2019-20 benefit year. Average boost will be close to $400 for single individuals and close to $600 for couples.
For 3.5 million families with children, the maximum annual CCB payment for 2019-20 benefit year will be increased by $300 per child. Overall increase will be approximately $550 on average. These families will received an $300 per child as part of their May payment.
Together, the proposed GSTC and CCB will give a single parent with two children and low to modes income nearly $1,500 in additional short term support.so
Targeted help to vulnerable:
● Indigenous Community support
● A 6-month interest free moratorium on the repayment of student loans
● Reducing minimum withdrawals from RRIF by 25% for 2020
● Reaching Home initiative to support people experience homelessness during COVID 19 outbreak.
● Support of women and children fleeing violence
Flexibility for Taxpayers
CRA will defer the filing due date for the 2019 tax returns of individuals, including certain trusts.
● For individuals (other than trusts) the return filing 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 2020-2021 benefit year are properly determined.
● For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.
The CRA will allow all taxpayers 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 applies to tax balances due, as well as instalment, under Part 1 of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
CRA will recognize electronic signatures as having met the signature requirements of the Income Tax act, as a temporary administrative measure. This provision applies to T183 or T183CORP, which are forms that are signed in person by millions of Canadians every year to authorize tax preparers to file taxes.
Role of Financial Institutions
The Minister of Finance is encouraging the heads of Canada’s largest banks to show flexibility in helping customers whose personal or business finances are affected by COVID-19.
In response the banks in Canada have affirmed their commitment to working with customers to provide flexible solutions, on a case by case basis, for managing through hardships caused by recent developments. This includes pay disruption, childcare disruption, or illness. Canada’s large banks have confirmed that this support will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products.
CMHC and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty. These include payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.
SUPPORT FOR BUSINESS
On March 2020, Minister of Finance coordinated package of measures to support the functioning of markets, the resilience of our financial sector, and continued access to financing for Canadian business. This will significantly increase the availability of credit to businesses of all sizes, sustain liquidity in key financial markets, and provide flexibility to business experiencing hardship.
Supporting Canadian Business through the Canada Account
The government is changing the Canada Account so that the Minister of Finance would now be able to determine the limit of the Canada Account in order to deal with exceptional circumstances. The Canada Account is administered by Export Development Canada (EDC) and is used by the government to support exporters when deemed to be in the national interest. This will allow government to provide additional support to Canadian companies through loans, guarantees or insurance policies during these challenging times.
Helping Businesses Keep their Workers
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 benefitting from this measure will include corporations’ eligible for the small business deduction, as well as non-profit organization and charities.
Flexibility for Businesses Filing Taxes
The CRA 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 instalments, under Part 1 of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
The 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. For the vase majority of businesses, the CRA will temporarily suspend audit interaction with taxpayers and representatives.
The Liaison Officers service offers help to owners or small businesses to understand their tax obligations.
Ensuring Businesses Have Access to Credit
The Business Credit Availability Program (BCAP) will allow Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and medium sized businesses. This will help viable Canadian businesses to remain resilient during these uncertain times. BDC and EDC are cooperating with private sector lenders to coordinate on credit solutions for individual businesses.