For the 2020 tax year, the Canada Revenue Agency (CRA) has introduced additional reporting for the T4 slip, Statement of Remuneration Paid, for all employers. The new reporting will help CRA validate payments under the Canada Emergency Wage Subsidy, the Canada Emergency Response Benefit, and the Canada Emergency Student Benefit.
The Canada Emergency Response Benefit (CERB) has now ended. The CRA is continuing to accept and process retroactive applications for period 7 (August 30 to September 26, 2020). You can continue to apply retroactively for this period only through the CRA’s My Account or automated toll-free phone line.
- More information is available in “Answers to your questions on paying back the Canada Emergency Response Benefit (CERB)”, prepared by the Government of Canada.
The Government of Canada has announced changes to the Employment Insurance (EI) program and new recovery benefits that will better support Canadians (see section about New Benefits).
For those who have been unable to work due to COVID-19 and are applying to receive the CERB retroactively, the CERB will provide a taxable benefit of $2,000 every 4 weeks for up to 28 weeks. Individuals available for this benefit include those earning less than $1,000/month, those whose EI benefits ran out in January 2020, and seasonal workers who do not have work to return to.
- Helpful information is available in “New Canada Recovery Benefits – What to expect”, prepared by the Government of Canada.
How to apply: Applications can now be made using “My Account” or via an automated telephone line or via a toll-free number. CERB payments should be received within 10 days of application. The CERB will be paid every four weeks and be available from March 15 to October 3, 2020.
Fraud alert: Beware of text messages that claim to be depositing funds from the CERB. These text messages are not legitimate and recipients are urged not to reply to these messages or click on links. Find out how you can further protect yourself from scams.
If you were receiving CERB, you may be eligible for one of the new recovery benefits retroactive to September 27, 2020 and available until September 25, 2021.
- The Canada Recovery Benefit (CBR) will provide eligible workers with $500 per week (taxable, tax deducted at source) for up to 26 weeks for those who have stopped working and who are not eligible for EI, or had their employment/self-employment income reduced by at least 50% due to COVID-19.
- This benefit will be paid in two-week periods. The CRB is administered by the Canada Revenue Agency (CRA).
- If you are eligible for the CRB, you can receive $1,000 ($900 after taxes withheld) for a 2-week period. If your situation continues past 2 weeks, you will need to apply again. You may apply up to a total of 13 eligibility periods (26 weeks) between September 27, 2020 and September 25, 2021.
- The CRB application process is not yet open.
- The Canada Recovery Sickness Benefit (CRSB) will provide $500 per week (taxable, tax deducted at source) for up to a maximum of two weeks, for workers who are unable to work for at least 50% of the week because they contracted COVID-19, self-isolated for reasons related to COVID-19, or have underlying conditions, are undergoing treatments or have contracted other sicknesses that, in the opinion of a medical practitioner, nurse practitioner, person in authority, government or public health authority, would make them more susceptible to COVID-19.
- This benefit will be paid in one-week periods. The CRSB is administered by the Canada Revenue Agency (CRA).
- If you're eligible for the CRSB, you can receive $500 ($450 after taxes withheld) for a 1-week period.If your situation continues past 1 week, you will need to apply again. You may apply up to a total of 2 weeks between September 27, 2020 and September 25, 2021.
- The CRSB application process has not yet opened.
- The Canada Recovery Caregiving Benefit (CRCB) will provide $500 per week (taxable, tax deducted at source) for up to 26 weeks per household for workers unable to work for at least 50% of the week because they must care for a child under the age of 12 or family member because schools, day-cares or care facilities are closed due to COVID-19, or because the child or family member is sick and/or required to quarantine or is at high risk of serious health implications because of COVID-19
- This benefit will be paid in one-week periods. The CRCB is administered by the Canada Revenue Agency (CRA).
- If you're eligible for the CRCB, your household can receive $500 ($450 after taxes withheld) for each 1-week period.If your situation continues past 1 week, you will need to apply again. You may apply up to a total of 26 weeks between September 27, 2020 and September 25, 2021.
- The CRCB application process has not yet opened.
Waivers for the Employment Insurance program related to COVID-19 include:
- The one-week waiting period for EI sickness benefits will be waived for new claimants due to Covid-19 and the requirement to provide a medical certificate will be waived.
- How to apply: Visit the Employment Insurance section of Employment and Social Development Canada.
Record of Employment
- When completing Record of Employment forms due to COVID-19 situations, new code categories should be used. For details visit the Employment Insurance-Record of Employment section of Employment and Social Development Canada.
- The SUB is an existing plan that allows employers to “top-up” employees’ EI Benefits without penalty to the employee (i.e. additional income does not reduce EI benefits). The plan is available when employees are unemployed due to a temporary stoppage of work, training, illness, injury, or quarantine. SUB plans must be registered with Service Canada before they go into effect.
- This program helps employers and employees avoid layoffs when groups of employees with similar jobs all reduce their hours by the same percentage to avoid lay-offs. Employees’ reduction can be 10%-60%. Due to COVID-19, the maximum duration has been extended from 38 to 76 weeks. Employees can apply for EI benefits for workdays lost due to the work share reduction.
- This benefit will provide $400 per week for up to 26 weeks, to workers who are self-employed
or are not eligible for EI and who still require income support and who are available and looking for work. This benefit will support Canadians whose income has dropped or not returned due to Covid-19.
- This benefit will provide $500 per week for up to two weeks, for workers who are sick or must self-isolate for reasons related to Covid-19
- This benefit will provide $500 per week for up to 26 weeks per household, for eligible Canadians unable to work because they must care for (1) a child under age 12 due to the closure of schools/daycare because of Covid-19, (2) a family member with a disability or a dependent because their day program or care facility is closed due to Covid-19, (3) a child, family member with a disability, or a dependent who is not attending school, daycare, or other care facilities under the advice of a medical professional due to being at high-risk if they contract Covid-19.
To ease financial hardship on businesses and to keep employees connected with their jobs during the COVID-19 pandemic, the BC government has extended the temporary layoff period to 16 weeks for COVID-19 related reasons. This aligns with federal benefit programs and other province’s measures. Employers are also able to request an extension through section 72 for a longer period than 16 weeks on application to the Employment Standards Branch.
To ensure that the most vulnerable population continues to receive their benefits when they need them the most, the CRA has extended benefit payments until the end of September for those who were unable to file their 2019 tax return on time. For individuals who already receive the Canada Child Benefit, the GST/HST credit, or both; their estimated payments will be based on the information from their 2018 tax return. This also applies to temporarily extending GIS and Allowance payments, if seniors’ 2019 income information have not been assessed.
If the 2019 tax return has not been filed in time for it to be assessed by early September 2020, the estimated benefits and/or credits will stop in October 2020. CRA will then advise the taxpayer to repay the estimated amounts that were issued starting in July 2020.
The CRA encouraged all Canadians to have filed their tax returns by June 1, 2020 or as soon as possible to receive the right amount of benefits based on their 2019 tax return, and to ensure continuity of benefits beyond September 2020.
There are two separate wage subsidy programs available.
- This wage subsidy program is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the CRA.
- Eligible employers are individuals (excluding trusts), some partnerships, non-profit organizations, registered charities, and Canadian-controlled private corporations eligible for the small business deduction.
- Subsidy is equal to 10% of the remuneration paid between March 18, 2020 and June 19, 2020 to a maximum of $1,375 per eligible employee and $25,000 per employer.
- As the subsidy is government assistance, it is taxable to the employer.
- How to apply: Benefit claimed by reducing source deductions (not CPP nor EI).
The Canada Emergency Wage Subsidy (CEWS) helps businesses keep and return workers to their payroll.
On July 17, proposed changes to the CEWS were announced. The CEWS, which was previously extended to the end of August, has now been extended to December 19, 2020, including redesigned program details until November 21, 2020.
- Eligible employers include non-profit organizations, registered charities, individuals, taxable corporations (not size dependent), and partnerships consisting of eligible employers that have seen a drop in revenues of at least 15% in March and of at least 30% in April and 30% in May.
- The subsidy will be paid by the government to the employer (i.e. not a reduction in source deductions). As this subsidy is government assistance, it is taxable to the employer.
- This is a subsidy for employees; employers are expected to at least make best efforts to top up salaries to 100% of maximum wages covered.
- Funds will be sent from CRA directly to businesses.
- Public bodies are not eligible for this subsidy (public bodies includes municipalities, local governments, crown corporations, public universities, colleges, schools, and hospitals)
- How to calculate the wage subsidy: Use the CEWS calculator to calculate your wage subsidy amount.
- For Not-for-Profits and Registered Charities: The government proposes additional flexibility with respect to the revenue loss calculation allowing Not-for-Profits and Registered Charities the option to include or exclude government funding in their revenues for the purposes of applying the revenue reduction test.
- How to apply: CEWS application is now open. Employers can apply for the CEWS through My Business Account or through the CRA’s online application portal, and their representatives can apply through Represent a Client. Access their FAQ document for more in-depth technical information.
- This program provides bridge financing for large commercial businesses in all sectors.
- Conditions exist and employers will be required to make certain disclosures upon application.
- Companies must demonstrate how they intend to preserve employment and maintain investment activities
- Companies must commit to respect collective bargaining agreements and protect workers’ pensions
- Program will require strict limits to dividends, share buy-backs, and executive pay
- Companies required to commit to publish annual climate-related disclosure reports consistent with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures
- Program not available to companies that have been convicted of tax evasion
- Applications are now open.
The objective of the Business Credit Availability Program (BCAP) is to help Canadian businesses obtain financing during the current period of significant uncertainty. The BCAP will support access to financing for Canadian businesses in all sectors and regions by providing $65 billion of additional support through the Business Development Bank of Canada and Export Development Canada.
The Business Credit Availability Program (BCAP) is being expanded to mid-sized companies with larger financing needs. Support for mid-market businesses will include loans of up to $60 million per company, and guarantees of up to $80 million. Through the BCAP, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will work with private sector lenders to support access to capital for Canadian businesses in all sectors and regions.
- Canada Emergency Business Account (CEBA): Provides interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced. A quarter of this loan (up to $10,000) may be eligible for forgiveness under certain conditions.
- Eligibility: Businesses that spent between $20,000 - $1.5M in total payroll in 2019 and operating as of March 1, 2020. As of June 26, 2020 eligibility has been expanded to include owner-operated small businesses that do not have a payroll, sole proprietors receiving business income directly, as well as family-owned corporations remunerating in the form of dividends rather than payroll. Applicants will have to demonstrate having eligible non-deferrable expenses between $40,000 and $1.5M in 2020.
- This support is available until October 31, 2020
- EDC Loan Guarantee for Small and Medium-Sized Enterprises: Provides credit and cash flow term loans to small and medium-sized enterprises to help these businesses weather the impacts of COVID-19. Loans of up to $6.25 million, with 80% guaranteed by the EDC, can be made. This money is to be used for operational expenses.
- Eligibility: The Co-Lending Program is available to Canadian businesses impacted by COVID-19. To qualify, companies must have been financially viable and in good standing prior to the impact of the pandemic
- This support is available until June 2021.
- BDC Co-Lending Program for Small and Medium Enterprises: This program, developed by BDC in partnership with financial institutions across the country, is intended to help Canadian businesses impacted by COVID-19 fund their operational cash flow needs.
- Eligibility: The Co-Lending Program is available to Canadian businesses impacted by COVID-19. To qualify, companies must have been financially viable and in good standing prior to the impact of the pandemic.
- This support is available until June 2021.
How to apply: All three programs are now available at various financial institutions and credit unions.
The federal government has reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses experiencing financial hardship due to COVID-19. Details include:
- A 75% decrease in rent for small business tenants for the months of April, May, June, July, August, and September.
- The program will cover 50% of the rent, with tenants paying up to 25% and the property owner forgiving at least 25%.
- How to apply: Applications opened as of May 25 and can be made through the CMHC website.
- A one-time payment of $300 for seniors eligible for the Old Age Security (OAS) pension with an additional payment of $200 for seniors eligible for the Guaranteed Income Supplement (GIS).
- A one-time non-taxable payment of up to $600 is available to help people with disabilities pay for unexpected expenses from the crisis.
- Canada Emergency Student Benefit (CESB): This benefit of $1,250 per month for the months of May to August 2020 will be available for qualifying students. The amount is increased to $2,000 for students with dependents and those with permanent disabilities. Payments are to be received from CRA. Applications are now open through CRA’s My Account. All applications for the CESB must be submitted before September 30, 2020.
- Canada Student Loans: Effective March 30, a six-month interest-free moratorium on the repayment of Canada Student Loans for all student loan borrowers. No payment will be required, and interest will not accrue during this time. This will include pre-authorized debits.
- How to apply: Students do not need to apply for the repayment pause.
Various other federal government measures to further support individuals and small businesses:
- Filing extensions: Many filing deadlines have been extended. Note that some returns and payments will still be due at the usual time.
- Corporate returns and trust returns: Corporation income tax returns and trust income tax returns originally due during June, July, or August are now due September 1, 2020.
- Personal returns: The deadline for filing T1 returns that were due on April 30, 2020 has been extended to June 1, 2020. Individuals expecting a refund or benefits should file sooner if possible, as the Canada Revenue Agency (CRA) will process refunds.
- Trusts, Partnerships and NR4 Information Returns: The deadlines for trusts, partnership and NR4 Information returns are extended to May 1, 2020. This is due to administrative requirements in advance of the June 1st deadline for filing individual income tax and benefit returns.
- Income tax payments for all taxpayers: The CRA will allow all taxpayers to defer, until September 30, 2020, the payment of any income tax amounts that become owing on or after today and before October 2020. This relief would apply to income tax balances due, as well as instalments and no interest or penalties will accumulate on these amounts during this period.
- GST/HST Remittance: Businesses, including self-employed individuals, can defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments until June 30, 2020 if due on or after March 27, 2020.
- GST Returns: Deadline not extended, however, no penalties or interest accrued until June 30, 2020.
- Customs Duty and Sales Tax for Importers Payments: Customs duty and sales tax for importers payment deadlines for statements of accounts from March to May inclusive are being deferred to June 30, 2020.
- Certain Corporate Tax Returns Receive Filing Extension: For corporations that would otherwise have a filing due date after March 18 and before May 31, 2020, their filing due date for the current tax year has been extended to June 1, 2020. This extension was modified on March 30, 2020.
Electronic signatures will be recognized by the CRA as having met the signature requirements of the Income Tax Act, as a temporary administrative measure. This is to reduce the necessity for taxpayers and tax preparers to meet in person during the COVID-19 crisis and to reduce administrative burden. This provision applies to authorization forms T183 and T183CORP,which authorizes tax preparers to file taxes.
- Deferred tax payments:Effective immediately, the following tax returns and payments with due dates after March 23, 2020 and before September 30, 2020 will now be due September 30, 2020:
- Provincial sales tax (including municipal and regional district tax)
- Carbon tax
- Motor fuel tax
- Tobacco tax
- This deferral is automatic. While a lump-sum payment could be made in September, separate returns for each reporting period must be submitted. Returns can also be filed according to the usual reporting periods, but payments may be deferred until September 30, 2020. After September 30, 2020, returns for all sales taxes will be due on their usual due dates.
- Employer Health Tax Filing Deadline: The employer health tax return and final payment due date for the 2019 calendar year has been extended to September 30, 2020. Employers required to make instalment payments for the 2020 calendar year will be able to defer these payments. The instalments will be due on the following dates:
- First instalment – December 31, 2020
- Second instalment – January 31, 2021
- Third instalment – February 28, 2021
- The remaining tax payable is due with the employer health tax return by March 31, 2021
- Reduced school tax rates for businesses: The province is further reducing the school property tax rate for commercial properties to achieve an average of 25% reduction in the total property tax bill for most businesses, providing up to $700 million in relief. This enhances the 50% reduction to the provincial school property tax rate for classes 4, 5 and 6 previously announced.
- Delayed Budget 2020 PST tax changes: The following tax changes announced in Budget 2020 are postponed and will not take effect until April 1, 2021.
- Eliminating the PST exemption for carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners
- Expanded registration requirements for Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunication services
- Delayed carbon tax increase: Increases to the carbon tax rate, as announced in Budget 2020, will be postponed until April 1, 2021.
- WorkSafeBC Payment Deferred: Businesses will not be charged a penalty if they do not pay their premiums by their usual first quarter deadline of April 30. Payments can be deferred to June 30.
- BC Emergency Benefit for Workers: The provincial government provides a one-time $1,000 payment for BC residents whose ability to work has been affected due to COVID-19. The benefit has been expanded to include British Columbians who lost their ability to work between March 1 and March 14, 2020.
- ICBC Payment Deferrals: Customers on a monthly Autoplan payment plan, who are facing financial challenges due to COVID-19, can defer their payment for up to 90 days with no penalty. Payment deferral is also available for fleets. Use their online resource tool to apply for a deferral by 6pm at least one business day before your next payment is due.
- BC Hydro Payment Deferrals:
- The Customer Crisis Fund (CCF) is a program that offers support for residential customers who are facing disconnection of the BC Hydro service, despite attempting to make payment.
- BC Student Loan Payments on Hold: Starting March 30, 2020, BC student loan payments are automatically frozen for six months.