Canada Emergency Response Plan Summary
Individuals
Automatic Support – Child Care Benefits have been increased by $300 per child and this one-time payment should have been automatically added in May. A one-time special payment of the GST credit will be paid to low to moderate income families normally qualifying for GST credit in April. Old Age Security (OAS) and Guaranteed Income Supplement (GIS) are being increased by $300 and $200 respectively for those who qualify in June 2020, and should receive the additional payment in July. Students with automatic withdrawals by Canada Student Loans and/or Alberta Student Loans will have a 6-month interest-free moratorium (repayment pause) started March 30, 2020 and need not apply as payments will automatically cease.
Tax Deadlines – Personal tax filing deadlines were extended to June 1, 2020 (self-employed individuals still need to file by June 15, 2020), and the due date for all individuals with personal income tax payable has been extended until August 31, 2020 without penalties or interest (no specific date as of yet). No installment payments will be due during this time.
Canada Emergency Response Benefit (CERB) – Individuals can receive up to $2,000/month for 4 months if they have been affected by COVID-19 directly or indirectly. This benefit is available for all individuals either eligible for EI, or who earned at least $5,000 in Employment or Self-Employed Income in 2019 or the 12 months leading up to their dismissal, and are not receiving any other financial support. Those who are receiving or have already applied for EI would not need to apply/reapply. CERB is now available for application.
Businesses
Canada Emergency Wage Subsidy (CEWS) – Businesses that have lost revenue of 15% in March (compared to March 2019), and 30% in April through August (compared to April-August 2019 respectively) are able to apply for the CEWS, retroactive to March 15, 2020 and eligible until August 29, 2020. Alternatively, companies (individuals, taxable corporations and some partnerships) can use an average of revenue from January & February 2020 to determine reduced revenue in lieu of 2019 comparisons. This subsidy would reimburse employers up to 75% of the wages paid to keep employees hired during this time based on the employees’ pre-crisis wages, limited to 75% of $58,700 salary per employee. In addition to this, employers can also apply for the 100% reimbursement of employer-paid contributions (CPP & EI). Employers can apply for the CEWS through their CRA My Business portal.
Temporary 10% Wage Subsidy – Employers who have an existing business number and payroll account as of March 18, 2020 are eligible to reduce the payroll remittance by 10% of the total remuneration for the period of March 18 to June 19, 2020, up to a maximum of $1,375 per employee. For instance, you have 2 employees with $4,000 salaries for a total of $8,000 payroll per month. For this 3-month period, your total payroll is $24,000, and the subsidy is 10% or $2,400. This is less than the $1,375 per employee ($2,750 for 2 employees) and therefore fully subsidized. When remitting the income tax to CRA, say $1,000 per employee per month, or a total of $6,000, the remittance can be reduced by the $2,400 wage subsidy, and the employer only has to remit $3,600 to CRA for their income tax source deductions. This cannot be applied against CPP, EI or other source deductions, only income tax. The maximum limit is $1,375 per employee up to $25,000 per employer. No application is necessary, only record-keeping to support the subsidy calculation for when CRA requires it towards the end of 2020.
GST Deferrals – Businesses that would owe GST due up to and including May 31, 2020 have had their payments deferred until June 30, 2020. This does not exempt GST due prior to February 29, 2020.
Corporate Income Tax Deferrals – Business that would owe Federal and/or Provincial Corporate Income Tax on or after March 18, 2020 until on or before August 31, 2020 can be deferred without interest or penalties until September 2020. However, companies are encouraged to make payments if possible. This includes any installment payments due in that time period.
Canada Emergency Business Account (CEBA) – A new loan program offered by the government of Canada has been implemented by financial institutions in cooperation with Export Development Canada (EDC) to provide small interest-free business loans up to $40,000 to companies who had employment income paid between $20,000 to $1.5 Million in 2019. If this loan is repaid in full by December 31, 2022, a loan-forgiveness of 25% (up to $10,000) will be applied. Contact your primary financial institution for application details.
WCB Alberta Relief – Companies with up to $10million in insurable earnings will have their 2020 WCB premiums deferred until February 2021, wherein 50% of those premiums will be waived once payments resume. Payments already made for 2020 premiums will be refunded and does not require application as reimbursement are already being processed.
Other Financial Support – For those with loans or financing, please contact your financial institution to determine if they are offering any assistance, as each institution is providing different services or relief depending on individual circumstances. In Alberta, electricity and natural gas services are also offering deferrals for up to 90 days without service cut-off. Please contact your service provider for more information.