Tax Measures Under Canada's COVID-19 Economic Response Plan

Reader Alert: On September 24th, 2020, the Speech from the Throne announced many tax and related initiatives including the extension of the Canada Emergency Wage Subsidy (the “CEWS”) program to the summer of 2021.

Reader Alert: On July 17, 2020, the Government of Canada released details, as well as draft legislation, in respect of a redesigned Canada Emergency Wage Subsidy (the “CEWS”) program. The legislative proposals, in the form of Bill C-20, An Act respecting further COVID-19 measures (“Bill C-20”), received Royal Assent. Bill C-20 can be found here, and the backgrounder and news release relating to the legislative proposals released on July 17, 2020 can be found here and here. In addition, a more detailed commentary from our Firm on Bill C-20 can be found here.

Reader Alert: On May 15, 2020, the Government of Canada announced that the CEWS will be extended by an additional 12 weeks to August 29, 2020, and that regulatory changes have been made to extend eligibility of the CEWS to additional categories of employers. The Government also announced its intention to propose legislative changes intended to bridge gaps in respect of seasonal employees and employees returning from extended leave, accommodate certain amalgamations and wind-ups, and better align the tax treatment of trusts and corporations for CEWS purposes. The press release and backgrounder can be found here, and additional commentary from our Firm on the announcement can be found here.

Reader Alert: on April 11, 2020, the Government of Canada passed Bill C-14, enacting the CEWS, a 75% employer wage subsidy. More detailed tax commentary on CEWS can be found here and a more comprehensive summary of this measure can be found here.

Since March 18, 2020, the Government of Canada announced a series of tax and economic measures under Canada’s COVID-19 Economic Response Plan (the “ResponsePlan”) to support the Canadian economy during the COVID-19 global pandemic. The Response Plan is designed to help stabilize the Canadian economy, and includes measures to assist both individuals and businesses through direct transfers, tax deferrals, and measures to ensure businesses continue to have access to credit.

On March 25, 2020, the Government of Canada passed Bill C-13, An Act respecting certain measures in response to COVID-19 (“Bill C-13”) to implement the Response Plan measures.

The original Response Plan has since been supplemented by measures announced on March 20, 2020 (“Additional Measures to Support Continued Lending to Canadian Consumers and Businesses”), and on March 27, 2020 (“Additional Support for Canadian Businesses from the Economic Impact of COVID-19”).

On April 11, 2020, Bill C-14, A second Act respecting certain measures in response to COVID-19, which enacts the CEWS, received royal assent. The CEWS will be non-cumulative with the existing 10% wage subsidy.

This summary explains the above measures as well as sales tax measures for goods and services tax/harmonized sales tax (“GST/HST”) and provincial sales tax (“PST”) registrants who are directly impacted by COVID-19.

Federal Tax Measures for Canadian Businesses

10% wage subsidy

The Response Plan contains measures to help businesses retain their workers. Framework legislation enacted as part of Bill C-13 created a federal payroll deduction rebate for remuneration an eligible employer pays between March 18, 2020, and June 19, 2020. Eligible employers are individuals, non-profit organizations, registered charities, Canadian-controlled private corporations (“CCPCs”) having a business limit in the last taxation year greater than nil (i.e. eligible for the small business deduction), and partnerships whose members are comprised solely of the foregoing persons. In addition, an eligible employer must:

  • have an existing business number and payroll program account with the Canada Revenue Agency (the “CRA”) as of March 18, 2020; and
  • pay salary, wages, bonuses, or other remuneration to at least one individual employed in Canada during the applicable period.

The new regulations released by the Government of Canada on May 15, 2020, in connection with this 10% wage subsidy provide that the prescribed rate at which the amount of the rebate is to be calculated represents by default 10% of remuneration paid by eligible employers to eligible employees during the applicable period, but eligible employers may elect a lower percentage. Under the new regulations, the maximum “prescribed amounts” are $1,375 per eligible employee and $25,000 per eligible employer. This is consistent with previous statements made by the Government. Assistance received under the wage subsidy reduces the amount of remuneration expenses eligible for other federal tax credits calculated on the same remuneration.

The Department of Finance has further indicated that associated CCPCs would not be required to share the maximum subsidy of $25,000 per employer. Additionally, since the subsidy operates by allowing an eligible employer to reduce their payroll remittances, the Department of Finance suggested that if the amount of the subsidy exceeded an eligible employer’s payroll remittances for the applicable period, the employer would be allowed to continue to reduce remittances beyond June 20, 2020, or request the unclaimed amount be paid out to the eligible employer or credited against the eligible employer’s 2021 payroll remittances.

Further tax commentary on the 10% wage subsidy can be found here.

75% wage subsidy (CEWS)

Tax commentary on the CEWS can be found here, here and here, including commentary on the administrative guidance issued by the CRA in respect of the CEWS on April 21, 2020.

Proposed Relief for Registered Pension Plans

To provide relief to employers who sponsor registered pension plans or salary deferred leave plans, the Department of Finance released draft regulations on July 2, 2020, which:

  • Add temporary stop-the-clock rules to the conditions applicable to salary deferral leave plans from March 15, 2020 – April 30, 2021;

  • Remove restrictions that prohibit a registered pension plan from borrowing money;

  • Permit retroactive contributions to a money purchase account to replace contributions that were not made in 2020, and to ensure that retroactive contributions plus regular contributions in 2021 do not exceed the maximum contribution limit (the pension adjustment limit) for 2021.;

  • Setting aside the 36-month employment condition in the definition “eligible period of reduced pay” for the purpose of using prescribed compensation to determine benefit or contribution levels. As well, the requirement that the reduction in pay must be generally commensurate with the reduction in work hours.

The announcement did not specify when the draft regulations would come into effect.

Flexibility for Businesses in Respect of Paying and Filing Taxes

The Response Plan contains measures that will allow businesses to defer until September 1, 2020, the payment of any income tax that becomes owing between March 18, 2020, and August 31, 2020. Interest and penalties will not be applicable to these unpaid tax balances during this period. This measure will apply to both monthly instalments and year-end tax balances due under Part I of the Income Tax Act (Canada) (the “ITA”).

Generally, corporations (other than certain CCPCs) must pay income taxes owing under Parts I, VI, VI.1, and XIII.1 of the ITA on a monthly basis by the last day of each month. A corporation must also pay the remainder of any Part I taxes within 2 months (or in the case of certain CCPCs, 3 months) after its fiscal year-end. Under this measure, both of these payment deadlines are deferred until September 1, 2020, but only in respect of taxes levied under Part I of the ITA.

The deadlines to file certain categories of tax and information returns have been extended:

  • corporations may defer filing T2 returns otherwise due in June, July or August 2020, to September 1, 2020;

  • trusts having a taxation year ending on December 31, 2019, could defer filing T3 returns until May 1, 2020. The deadlines for trust returns that would otherwise be due in June, July or August in 2020, have been extended to September 1, 2020;

  • partnerships and their members could defer filing T5013 returns until May 1, 2020; and

  • the deadline to file NR4 information returns was extended to May 1, 2020.

  • the filing of information returns under Part XVIII and Part XIX of the Income Tax Act may be deferred until September 1, 2020. No interest or penalty will be assessed during this period. In addition, no penalty will apply for failure to obtain a self-certification on financial accounts opened before January 1, 2021.

Additionally, unless otherwise noted by the CRA, administrative income tax actions required of taxpayers by the CRA due after March 18, 2020 can be deferred until June 1, 2020. Such actions include the filing of:

  • returns;

  • elections;

  • designations; and

  • responses to information requests.

This extension does not apply to prescribed forms, receipts or documents, or prescribed information, that must be filed with the Minister on or after the day specified, in respect of the form, receipt, document or information, in subsection 37(11) or paragraph (m) of the definition “investment tax credit” in subsection 127(9) of the ITA. As well, payroll deductions and related activities (except those relating to the reduction of remittances in respect of the temporary wage subsidy) must continue to be performed on time.

Taxpayers who are unable to file a return or make a payment by the new deadlines due to COVID-19 may request that any penalties or interest charged to their account be cancelled.

Curtailment of Audit and Reassessment Activity

The CRA has issued the following relief measures:

  • Reassessment: The normal reassessment period described in subsection 152(3.1) of the ITA and the assessment period described in section 298 of the Excise Tax Act (“ETA”) are extended pursuant to the Time Limits and Other Periods Act (COVID-19). Certain time limits that would otherwise expire between March 13, 2020, and December 30, 2020, and time limits which would otherwise expire between May 20, 2020, and December 30, 2020, are extended by six months or until December 31, 2020, whichever comes first. The Ministerial order regarding the extension of ITA provisions can be found here and the Ministerial order regarding the extension of ETA provisions can be found here.

  • Collections: Starting in September, collections officers will begin contacting individuals and businesses with a balance owing to discuss and re-evaluate their financial situation. The officer may request payment of the debt, or offer a payment arrangement where possible.

  • Audits: The CRA has expressed that it is resuming a full range of audit work and is adapting its practices to reflect the health and economic impacts of COVID-19. Specifically, the CRA is prioritizing actions that are beneficial to the taxpayer or where taxpayers have indicated there is an urgency to advancing the CRA’s audit. The CRA has also indicated that it is focusing on higher dollar audits first, audits close to completion, and those with a strategic importance to the Government of Canada, provinces and territories, or Canada’s tax treaty partners. In addition, efforts to combat suspected fraud and other criminal activity are advancing. Beginning in September, the CRA’s business audits will focus on complex and aggressive tax planning arrangements using partnerships and trusts by sophisticated and high income earners. Audits in the real estate sector aim to combat offensive non-compliance prevalent in Vancouver and Toronto areas. Starting in October, medium business audits will resume, except for audits in the GST/HST Special Audits Program, which includes non-profit organization and charities, and MUSH sectors (Municipalities, Universities, Schools and Hospitals).

  • Objections: The CRA has indicated that any objections related to Canadians' entitlement to benefits and credits have been identified as a critical service which will continue to be delivered during COVID-19 times of hardship and therefore, there should be no delays associated with the processing of these objections. For any other objections filed by individuals and businesses related to other tax matters, the CRA is currently holding these accounts in abeyance. The deadline to make any objection requests due March 18, 2020, or later will be extended until June 30, 2020.

  • Appeals: The Tax Court of Canada (“TCC”) reopened for the transaction of business on July 6, 2020, with the exception of the Hamilton office. Sittings will resume in certain major centres on July, 20, 2020, (see list of cities here), and conference calls may resume earlier. The TCC issued new health and safety guidelines for attending in-person hearings. Hearings scheduled up to December 31, 2020, in cities that are not on the list will be adjourned and rescheduled to dates beyond 2020. The Registry will contact affected parties directly. Parties may have the option of moving their hearing to one of the centres on the list. Where possible, the court will conduct online or teleconference proceedings for case management conferences, status hearings, pre-trial conferences, motions without witnesses, and applications without witnesses. To help alleviate the backlog caused by the Court’s closure a fast-track settlement conference process will be temporarily available. The fast-track settlement conference process will not require parties to have made a written offer of settlement. It is expected that fast-track settlement conferences will be scheduled within 90 days of the parties applying by way of a joint written request with the Court. If the parties fail to settle, the appeal will be put back in the scheduling queue at the same stage as it was prior to the fast-track settlement conference being held. All motion days are suspended for the time being, but parties may also request for their motion to be considered in writing by consent of both parties. Also, the period beginning March 16, 2020, and ending on September 13, 2020, will be excluded from the computation of time under the TCC’s rules, response deadlines to the Registry, and from any Order or Direction of the Court. Parties should add 173 days to the timetable issued by the court before March 16, 2020, by consulting the chart provided by the TCC here. For more information, see the TCC’s Notice to the Public and the Profession, dated June 17, 2020, July 6, 2020, July 8, 2020, and August 14, 2020.

  • Appeals to the CPP/EI Appeals Division: The CRA’s dispute resolution and taxpayer relief programs are resuming operations in respect of decisions made by the CRA on pensionability issues under the Canada Pension Plan (“CPP”), and insurability issues under the Employment Insurance Act (“EI Act”). Taxpayers who filed objections or CPP/EI appeals to the Minister, or who applied for relief of penalties and interest, are currently being contacted. CPP/EI rulings will be activated.

  • Requirement to pay (“RTP”): Banks, employers and other third parties do not need to comply or remit on existing RTPs until further notice.

  • Requests for information (“RFI”): Taxpayers who have received a request for information issued prior to March 16, 2020 and due after that date will be contacted where the CRA continues to require the information in the RFI.

  • Transfer pricing documentation: Requests for contemporaneous documents issued before April 1, 2020, with a deadline of March 18, 2020, or later, are deemed to be canceled. These requests will be re-issued at a later date and the requested documents must be submitted within three months of the re-issued request.

  • Scientific research and experimental development (“SR&ED”): New reviews or audits are not being undertaken at this time. Ongoing exams and audits will be finalized as soon as possible to help companies get their credits faster. In general, the CRA does not communicate with small and medium-sized businesses to review SR&ED claims. Taxpayers being audited can contact their auditor by phone or online through My Business Account if they want or need the review of their SR&ED claim to proceed. Applications approved during the current period may be subject to review or audit at a later date to confirm eligibility. The CRA gives priority to objections related to critical programs, which include SR&ED claims. The SR&ED reporting deadlines on or after March 13, 2020, are extended as follows:

    • Corporations: deadlines are extended by six months or to December 31, 2020, whichever comes first.

    • Individuals who operate a sole proprietorship: deadlines are extended by six months to December 15, 2020, for those with a December 31, 2018, tax year-end and who had a SR&ED reporting deadline of June 15, 2020.

    • Trusts: deadlines are extended by six months or to December 31, 2020, whichever comes first.

  • Film and media tax credits: The Canadian film or video production tax credit program will not undertake any new audits. Ongoing audits will be completed as soon as possible to help businesses receive their credits faster. Applications approved during the current period may be subject to review or audit later.

Once the crisis has subsided, there will be a significant backlog for the CRA to deal with, and considerable delays for the foreseeable future.

As of June 1, 2020, the CRA has opened up its National Leads Program to information about fraud in COVID-19 federal aid programs, including the Canada Emergency Response Benefit (“CERB”), CESB, and CEWS (each of which is defined infra).

Federal Tax Measures for Canadians

Temporary Income Support for Individuals

The Government of Canada has introduced temporary measures to help Canadians as Canada’s economy restarts. On October 2, 2020, Bill C-4, An Act relating to certain measures in response to COVID-19, received royal assent and was enacted into law the following recovery benefits:

  • A simplified EI program took effect September 27, 2020, and includes a temporary minimum of 120 hours of work in the past 52 weeks required to qualify. There will be a minimum benefit rate of $500 per week and at least 26 weeks of regular benefits.

  • A new Canada Recovery Benefit (“CRB”) is available since September 27, 2020, for one year, and provide a benefit amount of $1000 for a 2-week period, for up to 13 periods (26 weeks). The benefit is for workers who are not eligible for EI, mainly the self-employed and including those working in the “gig” economy, who are currently not working for reasons related to COVID-19, or had a reduction of at least 50% in average weekly income compared to the previous year due to COVID-19. Recipients can earn employment and self-employment income while receiving the CRB. However, recipients will have to reimburse $0.50 of the benefit for every dollar of net income they earn above $38,000 during the calendar year at the same time their personal tax return is due.

  • A new Canada Recovery Sickness Benefit (“CRSB”) is available since September 27, 2020, for one year, and provide a benefit amount of $500 per week, for up to two weeks. The benefit is for workers who are unable to work at least 50% of their scheduled work week because they are sick or must self-isolate due to COVID-19.

  • A new Canada Recovery Caregiving Benefit (“CRCB”) is available since September 27, 2020, for one year, and provide a benefit amount of $500 per week for up to 26 weeks per household. The benefit is for workers who are unable to work at least 50% of their scheduled work week because they are caring for a child under the age of 12 or for a 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.

Amounts received under all three benefits program are taxable and a 10% withholding tax will be applied at source. T4A slips will be issued by the CRA to reflect the total COVID-19 benefits received and the amounts withheld at source.

The Response Plan initially contained a CERB to support workers who have lost income due to the COVID-19 pandemic. The CERB replaced the previously announced Emergency Care Benefit and Emergency Support Benefit. The CERB was available from March 15, 2020 until September 26, 2020. The last date to apply is December 2, 2020.

The CERB provided $2,000 over a four-week period for up to 28 weeks, which is accessible online through CRA’s My Account or over the phone by automated service starting April 6, 2020. Canadians will begin to receive CERB payments by direct deposit or by cheque within 10 days of submitting an application. Payments are retroactive to the individual’s eligibility date. The CERB is a taxable benefit and must be reported in the 2020 income tax return.

Eligibility criteria for the CERB are as follows:

  • Canadian resident with a social insurance number (workers who are not Canadian citizens or permanent residents – including temporary foreign workers and international students – may be eligible to receive the Benefit if they meet the other eligibility requirements.).

  • At least 15 years old.

  • Eligible for EI regular or sickness benefits or stopped working due to COVID-19, for example:

    • Let go or hours reduced to zero.

    • Quarantined or sick with COVID-19 or taking care of others who are sick or quarantined.

    • Taking care of dependents whose care facility is closed due to COVID-19.

  • Income of at least $5,000 in 2019 or in the 12 months prior to the date of application.

  • Did not receive more than $1,000 in combined employment and/or self-employment income for 14 or more consecutive days in the initial four-week benefit period. For subsequent claims, the applicant cannot have earned more than $1,000 in income for the entire four-week benefit period of the new claim.

  • If allowed by the province or territory, workers can receive provincial or territorial support payments in addition to the CERB.

The income of at least $5,000 can be from income earned outside of Canada and can come from any or a combination of the following sources:

  • Employment and self-employment.

  • Workers who are not eligible for EI can include maternity and parental benefits under the EI program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan.

  • Non-eligible dividends (generally, those paid out of corporate income taxed at the small business rate).

Workers cannot receive both EI and CERB for the same period. Workers already receiving EI regular benefits will continue to receive these benefits until the end of the benefit period. Workers who qualify for EI and who have lost their job can continue to apply for EI. Workers should also continue to apply for other EI benefits, including maternity, parental, caregiving, fishing and worksharing. Claims by workers who became eligible for EI regular or sickness benefits on March 15, 2020 or later, will be automatically processed through the CERB. Starting April 6, 2020, a single portal assists workers with both CERB and EI applications and guide workers to the appropriate benefit. Workers who were eligible for EI retain their eligibility to receive EI once they stop receiving the CERB, and the period during which they received the CERB does not impact EI entitlement.

On April 15, 2020, the federal government extended the scope of the CERB to seasonal workers who have exhausted their right to regular EI benefits, and who are unable to undertake their regular seasonal work due to the pandemic. Workers who have recently exhausted their regular EI benefits and are unable to find employment or return to work due to the pandemic also now have access to the CERB. In addition, artists may receive royalty payments for copyrighted works produced before March 1, 2020, while collecting the CERB. These modifications are retroactive to March 15, 2020.

In guidance published on April 21, 2020, the CRA stated that where an employer rehires an individual who received or continues to receive the CERB during an eligibility period that overlaps with any period during which the employer claims the CEWS in respect of the rehired individual, such individual may have to repay some or all of the CERB.

The Government of Canada is working with provinces and territories through a new transfer to share the cost of a temporary wage boost for low-income essential workers (those earning less than $2,500 per month). Essential workers are those that the provinces and territories have deemed essential in fighting COVID-19, including front-line hospitals and nursing home workers, food suppliers, or essential retail service providers. Quebec and British Columbia have already implemented direct wage support for such low-income essential workers.

For post-secondary students and recent graduates who are not eligible for the CERB or EI, but who are unable to find full-time employment or work due to COVID-19, the government introduced the Canada Emergency Student Benefit (“CESB”). The CESB provides $1,250 per month for eligible students from May to August 2020, and $2,000 per month for students with dependents and those with permanent disabilities. The CRA stated that all applications for the CESB must be submitted before September 30, 2020. The CESB is administered by the CRA.

Canada’s First Ministers announced a Federal/Provincial/Territorial Safe Restart Agreement that will establish a temporary income support program to provide workers with up to ten days of paid sick leave related to COVID-19.

CRA announced new T4 reporting requirements for the 2020 taxation year. These additional reporting requirements will apply to all employers, and will be used to validate payments under the CEWS, the CERB, and CESB. Eligibility criteria for the CERB, CEWS, and CESB is based on employment income for a defined period. The new requirement means employers should report income and any retroactive payments made during these periods.

Longer-Term Income Support for Workers

The maximum duration of the 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, is extended from 38 weeks to 76 weeks. In addition, eligibility requirements have been eased and the application process has been streamlined.

Income Support for Individuals

The Response Plan contains measures to boost assistance to low- and modest-income families through $7.5 billion of additional payments which will be made under existing benefit programs as follows:

  • A one-time special payment of a GST/HST credit was paid on April 9, doubling the maximum GST/HST credit for qualifying households for the 2019-2020 benefit year.
  • The Canada Child Benefit (“CCB”) will be increased in July for the 2020-2021 benefit year. The maximum monthly benefit will increase to $6,765 per child under the age of six and to $5,708 per child aged 6 to 17. This is in addition to the one-time additional $300 per child qualified CCB recipients received with their May 2020 payment as part of the Government’s response to COVID-19.

Beginning in October, the CRA will conduct benefits validation reviews. Individuals that have not filed their 2019 tax returns should do so as soon as possible to avoid any future interruptions to CCB and/or GST/HST credit payments. Once 2019 tax returns are filed and assessed, such payments will be reinstated.

In recognition of the volatility in stock market conditions, the Response Plan also includes a measure to reduce required minimum withdrawals from Registered Retirement Income Funds (“RRIFs”) by 25% for 2020, to provide flexibility to annuitants who might otherwise be forced to liquidate investments to meet minimum RRIF withdrawal requirements. The Response Plan also notes that similar rules will apply to individuals who are receiving variable benefit payments under defined contribution registered pension plans.

While the Response Plan contemplates expanding the tools that the Canada Mortgage and Housing Corporation (the “CMHC”) and other mortgage insurers offer to lenders to increase flexibility for homeowners to defer mortgage payments on CMHC-insured mortgage loans, there is no suggestion that the Government of Canada intends to introduce measures to defer repayments of amounts withdrawn from registered retirement savings plans under the homebuyers’ plan.

During the week of July 6, 2020, seniors eligible for the Old Age Security (“OAS”) pension received a one-time, tax-free payment of $300 plus an additional $200 for seniors eligible for the Guaranteed Income Supplement. Guaranteed Income Supplement (“GIS”) and Allowance payments are temporarily extended for seniors whose 2019 income information has not been assessed. Seniors are encouraged to submit their 2019 income information as soon as possible and no later than October 1, 2020 to avoid an interruption in benefits.

The Government of Canada provides a one-time, tax-free, non-reportable payment of $600 to help Canadians with disabilities who are holders of a valid Disability Tax Credit certificate, and are beneficiaries as at July 1, 2020 of any of the following: Canada Pension Plan Disability; Quebec Pension Plan Disability Pension; or Disability supports provided by Veterans Affairs Canada. Those who are eligible but never applied for the Disability Tax Credit, or holds a certificate that expired in 2019, must apply by September 25, 2020. Seniors with disabilities, who were eligible for the one-time seniors payment announced on May 12, 2020 (above), will also be eligible for the one-time payment to persons with disabilities. Those eligible for both payments will receive a total amount of $600 broken into 2 payments: (i) an additional $300 for seniors who received the $300 one-time OAS pension payment; and (ii) an additional $100 for seniors who received the $500 one-time payment for both the OAS pension and the GIS or the Allowance.

Flexibility for Taxpayers

The CRA deferred the filing due date for 2019 tax returns as follows:

  • for corporations:
    • June 1, 2020, for T2 returns with a filing deadline after March 18, 2020, and before May 31, 2020, and
    • September 1, 2020, for T2 returns with a filing deadline between May 31 and August 31, 2020;
  • for individuals (other than trusts): June 1, 2020 (from April 30, 2020);
  • for trusts:
    • May 1, 2020 (from March 31, 2020) for those having a taxation year ending on December 31, 2019,
    • June 1, 2020, for those with a filing due date after March 30, 2020, and before May 31, 2020, and
    • September 1, 2020, for returns that would otherwise have a filing due date between May 31 and August 31, 2020;
  • for non-residents:
    • May 1, 2020, for NR4 information returns under Part XIII;
    • September 1, 2020, non-resident individuals electing under section 216(4) who would otherwise have a filing deadline on May 31, or in June, July, or August 2020; and for on-resident taxpayers electing under section 217 who would otherwise have a filing deadline of June 30, 2020;
    • June 1, 2020, for non-resident corporations electing under section 216(4) that would otherwise have a filing deadline after March 18 and before May 31, 2020; and
  • for information returns, elections, designations and information requests:
    • September 1, 2020, for 2019 information returns under Part XVIII and Part XIX of the Income Tax Act; information returns, elections, designations and information requests that would have been due on May 31, or in June, July, or August 2020; and T5013 Partnership Information Return (“T5013 Return”) for partnerships that normally have a filing deadline on May 31, or in June, July, or August 2020.
    • June 1, 2020, for T5013 Returns for partnerships that normally have a filing deadline after March 31 and before May 31, 2020; and other information returns, elections, designations and information requests that would have been due after March 18 and before May 31, 2020;
    • May 1, 2020, for T5013 Returns for partnerships that normally have a March 31 filing deadline; and the 2019 NR4, Statement of Amounts Paid or Credited to Non-Residents of Canada information return.

The CRA has indicated that no late-filing penalties will be applied to personal, corporate, and trust income tax returns filed on or before September 30, 2020. However, the CRA encourages individuals, corporations, and trusts to file their tax returns as soon as possible.

Any income tax that becomes owing by the taxpayers between March 18, 2020, and September 29, 2020, under Part I of the ITA will be deferred until September 30, 2020. Penalties and interest will not be charged if payments are made by September 30, 2020.

Interest on existing tax debts related to income tax returns from April 1, 2020, to September 30, 2020 will be waived. Penalties and interest assessed on the taxpayer’s account prior to this period will not be cancelled.

Taxpayers who are unable to file their 2019 income tax return on time will continue to receive the GST/HST credit and/or the CCB until the end of September 2020. If the 2019 tax return is not assessed, payment amounts will be based on information from 2018 tax returns.

Taxpayers who are unable to file a return or make a payment by the deadlines as a result of COVID-19 can request the cancellation of penalty and interest charged to their account. Penalties and interest will not be charged if the new deadlines that the government has announced to tax-filing and payments are met. For more information about taxpayer relief and how to make a request to the CRA to have interest and/or penalties cancelled, please go to Canada.ca/taxpayer-relief. 

To reduce the administrative burdens and the necessity for taxpayers to meet with tax preparers in person, the CRA will recognize electronic signatures as having met the signature requirements of the ITA on a temporary basis. This will allow certain authorization forms (T183 Information Return for Electronic Filing of an Individual's Income Tax and Benefit Return, or T183CORP Information Return for Corporations Filing Electronically), which normally require signed originals, to be signed electronically.

Free tax clinics will be held virtually on an interim basis to assist those who depend on this service while respecting physical distance guidelines. Clinics will have greater flexibility to receive and authenticate documents in various ways, including using video communication.

To avoid taxpayers having to declare bankruptcy, the CRA proposes a solution to assist taxpayers and Licensed Insolvency Trustees (“LITs”) in circumstances where the CRA is a creditor and the debtor is experiencing financial hardship. CRA is waiving the default pursuant to section 62.1 of the Bankruptcy and Insolvency Act (“BIA”), and is granting a deferral of payments to the estate up to September 1, 2020. This includes any amounts subject to section 60(1.1) of the BIA as per CRA’s existing Administrative Agreement policy with LITs for proposals that are tabled under Part I of the BIA. For consumer proposals under the BIA, the CRA is accepting an amended proposal deferring payments up to September 1, 2020.

New measures for consumer proposals have been introduced in all provinces. As a result of these orders, debtors who have submitted consumer proposals will be able to “skip” three additional payments between March 13, 2020, and December 31, 2020, without defaulting on their proposal.

Taxpayers may deduct home office expenses under certain conditions. Additional information regarding this deduction can be found here.

The CRA has indicated (and again here) that, pending a review by the Department of Finance Canada, the CRA will not require an employer to terminate an individual’s deferred salary leave plan in the event that the individual defers their leave of absence beyond the six-year maximum deferral period. The CRA has noted that this administrative position will apply regardless of the reason for deferring the leave.

The CRA has indicated that a health care spending account (“HCSA”) that qualifies as a private health services plan (“PHSP”) and which has unused credits expiring between March 15 and December 31, 2020, could temporarily permit the carry forward of those unused credits for a reasonable period to allow members to access services that were otherwise restricted during COVID-19. The CRA’s position is that a carry-forward period of up to six months would generally be considered reasonable and would not, in and of itself, disqualify the HCSA from being a PHSP; however, it is the terms of the particular HCSA that will determine whether an employee can carry forward any unused credits.

International Tax Measures for Businesses and Individuals

CRA's Guidance on international income tax issues raised by the COVID-19 crisis provides relief respecting adverse impacts of COVID-related travel restrictions. The guidance is as follows:

  • Individual tax residency: In general, an individual’s residence for Canadian tax purposes is a question of fact decided according to common law criteria, which are based on the individual's ties to Canada. In addition, an individual who is physically present in Canada for a period or periods totaling 183 days or more in a taxation year is deemed to be resident in Canada all year round. Where a non-resident cannot return to their country of tax residence due to travel restrictions, CRA’s position is that this factor alone will not result in the individual being resident in Canada for Canadian tax purposes.
  • Corporate tax residency: Under the Canadian tax system, companies that were incorporated under foreign laws can be considered resident in Canada if their "central management and control" is located in Canada. Certain tax treaties decide the issue of dual residence, taking particular account of the place where the company’s affairs are actually managed. If directors of companies subject to such tax treaties are present in Canada due to travel restrictions and must attend board meetings in Canada because of these restrictions, the CRA will not consider this reason alone to be sufficient for the corporation to be considered resident in Canada. Determinations of corporate residency involving potential dual residency with non-treaty countries will be determined on a case-by-case basis.

This administrative approach will also be followed in respect of other entities established in foreign jurisdictions that are considered corporations under Canadian income tax law, such as limited liability companies.

In addition, where appropriate, the CRA will consider adopting a similar approach in determining the residency of a commercial trust.

  • Permanent establishment: Non-residents must pay tax on income from a business carried on in Canada. In general, a resident of a country with which Canada has a tax treaty is only liable to pay tax in Canada if the person’s activities meet the definition of “permanent establishment” in the treaty. When the employees of a non-resident entity are required to perform their duties in Canada due to travel restrictions, the CRA will not consider this alone to be sufficient to create a permanent establishment in Canada. The non-resident entity must still file a return for that year, however.

Also, where a dependent agent contracts in Canada on behalf of a non-resident entity during the travel restrictions, activities limited to the period during which the restrictions are in effect will not be considered sufficient to create a permanent establishment in Canada, as long as those activities would not otherwise have been performed in Canada.

To determine if an individual meets the 183-day presence requirement under a tax treaty’s permanent establishment provision, the CRA will exclude any day of physical presence in Canada that is solely due to travel restrictions.

  • Carrying on business: Where the non-resident is resident in a country with which Canada does not have a tax treaty, that non-resident must file a return if it carries on business in Canada and the non-resident employer will be subject to Canadian withholding obligations unless a waiver of withholding has been obtained. If the non-resident can demonstrate to the CRA that it carried on a business in Canada solely because of the travel restrictions, the CRA will consider administrative flexibility on a case-by-case basis.
  • Cross-border employment income: According to the Canada-US Tax Treaty, Canada is authorized to tax the salaries, wages and other similar remunerations that a resident of the United States receives in respect of employment services provided in Canada. However, this income is not taxable in Canada if it does not exceed CAD $10,000, or if the individual stays in Canada for a period or periods the total of which is less than 183 days in any 12-month period that begins or ends in the taxation year and the income is not payable by an employer who is resident in Canada or through an employer’s "permanent establishment" in Canada. Due to the COVID-19 crisis, some residents of the United States may be forced to perform their duties in Canada for an extended period of time due to travel restrictions. Where an individual is a resident of the United States, but performs employment functions in Canada only because of travel restrictions, the days during which the individual performs those duties will not be taken into account for the purposes of calculating the 183 days.

The CRA will take this approach when applying this test under other Canadian tax treaties.

  • Waiver requests: the processing of applications to CRA for a waiver of the withholding requirement in respect of payments for services rendered in Canada by non-residents, or remuneration paid to a non-resident officer or employee, was temporarily interrupted due to the COVID crisis. Requests not processed within 30 days due to this interruption will not result in an assessment for failure to deduct, withhold or remit in respect of those amounts. Urgent waiver requests may be submitted electronically on a temporary basis. CRA will review on a case-by-case basis situations where the waiver request could not be submitted due to travel restrictions. Both the non-resident and the person paying the amount must otherwise fulfil their Canadian reporting and remitting obligations in respect of the waiver application.
  • Disposition of taxable Canadian property by non-residents: Where a non-resident has submitted a request for a Section 116 Certificate in respect of a disposition of taxable Canadian property, and the certificate has not been issued by the time a purchaser's remittance is due to CRA’s temporary interruption of processing such requests as a result of the COVID crisis, the purchaser or vendor may request a comfort letter from CRA. Urgent requests for comfort letters may be submitted by email on a temporary basis, or by contacting the CRA’s Individual tax enquiries line at 1-800-959-8281.

The above guidance applies from March 16, 2020, to September 30, 2020, and CRA does not expect to extent such guidance beyond that date.

Federal Tax Measures for Charities

Flexibility for Registered Charities

The Charities Directorate implemented the following measures:

  • The filing deadline for all charities with a Form T3010, Registered Charity Information Return, due between March 18, 2020, and December 31, 2020 is postponed to December 31, 2020.
  • Starting in September, the Charities Directorate will begin contacting charities to resume ongoing charity audits, begin CEWS post-payment audits, and begin new audits to address highest risk areas.
  • Starting in September, the Charities Directorate will begin processing revocations for failure to comply with the requirements of charity registration.

Deferral of the GST/HST Remittance and Customs Duty Payments

GST/HST Remittance Deferral

On June 29, 2020, the Government of Canada confirmed that businesses must make GST/HST payments or remittances that became due on or after March 27, 2020, and before July 1, 2020, and file these returns by June 30, 2020. Interest will begin to apply to outstanding remittances and payments, and penalties will begin to apply to outstanding returns, effective July 1, 2020.

Businesses that continue to experience difficulty in making a GST/HST remittance or payment or filing a GST/HST return can contact the CRA to request for the cancellation or waiver of penalties and interest, and/or for a flexible payment arrangement.

Interest on existing tax debts related to GST/HST returns from April 1, 2020, to June 30, 2020, will be waived. Penalties and interest assessed on the taxpayer’s account prior to this period will not be cancelled.

Starting in October, the GST/HST Delinquent Filer program will begin, which will hold refunds on non-compliant GST/HST registrants, and address chronic and high-risk delinquent filers.

Deferral of Customs Duty and GST for Importers

In a commercial goods importation context, payments owing for customs duties and GST at a rate of 5% on imports are generally due before the first day of the month following the month in which the statements of accounts are issued to the importers of commercial goods. The Government of Canada has also announced that payment deadlines for statements of accounts for March, April, and May are deferred to June 30, 2020. On June 29, 2020, the Government of Canada also confirmed that the customs duty payment deferral was ending as planned on June 30, 2020.

The government stated that both of these measures provided the equivalent of up to $30 billion in interest-free loans to Canadian businesses and they will help businesses continue paying their employees and their bills, and help ease cash-flow challenges across the country.

Electronic signatures on GST/HST documents

The CRA has indicated it will accept, as a temporary measure, electronic signatures for GST/HST documents submitted online. Effective July 6, 2020, businesses will be able to use a new electronic service to submit a GST/HST document with an electronic signature. The link to this new service will be found on the My Business Account main web page of the GST/HST program account menu. This temporary measure does not apply to GST/HST returns and forms that are paper filed.

Alberta Tax Measures

On March 18, 2020, the Government of Alberta released the following tax measures, which were supplemented on May 28, 2020, and June 30, 2020.

Measures for businesses

  • Effective July 1, 2020 the general income tax rate on businesses decreased from 10% to 8%.
  • Businesses with corporate income tax balances owing or installment payments coming due between March 18, 2020, and August 31, 2020 will be able to defer these payments until September 30, 2020. Penalties and interest that would otherwise be payable in respect of these payments will be waived. The deferral does not apply in respect of tax balances or installment payments made prior to March 18, 2020. The filing deadline for an Alberta Corporate Income Tax Return (AT1) has been extended to June 1 for an AT1 that would otherwise have a filing deadline between March 18 and June 1, 2020, and September 1 for an AT1 that would otherwise have a filing deadline in June, July or August, 2020. A late-filing penalty will not be assessed as long as the AT1 is filed on or before the respective extended deadline. The filing deadline for a Notice of Objection (Form AT97) that would otherwise have a filing deadline between March 18 and June 30 is extended to June 30, 2020.
  • Education property tax rates will be frozen at 2019 levels, reversing the planned 3.4% increase added in 2020 Alberta Budget. Moreover, collection of non-residential education property tax for businesses will be deferred for six months. Municipalities are expected to set the education property tax rates as they normally would, but to defer collection. Any deferred amounts will be repaid in future tax years.
  • The Government of Alberta will modify its corporate income tax audit and collection practices during the COVID-19 pandemic, but did not provide specific details on the proposed modifications.
  • Hotels and other lodging providers will be able to keep the amounts of tourism levy collected between March 1, 2020, and December 31, 2020. For amounts that became due to the government on or after March 27, 2020, but are not eligible for this additional assistance, hotels and other lodging providers may defer payment of the tourism levy until August 31, 2020. However, the government still expects returns to be filed as required by legislation. Late-filing penalties will not be applied between March 27, 2020, and August 31, 2020, if returns and payments are made on or before August 31, 2020. Hotels and other lodging providers must continue to collect the tourism levy from guests staying at their properties during this period.
  • Employers can defer their payment to the Workers’ Compensation Board (“WCB”) premium payment until 2021. For small and medium-sized enterprises, the Government of Alberta will cover 50% of the 2020 premium when it is due in 2021. Large companies can defer payment until 2021, at which time they will have to pay in full. Employers who have already paid their dues are eligible for a credit or rebate.

Measures for individuals

  • Education property tax rates will be frozen at 2019 levels, reversing the planned 3.4% increase added in 2020 Alberta Budget.

British Columbia Tax Measures

On March 23, 2020, the Government of British Columbia announced the following tax measures as part of its “BC COVID-19 Action Plan”, which commits $5 billion in income supports, tax relief and direct funding for people, businesses and services.

Measures for business

  • Effective as of the March 23, 2020, announcement date, the filing and payment deadlines for the following provincial taxes will be deferred until September 30, 2020:

  • employer health tax;

  • PST, including self-assessing PST registrants;

  • municipal and regional district tax on short-term accommodation;

  • tobacco tax;

  • motor fuel tax; and

  • carbon tax.

  • The following tax measures announced in the February 18, 2020, British Columbia budget have been postponed until April 1, 2021:

  • the scheduled April 1 increase to the provincial carbon tax;

  • the new PST registration requirements for foreign sellers of software and telecommunication services; and

  • the implementation of PST on sweetened carbonated drinks.

  • In an April 1, 2020, Tax Notice, revised on April 22, 2020, the Government of British Columbia announced changes to its sales tax. PST registrants must continue to include sales tax on invoices and collect from customers. Registrants may temporarily close their PST accounts if business operations have ceased. To close a PST account, registrants must submit a closure request online via eTaxBC, or submit a Request to Close Provincial Sales Tax Account (FIN 357).

  • Any corporation who has a B.C. logging tax return due between the periods of March 18 to August 31, 2020, now has until September 1, 2020 to submit.

  • Taxpayers do not have to pay Exit Tax to the Insurance Corporation of British Columbia, effective May 4, 2020, if the vehicle was purchased before May 4, 2020, and if the prorate license is cancelled and replaced with a licence for use solely within British Columbia between March 11, 2020, and September 30, 2020.

  • The Government of British Columbia originally announced a 50% reduction in school tax rates for commercial properties (Classes 4, 5 and 6) for the 2020 tax year. On April 16, 2020, the province announced an additional reduction to an average 25% reduction in the total property tax bill for most businesses. The date on which late payment penalties will apply for commercial buildings (Classes 4, 5, 6, 7 and 8) is postponed to October 1, 2020.

  • The deadline, after which late payment penalties on property tax would apply for commercial buildings (Classes 4, 5, 6, 7 and 8) in rural areas, is postponed to November 3, 2020.

  • Most debt collection activities were suspended until September 30, 2020. Most collection activities resumed on October 1, 2020. Provincial staff are available to assist taxpayers to arrange flexible payment options.

  • From March 24 to September 30, 2020, interest was not charged on outstanding amounts of most provincial taxes and royalties. Interest will be charged again effective October 1, 2020.

  • WorkSafeBC is postponing the payment deadline for the first quarter of 2020 to June 30, 2020, for employers who report payroll and make payments on a quarterly basis. Employers who report payroll on an annual basis have until March 2021, to report their 2020 payroll or pay their 2020 premiums.

  • Employers required to make instalment payments on their Employer Health Tax for the 2020 calendar year will be able to defer these payments. The instalments will be due on the following dates: first instalment on December 31, 2020, second instalment on January 31, 2020, and third instalment on February 28, 2021. The remaining tax payable is due with the employer health tax return by March 31, 2021.

  • On September 17, the government announced a temporary PST program where corporations may apply to receive an amount equal to the PST they paid between September 17, 2020, and September 30, 2021, on qualifying machinery and equipment. To be eligible for the rebate, the eligible property must be obtained substantially (more than 90%) for the purpose of gaining or producing income. Online applications open on April 1, 2021.

  • The C. Increased Employment Incentive is a refundable tax credit for employers who increase their B.C. remuneration by creating new jobs or increasing the pay of their existing low-or medium-income employees over October to December of 2020. Those employers may claim a tax credit equal to 15% of the amount that the employer’s qualifying B.C. remuneration exceeds the employer’s base B.C. remuneration. The qualifying B.C. remuneration is the total B.C. remuneration paid to employees over the last quarter of 2020, with a maximum weekly B.C. remuneration for each eligible employee of $1,129.33. The base B.C. remuneration is the total B.C. remuneration paid to eligible employees for the third quarter of 2020, with a maximum weekly B.C. remuneration for each eligible employee of $1,129.33.

Measures for individuals

  • A B.C. Emergency Benefit for Workers provides a one-time, tax-free $1,000 payment to residents of British Columbia. Residents of B.C. who receive federal EI or the CERB are eligible.

  • Eligible British Columbia residents will receive a one-time enhanced payment of the B.C. Climate Action Tax Credit in July 2020 along with their federal GST/HST credit payments:

  • an adult will receive up to $218.00 (increased from $43.50);

  • a child will receive $64.00 (increased from $12.75); and

  • a family of four will receive up to $564.00 (increased from $112.50).

Additionally, the Federal government will continue to pay benefits for an additional three months to those who are not able to file their 2019 income tax returns on time, and this will also apply to the enhanced B.C. climate action tax credit for July 2020.

  • Most debt collection activities were suspended until September 30, 2020. Most collection activities resumed on October 1, 2020. Provincial staff are available to assist taxpayers to arrange flexible payment options.

  • The Federal government will continue to pay benefits for an additional three months to those who are not able to file their 2019 income tax returns on time, and this will also apply to the B.C. Early Childhood Tax Benefit payments for July to September 2020.

  • Individuals must file the B.C. logging tax return by June 30, 2020.

  • On April 2, 2020, the Province announced a three-month exemption with regard to all federal EI benefits, including the CERB, for people already receiving income or disability assistance at that time. This exemption, which now includes the CESB (effective May 1, 2020), has been extended for the duration of these federal emergency support programs. Therefore, eligible people will continue to fully benefit without any reductions to their monthly income or disability assistance payments.

  • For individuals receiving Income Assistance (“IA”) and Disability Assistance (“DA”), whether or not they are eligible for EI or the CERB, the Province automatically provided a $300 COVID-19 crisis supplement on their cheques as of April 2020. The program, which was originally intended to last two months, has been extended an additional four months for those who are not receiving federal benefits like the CERB, This supplement will continue to be provided to low-income seniors receiving the BC Senior’s Supplement as well as income and disability assistance recipients residing in special care facilities. No action is required from recipients. The temporary $300 crisis supplement will continue to be automatically applied to cheques distributed on September 23, 2020, October 21, 2020, November 18, 2020 and December 16, 2020.

Manitoba Tax Measures

On March 22 and April 3, 2020, the Government of Manitoba announced the following tax measures:

Measures for businesses

  • The Government of Manitoba has introduced the following hiring programs aiming to ease the road ahead to recovery for Manitoba businesses:
    • The Manitoba Back to Work This Summer initiative covers 50 percent of wage costs for up to 10 weeks, between June 1 and August 30, 2020. The application deadline is August 1, 2020.
    • The Back to Work in Manitoba initiative covers 50 percent of wage costs, between July 16 and December 31, 2020, up to a maximum of $5,000, per employee. Employers are supported to hire up to 20 employees to a maximum of $100,000. The application deadline is December 1, 2020.
    • The Summer Student Recovery Jobs Program provides wage subsidies to employ students aged between 15 to 29. Employers are eligible to receive a reimbursement of $7 per hour, up to a maximum of $5,000 per student employed between May 1 and September 4, 2020, and up to a maximum of five students. Employers must submit the application at the end of the employment period, and no later than October 1, 2020.
    • The Non-profit Summer Student Incentive Grant provides an addition $6,000 to approve applicants that hire at least one full-time equivalent student under the Manitoba Summer Student Recovery Jobs Program for at least eight weeks. Charities and non-profit organizations will be contacted directly to confirm their interest and do not need to apply for the grant if they have applied for the jobs program.
  • Retail sales tax (“RST”) returns for small and medium businesses with monthly RST remittances of no more than $10,000 per month that would normally be due on April 20, May 20, June 22, July 20, August 20 and September 21 will now be due on October 20, 2020. Businesses that file on a quarterly basis that have a due date of April 20 and July 20 will now have the due date extended to October 20, 2020. Businesses that qualify for the extension that were not able to file and remit their February sales tax return by the March 20 due date will not be assessed a late filing penalty and interest will not be applied until after October 20, 2020. Interest will continue to apply on all outstanding tax debts established prior to the March remittance deadlines.
  • Health and Post Secondary Education Tax Levy (“HE Levy”) returns for small and medium businesses with monthly HE Levy remittances of no more than $10,000 per month that would normally be due on April 15, May 15, June 15, July 15, August 17 and September 15 will now be due on October 15, 2020. Businesses that qualify for the extension that were not able to file and remit their February HE Levy tax return by the March 16 due date will not be assessed a late filing penalty and interest will not be applied until after October 15, 2020. Interest will continue to apply on all outstanding tax debts established prior to the March remittance deadlines. The Department of Finance and Taxation will consider flexible repayment options for businesses with remittances of more than $10,000.
  • The deadline for filing provincial tax returns and paying any amounts due was extended to August 31, 2020. The Government of Manitoba is willing to extend this date until October 1, 2020, if the federal government agrees with the measure.
  • The Government of Manitoba will provide a $6,000 non-repayable, interest-free loan to small and medium-sized businesses that do not qualify for federal programs. The loan will be forgiven on December 31, 2020, if the recipient attests at that time the business has not received any major non-repayable COVID-19 federal supports. If the applicant has received benefits under a federal COVID program, then the loan will be added to the recipient’s 2020 tax bill.

Measures for individuals

  • The deadline for filing provincial tax returns and paying any amounts due is extended to August 31, 2020. The Government of Manitoba is willing to extend this date until October 1, 2020, if the federal government agrees with the measure.
  • The Government of Manitoba is working with municipal partners to ensure municipalities do not charge interest on provincial education taxes and school division fees. The province is encouraging municipalities to do the same with respect to municipal taxes.
  • The Seniors Economic Recovery Credit provides a $200 one-time, refundable tax credit to Manitoba seniors facing additional costs due to the COVID-19 pandemic such as grocery deliveries. The credit is available to people aged 65 and over, who live in Manitoba in 2020 and who file an income tax return as a Manitoba resident.
  • The Disability Economic Support Program provides a one-time $200 benefit to lower-income Manitobans with disabilities receiving Employment and Income Assistance benefits. Cheques are mailed automatically and there is no need to apply to the program. Individuals who are receiving Employment and Income Assistance and qualify as a person with a disability are eligible. Such financial support will not be considered taxable income and will not affect any other benefits a person may receive.
  • The Manitoba Job Restart Program provides a taxable financial benefit to a maximum of $2,000 to Manitobans who safely return to work for a cumulative 30 hours per week with one or more eligible employers and voluntarily stop collecting CERB, CESB or similar federal COVID-19 financial support programs.
  • The Manitoba Risk Recognition Program provided a one-time payment to low-income, essential, front-line workers during the period of March 20 to May 29, 2020. Online applications closed on June 29, 2020.
  • On October 13, 2020, the government announced that Manitobans no longer have to pay the provincial sales tax when they get their personal income tax return prepared. The exemption took effect immediately.

Other measures

  • In person service at the Taxation Division Offices is not available. Services are continuing by telephone and online.

New Brunswick Tax Measures

The Government of New Brunswick announced the following tax measures:

Measures for businesses

  • WorkSafeNB announced on March 20, 2020, that assessment premiums related to employer payrolls for February, March and April will be deferred for three months without interest charges. This affects employers who pay their premiums on a monthly basis.
  • Business Property Tax Penalty Relief Program Eligible business may apply online for relief of tax penalties for the months of June and July 2020. The deadline to apply for the program is July 31, 2020. To qualify, a business must meet the following conditions:
    • have operations in New Brunswick;
    • be registered with Service New Brunswick; and
    • have experience an undue economic hardship directly related to the COVID-19 pandemic and were unable to pay their property taxes by May 31, 2020.

The government has indicated that this relief is not available for certain classes of properties (e.g. properties receiving the full residential tax credit, properties owned by the Government (at all levels) and by Crown Corporations, and properties classified as vacant land, etc.)

On May 27, 2020, the Government of New Brunswick announced that it will not proceed with the phased-in property tax reductions (on the provincial property tax on non-owner-occupied residential properties) that had been proposed in the 2020-2021 budget due to the government’s fiscal and economic deterioration.

Newfoundland and Labrador Tax Measures

On April 7, 2020, the Government of Newfoundland and Labrador issued a Public Advisory extending tax return filing deadlines and remission of interest and penalties. On June 8, 2020, it issued another Public Advisory that further extended tax return filing deadlines:

Measures for businesses

  • The deadline to file and pay International Fuel Tax Agreement returns for the first quarter of 2020 (January 1, 2020, to March 31, 2020) ordinarily due on April 30, 2020, from interjurisdictional carriers, under section 8 of the Revenue Administration Regulations, is extended to June 1, 2020.
  • The deadline to file all other tax returns under the Revenue Administration Act and Regulations (except tax returns required from interjurisdictional carriers), which would normally be due between March 20, 2020, and July 31, 2020, is extended to August 20, 2020, including:
    • Gasoline Tax
    • Carbon Tax
    • Health and Post-Secondary Education Tax
    • Insurance Companies Tax
    • Mining and Mineral Rights Tax
    • Tax on Insurance Premiums
    • Tobacco Tax
  • WorkplaceNL’s COVID-19 employer relief measures for late payments (clearance, interest and penalties) expired on August 31, 2020. By September 30, 2020, employers must settle or arrange payments for their outstanding account balances.
  • Taxpayers that cannot make payments when due as a result of COVID-19 can submit a written request to the Department of Finance, Tax Administration Division, at [email protected] for a remission of interest and penalties. Requests will be reviewed on a case-by-case basis.

On March 22, 2020, the Government of Newfoundland and Labrador issued a Public Advisory that in person tax administration services are temporarily suspended.

  • Taxpayers may submit tax returns, applications and payments online, by email ([email protected] for returns and [email protected] for all other transactions), by post or by using the drop-off box.
  • Telephone lines are open to set up electronic funds transfer, wire payment, or e-file payment options (709-729-6297 or toll free 1-877-729-6376).

Northwest Territories Tax Measures

On March 20, 2020, the Government of the Northwest Territories (“GNWT”) announced the following tax measures:

Measures for businesses

  • The GNWT has extended the suspension of all collection activities, including outside collection agency activity, GNWT set-offs on GNWT payments, GNWT set-offs on Canada Revenue Agency tax refunds, until September 30, 2020.

Measures for individuals

  • The GNWT announced an extension until the end of September 2020, for Income Assistance (“IA”) COVID-19 relief measures. The relief measures include:
    • exempting CERB and CESB in the calculation of IA benefits;
    • “payrolling” all clients so they do not have to report each month;
    • directing that all clients will engage in only one Productive Choice and they are not required to report on this productive choice; and
    • exempting monetary donations from being counted as income in their IA benefits.
  • The GNWT has extended the suspension of all collection activities, including outside collection agency activity, GNWT set-offs on GNWT payments, GNWT set-offs on Canada Revenue Agency tax refunds, until September 30, 2020.
  • Funding for the normal-course Income Assistance Program has been increased. This measure expired on June 30, 2020.

Nova Scotia Tax Measures

Between March 20 and 27, 2020, Premier Stephen McNeil announced the following tax measures:

Measures for businesses

  • Payments on all government loans and small business fees (including business renewal fees and workers compensation premiums) are deferred until June 30, 2020.

Measures for individuals

  • Employees and self-employed workers who have been laid off or lost their jobs and earnings due to COVID-19, but are not eligible for EI, may be eligible for the Worker Emergency Bridge. The Worker Emergency Bridge is a one-time $1,000 payment for individuals who earn an annual income between $5,000 and $34,000 and have applied or plan to apply for CERB.

Ontario Tax Measures

On March 25, 2020, the Government of Ontario released Responding to COVID-19 (March 2020 Economic and Fiscal Update), which will make $10 billion available to support individuals and businesses through tax and other deferrals:

Measures for business

  • Businesses will benefit from interest and penalty relief in relation to filing and making payments for the majority of provincially administered taxes. This relief period has been extended from August 31, 2020, to October 1, 2020. Outstanding returns and taxes that were due between April 1, 2020 and August 31, 2020 are now due by October 1, 2020. Beginning October 2, 2020, regular filing and payment activities will resume, and regular penalties and interest will apply.
  • Upcoming June 30 quarterly municipal remittance of education property tax to school boards is deferred by 90 days.
  • Employers may defer payments to the Workplace Safety and Insurance Board (“WSIB”) for up to six months.
  • The Employer Health Tax (“EHT”) exemption will be increased from $490,000 to $1 million. The exemption will return to the previous amount of $490,000 on January 1, 2021.
  • The Regional Opportunities Investment Tax Credit provides a 10% refundable tax credit for capital investments in regional development. This tax credit can be claimed upon completing the annual tax return.
    • Eligible corporations are Canadian-controlled private corporations that make qualifying investments in capital property that become available for use in certain regions of Ontario on or after March 25, 2020.
    • Eligible capital property is "available for use" in the taxation year in which a taxpayer can begin claiming capital cost allowance for depreciable property under the ITA.
    • Qualifying investments include expenditures for building, renovating or acquiring eligible commercial and industrial buildings and other property. More specifically, eligible investments are eligible expenditures in respect of Class 1 and Class 6 capital property for the purpose of calculating capital cost allowance.
    • The credit applies to expenses over $50,000, up to a maximum of $500,000.

Measures for individuals

  • Upcoming June 30 quarterly municipal remittance of education property tax to school boards is deferred by 90 days.
  • Ontario is doubling its monthly Ontario Guaranteed Annual Income System (“GAINS”) payments to seniors, to a maximum of $166 per month for individuals and $332 per month for couples. This measure begins on April 24, 2020, and continues automatically for six months.
  • The Province provided a one-time payment of $200 per child up to 12 years of age, and $250 for those with special needs, including kids enrolled in private schools.
  • Ontario Works and Ontario Disability Support Program (ODSP) recipients can get additional funding for COVID-19-related expenses by contacting their local Ontario Works or ODSP office. Funding for COVID-19-related expenses is the same for both programs: up to $100 for single individuals and up to $200 for families.

Prince Edward Island Tax Measures

The Government of Prince Edward Island (“PEI”) announced the following measures:

Measures for businesses

  • Registered private sector businesses or non-profit organizations where employees’ hours have been reduced at least 8 hours per week during the period from March 16, 2020, to March 29, 2020, are eligible for the Emergency Relief - Worker Assistance Program. The program provides up to $250 per week for each employee. Online application can be submitted until April 15, 2020. Workers who have been laid off are not eligible.
  • Property tax relief measures include:
    • Deferring provincial property tax and fee payments until December 31, 2020;
    • Extending property assessment appeal deadlines for assessment year 2020 to December 31, 2020;
    • Providing interest relief for tax year 2020, including all past due amounts;
    • Suspending tax sale processes for the remainder of 2020; and
    • Delaying mailing of provincial tax bills for 2020 until June.

Measures for individuals

  • An Emergency Income Relief Fund provides up to $500 per week for the period from March 16, 2020, to March 29, 2020, to self-employed individuals affected by COVID-19. Eligible criteria require that the self-employed individual:
    • declared business income on their most recent tax return;
    • earn business income as the primary source of income;
    • can demonstrate direct financial losses from COVID -19 isolation measures at the time of application; and
    • is not eligible for EI or other income support.
  • Property tax relief measures include:
    • Deferring provincial property tax and fee payments until December 31, 2020;
    • Extending property assessment appeal deadlines for assessment year 2020 to December 31, 2020;
    • Providing interest relief for tax year 2020, including all past due amounts;
    • Suspending tax sale processes for the remainder of 2020; and
    • Delaying mailing of provincial tax bills for 2020 until June.
  • Essential workers earning less than $3,000 per month are eligible for a one-time payment of $1,000 to be administered by their employer. This payment is intended to provide a temporary wage supplement to essential workers during the COVID-19 pandemic.

Quebec Tax Measures

The Government of Quebec announced its own relief measures in response to the COVID-19 pandemic: Bulletins 2020-3, 2020-4, and 2020-5, a March 18th Press Release, a March 19th Press Release, a March 27th Press Release, an April 9thPress Release, a May 29thInformation Bulletin (“May 29 IB”), a June 10thPress Release (“June 10 PR”) and a June 29, 2020, Information Bulletin (“June 29 IB”).

Revenue Quebec offices that closed during the height of the pandemic will reopen on August 17, 2020, to make payments, obtain forms, and drop off documents.

Measures for corporations

  • The payment deadline for tax instalments and any income tax balance owing that would otherwise be due between March 17 and September 29, 2020, has been extended to September 30, 2020. Any payment not received by September 30, 2020, will accrue interest starting October 1, 2020.
  • The filing deadline for income tax returns that would otherwise be due between June 1 and August 31, 2020, has been extended to September 1, 2020.
  • The Concerted Actions Program for the Maintenance in Employment (“PACME”) reached its maximum financial capacity as of May 27, 2020, for the business component and June 15, 2020, for the collective promotors component. Therefore, businesses are no longer able to submit applications for the PACME and are directed towards the standard offers of measures, programs and services aimed to help businesses. The PACME was implemented to provide direct subsidies to businesses (and certain independent contractors) for eligible training costs to implement good human resource management practices and optimize business efficacy and operations to help them maintain their activities during the pandemic.
  • According to the June 29 IB, tax legislation will be amended to provide for an ad hoc adjustment to the calculation of a corporations’ remunerated hours, which will apply for the given taxation year. This change is intended to limit the impact of the temporary suspension of corporations’ activities on the small business deduction (“SBD”). Accordingly, where all or part of the period that begins on March 15, 2020, and ends on June 29, 2020, (the “closing period”) is included in a corporation’s given taxation year, the number of remunerated hours determined in respect of the corporation’s employees, for the given year, will be deemed to be equal to the product obtained by multiplying the number of remunerated hours otherwise by the ratio of 365 to the number of days in the given year in excess of the number of days in the closing period in the given year. This ad hoc adjustment will also apply to the calculation of the remunerated hours of a partnership with the necessary adaptations for a fiscal year.
  • Businesses that are unable to pay their debt in a lump sum because of their financial situation may be able to spread their payments out over time, based on their ability to pay, until their debt and interest is paid in full. Details can be found here.
  • The deadline for filing form RD-222-V, Deduction Respecting Scientific Research and Experimental Development Expenditures, and any prescribed form related to the following has been extended until December 31, 2020, applicable to:
    • refundable tax credits for businesses;
    • the following non-refundable tax credits:
      • the tax credit for salaries and wages (IFC),
      • the tax credit for the development of e-business.

However, the extension only applies if the filing deadline would normally fall between March 17 and December 30, 2020.

Measures for trusts

  • The filing deadline for the income tax or information return of a trust (including a specified investment flow through trust (“SIFT trust”)) whose taxation year ended December 31, 2019, was extended to May 1, 2020.
  • The filing deadline for the income tax or information return of a trust (including a SIFT trust) whose taxation year ended on a date between January 1 and March 1, 2020, was extended to June 1, 2020.
  • The filing deadline for the income tax or information return of a trust (including a SIFT trust) whose taxation year ended on a date between March 2 and May 31, 2020, has been extended to September 1, 2020.
  • The filing deadline for the tax return of a testamentary trust subject to progressive rate taxation whose taxation year ends in 2019, and whose filing due date would otherwise be after March 16, 2020, was postponed to May 1, 2020.
  • The payment deadlines for trust (other than SIFT trusts) income tax, the annual registration fee related to a 2019 income tax return, or instalment payments normally due on June 15, 2020, have been extended to September 30, 2020. The payment deadlines for trust (other than SIFT trusts) income tax, or the annual registration fee related to a 2020 income tax return, have been extended to September 30, 2020.
  • The payment deadline for SIFT trusts for instalments and income tax balances that would have been due between March 17, 2020, and September 29, 2020, have been extended to September 30, 2020.

Measures for individuals

  • The deadline to file an income tax return was postponed to June 1, 2020, for individuals whose tax return filing-due date, for the 2019 taxation year, would otherwise be April 30, 2020.
  • The deadline for filing an income tax return for the 2019 taxation year of an individual who died in that year, but before December 1, 2019, was postponed to June 1, 2020.
  • The deadline for filing an income tax return for individuals who carried on a business in 2019, or whose spouse carried on business, remains June 15, 2020.
  • The deadline to pay (i) any balance of tax due, and/or (ii) Québec Pension Plan, Québec Parental Insurance Plan, Health Service Fund, and Québec drug insurance plan contributions for the 2019 taxation year is postponed to September 1, 2020.
  • For individuals and individuals in business, the deadline for paying income tax, contributions or the annual registration fee for the enterprise register related to the 2019 income tax return has been extended to September 30, 2020. Instalment payments normally due on June 15, 2020, and September 15, 2020, are now due September 30, 2020.
  • No late filing penalties will apply to income tax returns filed on or before September 30, 2020, because the deadline to pay taxes owing has been extended to September 30, 2020.
  • The deadline to make instalment payments for the 2020 taxation year will be postponed to September 30, 2020.
  • The minimum withdrawal by annuitants from their RRIFs is reduced by 25% for 2020.
  • The Quebec Temporary Aid for Workers Program (“PATT”) granted a lump sum of $573 per week to eligible workers for a period of 14 days of isolation. The PATT ended on April 10, 2020, following the commencement of the federal CERB.
  • On July 15, 2020, the Government announced that it will not extend the Incentive Program to Retain Essential Workers (“IPREW”), which applied to the period from March 15, 2020, to July 4, 2020. The IPREW provided $100 per week for up to 16 weeks to eligible essential workers, retroactive to March 15, 2020. Workers who received the IPREW cannot have received the federal CERB for the same week. However, workers were still eligible if their employer received the CEWS. Online registration remains open from May 19, 2020, to November 15, 2020. Payments cannot be used to offset outstanding debt with Revenu Québec. Where a worker makes a fraudulent claim, Revenu Québec may recover any amounts paid and apply a penalty equal to 50% of the total amount. Workers eligible for the IPREW include part-time or full-time workers in an essential service sector, who:
    • earn gross wages of $550 or less per week;
    • have an annual employment income of at least $5,000 for 2020;
    • have a total annual income of no more than $28,600 for 2020;
    • are at least 15 years old upon application; and
    • were resident in Quebec on December 31, 2019, and plan to reside in Québec throughout 2020.
  • Requests or renewals of advanced payments from the tax credit for home-support services for seniors due on or after March 17, 2020, are granted an extension to September 30, 2020. Current payments are maintained in the meantime.
  • Deadlines to submit renewal requests to the Housing Allowance Program (“PAL”) are extended by 2 months to a deadline no later than December 1, 2020.
  • On July 13, 2020, the temporary solidarity tax credit measure ended. Therefore, as of that date, solidarity tax credit payments may be used to repay debts, unless the debt corresponds to a tax balance payable for the 2019 taxation year for which the payment deadline was extended to September 30, 2020.
  • Taxpayers who were unable to file their 2019 income tax return before the June 1, 2020, deadline will continue to receive the solidarity tax credit until September 2020, unless Revenu Québec determines that they are no longer entitled to them. The credit will be calculated based on the amounts they received in July 2019, August 2019 and September 2019. The individuals in question will receive the entire estimated amount in a single payment in July 2020. They are still required to file the 2019 income tax return and Schedule D to ensure they receive all the amounts they may be entitled to.
  • Individuals will be required to pay back the solidarity tax credit payment if they fail to file a 2019 income tax return or they have received overpayments.
  • The Tax Assistance Service - Volunteer Program provides free virtual and telephone assistance with filing income tax returns. An easing of administrative regulations will allow volunteers to more easily get required authorizations from taxpayers and keep taxpayer information secure while limiting physical contact.
  • In the June 10 PR, the Government of Québec announced that it will reduce the single school tax rate for the period from July 2020 to June 2021 to $0.1054 per $100 of standardized property assessment.
  • In the June 29 IB, Revenu Québec announced that it will ease the stringent requirements of the child care expenses tax credit on those families pursuing education. The refundable tax credit is available to taxpayers who incur certain expenses related to childcare to enable themselves to work, seek work, carry on a business, or “attend a qualified educational institution”. The last option used to require physical presence, or at least a virtual presence, at a fixed or interactive time with the professor or the class, and thus excluded correspondence courses by mail or the Internet. The tax legislation will be amended to allow distanced learning. The amendment will apply to expenses incurred after December 31, 2019.
  • Individuals who are unable to pay their debt in a lump sum because of their financial situation may be able to spread their payments out over time, based on their ability to pay, until their debt and interest is paid in full. Details can be found here.

Despite the extension of the filing deadline, individuals should file their income tax return as soon as possible if they expect to receive an income tax refund. 

Measures for partnerships

  • Partnerships that had to file a form TP-600-V, Partnership Information Return, for 2019 by March 31, 2020, had until May 1, 2020 to file the return if all members of the partnership were individuals.
  • Partnerships in which all members are corporations must file the Information Return within five months of the end of the fiscal year. Where the deadline would otherwise fall between March 16, 2020, and May 1, 2020, the date was postponed to May 1, 2020.
  • In any other situation, the 2019 return must be filed by May 1, 2020, or the last day of the fifth month following the end of the fiscal year, whichever comes first. But if the last day of the fifth month is after March 16, 2020, the deadline for filing was May 1, 2020.
  • The payment of tax instalments and the balance of tax otherwise due by specified investment flow-through partnerships between March 17, 2020, and September 1, 2020, will be postponed to September 1, 2020.

Measures for charities

  • A registered charity whose Information Return for Registered Charities and Other Donees (form TP-985.22) is due between March 17, 2020, and December 30, 2020, may file by December 31, 2020.

Measures for QST registrants, tax on lodging and other measures

On March 27, 2020, the Government of Quebec announced that it would allow registrants to defer until June 30, 2020, the filing of QST returns and corresponding QST payments, where appropriate, for all QST returns that must be filed between March 27, 2020 and June 1, 2020, without interest or penalties. The Government of Quebec confirmed that the deadlines for filing GST/HST and QST returns remain the same going forward. However, taxpayers will not be charged interest or a penalty if they file, by June 30, 2020, all returns that they would normally have been required to file between March 27, 2020, and June 1, 2020. If the taxpayers continue to experience difficulty in filing GST/HST and QST returns after June 30, or difficulty making a GST/HST payment, they can apply in writing to have the penalties cancelled or to put a flexible payment arrangement in place. Cancellations will be granted on a case-by-case basis. More information on the Application for Cancellation of Interest, Penalties or Charges can be found here.

In addition, the Government of Quebec will accelerate the processing of requests for tax credits intended for businesses and tax refunds. Through the new measures, the government is adding $7.3 billion to companies’ liquid assets in the coming months for the postponement of the QST payment and more than $600 million in accelerated payments of tax credits.

On April 9, 2020, the Government of Quebec announced that the deadline to report and remit tax on lodging for the first calendar quarter of 2020, otherwise due by April 30, 2020, is extended to July 31, 2020. As a result, registered persons for this tax will generally be required to file two returns on or before July 31, 2020 (one for the first calendar quarter of 2020, and one for the second calendar quarter).

As of April 20, 2020, no measures have been announced regarding other taxes such as:

  • The tax on alcoholic beverages;
  • The tax on insurance premiums;
  • The specific duty on new tires;
  • The municipal tax for 9-1-1 services;
  • The fuel tax; and
  • The tobacco tax.

Other measures

To limit in-person contact, Revenu Québec will allow tax preparers to use an electronic signature on certain forms. The forms in question are form TP-1000.TE-V (Online Filing of the Personal Income Tax Return by an Accredited Person), form MR-69-V and form CO-1000.TE (Online Filing of the Corporation Income Tax Return by an Accredited Person). The information sessions usually broadcast in person to individuals and businesses, and the support program for small and medium-sized businesses, are now offered by telephone.

Revenu Québec has also has issued the following relief measures regarding audit and collection activities, objection, and appeals.

  • Audits and collections: Audits and collection activities are being limited. Concerning collection measures, Revenu Québec has indicated that it will be amenable, on a case-by-case basis, to extending payment agreements.
  • Objection: Deadlines for objections to reassessments are extended, such that the expiration of any 90-day period that falls between March 13, 2020, and June 29, 2020, is postponed to June 30, 2020.
  • Appeals: deadlines are suspended from March 15, 2020, until August 31, 2020. As of September 1, 2020, the suspension will be lifted and time limits will begin to run again for the time not yet elapsed. This applies to the following procedural matters:
  • Appeals of assessments brought to the Court of Quebec;
  • Summary appeals to the Small Claims Division of the Court of Quebec;
  • Requests for review of a decision of the Minister of Revenue refusing to extend the time for filing an objection;
  • Requests to extend the time to file an appeal or a summary appeal.
  • Collection: Revenu Québec grants a release of garnishments on current bank accounts for tax debt. On March 17, 2020, Revenu Québec ceased sending employers income seizure by garnishment notices and formal requests to pay as part of its tax debt collection. Effective April 17, 2020, existing garnishments and requests to pay are suspended until further notice. As a result, employers do not have to withhold or remit these amounts unless otherwise instructed. This temporary suspension does not apply to garnishments for support payments. Regarding support payments, Revenu Québec said that it will not garnish the CERB but it will garnish all employment insurance benefits, including the new Employment Insurance – Emergency Response Benefit (EI-ERB).

Revenu Québec is extending most administrative deadlines that would normally fall in the period from May 31, 2020, to August 31, 2020, to September 1, 2020. Revenu Québec previously postponed administrative tax filing deadlines (other than returns with specific postponement dates listed above) that fell between March 17, 2020, and May 31, 2020, to June 1, 2020. This postponement applies to the following non-exhaustive list:

  • corporate income statement;
  • mining tax return, for operators that were required to file the return between March 17 and May 31, 2020 (the deadline is September 1, 2020, for operators that are required to file the return between June 1 and August 31, 2020);
  • Quebec tax laws or regulations election such as a rollover (except QST choices that are harmonized with GST);
  • tax credit application (12 month deadline);
  • request for reimbursement of fuel taxes;
  • response to requests for information from Revenu Québec;
  • mandatory or preventive aggressive tax planning (“ATP”) disclosure;
  • Quebec education savings incentive (“QESI”) request (90-day deadline).

Revenu Québec is extending the deadline for paying mining and logging tax to September 30, 2020.

In addition, the deadline to remit any unclaimed property to the Minister of Revenue, which corresponds to the end of the first quarter following the end of the fiscal year in which the property has become unreported, is postponed to August 31, 2020. No late payment interest or penalties in respect of property which has become unclaimed during a fiscal year ending between December 17, 2019, and May 30, 2020, will accrue as long as the property is remitted to Revenu Québec before September 1, 2020. The 10-year limitation period for remitting amounts less than $ 500 to the Minister of Finance is suspended until the expiration of the COVID state of emergency. The following activities related to processing new unclaimed property are temporarily suspended until the health emergency is lifted: processing unclaimed property, maintaining the register of unclaimed property, searching for right-holders and liquidating unclaimed successions already entrusted to Revenu Québec, as well as the 10-year limit for recovering amounts less than $500 from the Minister of Finance.

Employers who can benefit from the CEWS and maintain an establishment in Quebec will receive a credit on their contribution to the Health Services Fund for a period of up to twelve weeks, retroactive to March 15, 2020. On May 29, 2020, Revenu Québec announced that it would be extending the credit until August 29, 2020. On August 17, 2020, Revenu Québec announced that it would be extending the credit until November 21, 2020. The amount of the credit is equal to the total amount of the employer’s contribution to the Health Services Fund in respect to wages paid to employees on paid leave due to COVID-19. The qualifying periods for the credit mirror the CEWS qualifying periods:

  • March 15, 2020, to April 11, 2020;
  • April 12, 2020, to May 9, 2020;
  • May 10, 2020, to June 6, 2020.

Employers must complete the Summary of Source Deductions and Employer Contributions (RLZ-1.S-V and RLZ-1.ST-V), for 2020, in order to claim the credit. As of May 1, 2020, an employer can reduce the amount of it’s periodic payment to Revenu Québec for its Health Services Fund contribution, which is attributable to a specified wage that it has paid, allocated, granted or awarded prior to the time of the periodic payment and which has not reduced another periodic payment. An employer may not amend a source deduction or employer contributions return filed before May 1, 2020, to take into account the credit for contributions to the health services fund.

According to Revenu Québec, employees can deduct employment expenses related to working from home as long as their employer does not reimburse them. These expenses include supplies, such as paper, pencils and ink cartridges, internet fees, provided they are billed according to use; expenses relating to a home office space where employment activities are carried out more than 50% of the time, including heating, electricity, cleaning products, lighting accessories and minor repairs. An employee who is a tenant can deduct a reasonable part of the rent related to the home office space. However, an employee who is an owner cannot deduct an amount for the rental value of the home workspace. Employees can deduct these employment expenses in their 2020 income tax returns by filing form TP-59-V  (Employment Expenses of Salaried Employees and Employees Who Earn Commissions) or a detailed statement of expenses as well as form TP-64.3 (General Employment Conditions) completed by the employer.

Revenu Québec commented that, in the context of COVID-19, where supporting documentation is provided, the total or partial reimbursement of a maximum amount of $500 intended to offset the cost of acquiring personal computer equipment or office equipment required for working from home is not a taxable benefit for the employee.

In the May 29 IB, the Government of Québec announced that it plans to amend tax legislation to grant discretionary power to the Minister of Revenue to extend the deadlines for businesses to apply for tax incentives.

In the June 29 IB, it was announced that temporary discretionary power will be granted to departments and agencies (e.g. SODEC for the purposes of the Quebec film or television production credit, or Investissement Quebec for, among other things, the eligibility of a corporation’s e-business activities) responsible for administering the non-tax aspects of tax incentives. Those agencies may deem businesses or persons eligible for those tax incentives to the extent they have demonstrated that their inability to meet the eligibility criteria is directly attributable to measures put in place to mitigate the effects of COVID-19. Similarly, the Taxation Act will be amended to grant the Minister of Revenue discretionary power to include any non-eligible salary or wages, or non-eligible activities, in the calculation of eligible salary or wages, or eligible activities, in similar determinations regarding eligibility for tax incentives. And similarly, the impossibility of satisfying the eligibility criteria must be directly attributable to the measures put in place to mitigate the effects of COVID-19. The amendments will apply to taxation or fiscal years ending after March 14, 2020.

Saskatchewan Tax Measures

On March 20, 2020, Premier Scott Moe announced the following tax measures:

Measures for businesses

  • As described in Information Bulletin IN 2020-03, businesses directly impacted by COVID-19 that are unable to file their PST returns and remit by the due date because of cash flow concerns will be relieved from any interest or penalties that would otherwise apply to such late filings, for the following periods:
    • Monthly filers may defer payment of amounts due for the February, March and April 2020 reporting periods to July 31, 2020.
    • Quarterly filers may defer payment of amounts due for the January 1, 2020, to March 31, 2020, reporting period to July 31, 2020.
  • Despite this relief, the Government of Saskatchewan encourages taxpayers to file their tax returns each month/quarter (with or without payment) if they are able to do so.
  • Contrary to previous announcements, businesses will not be required to submit a request for relief from penalty and interest charges for these returns. However, full payment or a payment arrangement must be in place by July 31, 2020, in order to qualify for the automatic deferral and waiver of penalty and interest. Such payment arrangements may be made by submitting electronically through the Saskatchewan eTax Service (“SETS”) located at saskatchewan.ca, or by email ([email protected]) or at the following address: Ministry of Finance (Revenue Division), PO Box 200, Regina, SK, S4P 2Z6.
  • In addition, at the time of publication, relief is not provided in relation to other type of taxes.
  • The Saskatchewan Tourism Sector Support Program provides a one-time payment for tourism businesses in the major event facilities sector and the event, attractions or tourist business sector, up to a maximum of $50,000. Eligible businesses must have experienced at least a 30 percent decline in revenue from 2019. Eligible businesses must maintain a permanent establishment in Saskatchewan and have been eligible to carry on business in Saskatchewan on February 29, 2020. Applications will be accepted starting August 24, 2020.
  • A one-time grant for small businesses of less than 500 employees equal to 15% of monthly sales revenue in either April 2019 or February 2020, up to a maximum of $5,000. Eligible businesses must have been carrying on business in Saskatchewan on February 29, 2020, and had to close or significantly reduce their operations due to a COVID-19 public health order. Business must attest that they experienced a loss in revenue due to the public health order; they plan to reopen upon cancellation of the order; and they have not received payments from other sources other than amounts from other government assistance programs. Applications close on July 31, 2020.
  • Audit program and compliance activities have been suspended so businesses can prioritize the health and safety of customers and staff, conserve resources and reduce audit travel.
  • The Saskatchewan Worker’s Compensation Board has waived penalties for late payment of premiums from until July 31, 2020, and forgave interest and penalties for late payments applied in the month of March 2020. If no additional extensions occur, interest will be applied effective Aug. 8, 2020. There are options available where requested for employers to set up regular payment plans as a mechanism to avoid interest.
  • A single window information webpage will be established for businesses to access information and receive timely updates on provincial support initiatives. A Business Response Team, led by the Ministry of Trade and Export Development, will work with businesses to identify program supports relevant to particular businesses.

Measures for individuals

  • The Self-Isolation Support Program will provide $450 per week, for a maximum of two weeks or $900 to Saskatchewan residents forced to self-isolate, who are not covered by the federal plan or other supports. Eligibility criteria are:
    • they have contracted COVID-19 or are showing symptoms;
    • they have been in contact with an infected individual;
    • they have recently returned from international travel and must self-isolate;

AND

  • they are not eligible for compensation from their employer such as sick leave or vacation;
  • they do not have private insurance covering such matters;
  • they are not covered by federal programs.

Yukon Tax Measures

The Government of Yukon announced the following measures:

Measures for businesses

  • Employers can apply for the Paid Sick Leave Rebate to pay up to $378.13 per day per employee for ten business days for employees who take sick days or self-isolate. The funding is only accessible once all existing regular paid sick leave for the employee is used. Employers can only access the program once per employee. To be eligible, the employer must:
    • have an office with a physical address in Yukon;
    • be subject to the Yukon Income Tax Act;
    • be registered as per the Business Corporations Act or the Partnership and Business Name Act, where applicable;
    • have a valid municipal business licence where applicable.
  • The Yukon Essential Workers Income Support Program provides temporary financial support, up to 16 weeks between March 15, 2020, and October 3, 2020, for lower-income workers for the delivery of essential services during COVID-19. This program is not available to workers that have accessed the CERB during the same period in which they are applying for the Yukon Essential Workers Income Support Program. To be eligible, workers must earn less than $20.00 per hour; and provide a critical or essential service, regardless of whether they are full time or part time employees. Workers will receive the lesser of:
    • a top-up of either $4 per hour, for up to 40 hours per week; or
    • an amount that brings their wage to $20.00 per hour, for up to 40 hours per week

The deadline to apply for this program is November 3, 2020.

Businesses may receive funding to reach their financial break-even point up to a maximum of $30,000 per month. The maximum amount that a business can claim from this program is $100,000. The program initially covered eligible costs incurred between March 23, 2020, and July 23, 2020. The extension covers costs incurred from August 1,2020 to March 31, 2021. Eligible costs are:

  • accrued monthly property taxes;

  • animal feed or veterinary services (for example for dog mushing or horse camps) where the expenses are core to the business;

  • aviation insurance;

  • business insurance;

  • commercial rent or lease;

  • electricity and heating fuel;

  • licences including business licences;

  • mechanical costs for aviation companies;

  • mortgage interest on owned business premises;

  • payments on assets (such as vehicles or machinery), for assets acquired before March 1, 2020;

  • pest control;

  • software, data services, and subscriptions (including financial or booking systems);

  • telephone, cable, internet and satellite;

  • vehicle leasing for vehicles used solely by the business; and

  • water, sewage and waste disposal.

For home-based businesses, business-use-of-home expenses are eligible, equal to the portion of mortgage interest or rent accepted by the CRA as attributable to the operation of the business.

Costs not listed under “eligible fixed costs”, mortgage principal payments for home-based businesses, and costs already covered by insurance are ineligible.

 

Measures for individuals

The Paid Sick Leave Rebate provides up to $378.13 per day for ten business days to employees and self-employed workers who contract COVID-19 or are required to self-isolate. The program is available from March 11, 2020, to September 11, 2020. Applicants can only access the program once.

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