Federal Budget -> COVID-19 Financial Relief for Canadians
COVID-19 Financial Relief and Resources
We normally do all TaxTips.ca articles in-house. However, it's not possible for us to keep up with the rapidly changing COVID-19 financial relief provided by governments. For this reason, we're mostly providing links to other organizations with more resources, who have been diligent in keeping others educated about the various benefits being provided. We applaud them for doing such a good job!
See how much the COVID-19 costs (federal only, doesn't include provincial) will increase the interest-bearing debt of Canada for every adult and child. Could this have been avoided?
Student Benefits, Canada Summer Jobs 2020
Additional T4 Reporting for 2020 - to help validate payments under CEWS, CERB and CESB
Business Financial Supports
- Business Credit Availability Program (BCAP) - available until June 2021
The 2019 personal tax return deadline is extended to June 1, and tax balances and instalments may be deferred till September 1st without interest or penalties. However, if you are expecting a refund, or if you receive or will receive the GST/HST credit, Guaranteed Income Supplement (GIS) or Canada Child Benefit (CCB), or other income-tested benefits (e.g. BC Pharmacare, for which you must register), it's best to file your return as soon as possible.
Update July 27, 2020: The payment due date is extended from September 1, 2020 to September 30, 2020 for current year individual, corporate, and trust tax returns, including instalment payments. Penalties and interest will not be charged if payments are made by the extended deadline of September 30th. This includes the late-filing penalty as long as the return is filed by September 30th.
The July 27th CRA announcement also indicates that interest is being waived on existing tax debts related to individual, corporate and trust income tax returns from April 1, 2020 to September 30, 2020, and for GST/HST returns from April 1, 2020 to June 30, 2020.
Important: However, if 2019 individual tax returns are not received and assessed by early September 2020, estimated benefits and/or credits will stop in October 2020 and individuals may have to repay the amounts that were issued as of July 2020.
Businesses can also defer payment of any income tax amounts that become owing on or after March 18 and before September 2020, to September 1, 2020 (now September 30th, as per July 27th update). This applies to tax balances due as well as instalments, under Part I of the Income Tax Act. This does not apply to remittances of payroll or other withholdings. These are amounts that are collected on the government's behalf by businesses, so the funds do not belong to the business. Update: GST/HST remittances can be deferred until June 30, 2020, but not GST filings. However, CRA won't impose penalties where a return is filed late, as long as it's filed by June 30th. Make sure that you can pay the GST/HST on June 30th. The director(s) of the company are personally liable for unpaid GST/HST.
See COVID-19 Economic Response Plan - Businesses and FAQ - Deferral of GST/HST Tax Remittances: CRA and COVID-19 on the Canada.ca website.
See Video Tax News Indirect Tax During COVID-19 with David Crawford, Partner, Indirect Tax from RSM Canada. Among other things, they talk about reviewing past payments to look for overpaid indirect taxes that could be recovered.
On May 12, the Prime Minister announced a one-time tax-free payment of $300 for seniors eligible for Old Age Security Pension (OAS), with an additional $200 for seniors eligible for the Guaranteed Income Supplement (GIS). This means, of course, that high-income seniors will also be receiving the $300 additional OAS payment. However, although the PM indicated it will be tax-free, we'll have to wait for the legislation to see if it will be clawed back.
GIS and Allowance payments will be temporarily extended if seniors' 2019 income information has not yet been assessed.
As per One-time tax-free payment for seniors, seniors eligible to receive the OAS or GIS in June 2020 will receive the tax-free payment. As per a June 4, 2020 announcement, the payment will be received during the week of July 6th.
Update October 23, 2020: It's not too late to become eligible for this benefit by applying for the disability tax credit (DTC). Applications must be submitted by December 31. As the October 23, 2020 press release points out, being eligible for the DTC can also provide eligibility for benefits or increased benefits such as the Registered Disability Savings Plan (RDSP), Canada Workers Benefit (CWB), and the Child Disability Benefit.
New June 5, 2020: Canadians who are certificate holders of the Disability Tax Credit (DTC) as of June 1, 2020 will receive a one-time tax-free payment of up to $600. The payment will be reduced by the one-time tax-free payments for seniors eligible for OAS and GIS. See Canada's COVID-19 Economic Response Plan, and scroll down to People with disabilities. The payment will be received automatically by those eligible. Bill C-20, which included provisions relating to this payment, received Royal Assent July 27, 2020.
The June 5th announcement also indicated that a National Workplace Accessibility Stream would be established to help people with disabilities find and keep a good job. For more on this see the June 6th news release from Minister of Employment, Workforce Development and Disability Inclusion, Carla Qualtrough. She also announced an additional $1.1 million to support national disability organizations through the Social Development Partnership Program - Disability Component, to enhance their communications and engagement activities to better address the impact of the COVID-19 pandemic on persons with disabilities.
Update July 8, 2020: Bill C-17 includes provisions for CEWS and CERB as well as for the one-time payment for persons with disabilities. When the House of Commons met both on June 10th and July 8th, the government had the opportunity to separate the disability payment legislation from the rest of the Bill so that this portion could receive Royal Assent immediately. It chose not to do this because it wanted the entire bill to be approved without changes. If you'd like a little light reading about this, you can review the Hansard and search (ctrl-f) the web page for C-17 or disabilities.
The House of Commons does not sit again now until July 22nd, so this is the earliest date that the payment might be approved. The government has given no indication of how long the payment will take once Bill C-17 receives Royal Assent. It now appears that Bill C-17 has been scrapped, with the disability payment provisions included in July 17, 2020 draft legislation.
The $600 one-time tax-free non-reportable payment will now be provided to Canadians with disabilities who are recipients of any of the following programs or benefits:
- a disability tax credit certificate provided by CRA;
- Canada Pension Plan disability benefit or Quebec Pension Plan disability benefit; and
- disability supports provided by Veterans Affairs Canada
Update July 27, 2020: Canadians with disabilities who are eligible for the disability tax credit but have not yet applied, will have a 60-day window of opportunity to do so after Bill C-20 Royal Assent, which was received July 27, 2020. This gave people until September 25, 2020 to apply for the disability tax credit.
The payment will be reduced by the one-time tax-free payments for seniors eligible for OAS and GIS.
Eligible clients will start receiving the disability payments on October 30, 2020. See One-time payment to persons with disabilities.
Tax Tip: Apply for the disability tax credit if you qualify for it.
A one-time special payment by the end of April 2020 will double the maximum annual payment amounts for the GST/HST credit for the 2019-20 benefit year. The additional payment will be made in April to individuals eligible for the GSTC, as well as to some who are not eligible for the regular GSTC. This will be based on 2018 tax returns that have been filed. See CRA's COVID-19 Increase to the GST/HST credit amount.
It is proposed to increase the maximum annual Canada Child Benefit (CCB) payment amounts, for only the 2019-20 benefit year, by $300 per child, as part of the May 2020 payment. Families who do not receive CCB may get a partial payment, depending on their income. This will be based on 2018 tax returns that have been filed. See the Video Tax News COVID-19 Economic Response Plan - Legislative Update - March 25, 2020 for more details.
The amount of mandatory minimum withdrawal from a RRIF in 2020 is reduced by 25%. This was announced by the federal government and the Quebec government. To determine your minimum withdrawal, calculate the usual minimum and then multiply by 75%. The age of the RRIF holder does not matter.
Note: Tax will only be withheld from withdrawals that are in excess of the original unreduced minimum amount. See Economic Statement - New Measure for Annuitants of Registered Retirement Income Funds.
Effective immediately, Canada Revenue Agency is accepting digital signatures on the T183 and T183CORP. These forms are normally signed in person every year to authorize tax preparers to file taxes.
Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy) was tabled on November 2, 2020 and received Royal Assent November 19, 2020, providing the legislation for CERS, and changes to CEWS.
For a good summary of the legislation see the Video Tax News Summary.
Tabled September 28, 2020 replacing Bill C-2, Royal Assent October 2, 2020
- enacts the Canada Recovery Benefits Act to enact payments of CRB, CRSB and CRCB.
- amends the Canada Labour Code to, among other things, amend the reasons for which an employee is entitled to take leave related to COVID-19, and the number of weeks of that leave that an employee may take for each of those reasons.
- gives the government spending authority to spend an additional $17.1 billion from October to December, for specific measures. This by way of amendment to the Public Health Events of National Concern Payments Act.
Tabled September 24, 2020, passed first reading, re 3 new benefits to replace CERB. News release.
Tabled July 20, 2020, Bill C-20 received Royal Assent July 27, 2020.
Update July 17, 2020: It now appears that Bill C-17 will be scrapped, as most of it is included in Bill C-20 tabled July 20, 2020. Amendments to the Canada Emergency Response Benefit (CERB) Act have been excluded from the new legislation.
- passed First Reading June 10, 2020, House of Commons now adjourned until Wednesday, July 22, 2020, when the federal economic update will be presented.
- includes provision that would allow a one-time payment to adults and children with disabilities.
- revises eligibility for Canada Emergency Wage Subsidy
- amends the Canada Emergency Response Benefit (CERB) Act
- received Royal Assent May 1, 2020
- Regulations are also available from the above link. The Regulations determine the amount of the benefit, and the maximum number of weeks for which a student may receive the benefit. See Student Benefits below for information provided by the Department of Finance.
- received Royal Assent April 11, 2020
- Eligible Entities Prescribed for COVID-19 Wage Subsidy
- Deemed Remittance
- received Royal Assent March 25, 2020
- implements measures re
- creation of Canada Emergency Response Benefit (CERB) Act to authorize income support payments to workers for loss of income related to COVID-19.
- creation of Public Health Events of National Concern Payments Act to allow payment of "all money required to do anything in relation to that public health event of national concern". This Act is automatically repealed September 30, 2020.
- Amendments to many other acts.
- Student financial assistance for fall 2020 - proposal to change the Canada Student Loan Program's eligibility requirements in 2020-21 to allow more students to qualify for supports. Non-repayable Canada Student Grants will be doubled in the coming academic year.
- for those ineligible for CERB or EI, and unable to find full-time employment or unable to work due to COVID-19. CESB would provide $1,250 per month for eligible students from May to August 2020, and $1,750 for students with dependants and those with permanent disabilities.
Application process ended on September 30, 2020. CESB enquiries phone line is 1-833-966-2099.
See Additional T4 Reporting for 2020 - in order to help validate payments under the CESB.
Opened June 25, 2020: Canada Student Service Grant will provide up to $5,000 to support student's post-secondary education costs in the fall, for students who take part in national service activities.
See Video Tax News - PM's Update - Student Support - opened June 25, 2020, which also addresses paid work placements which are available.
Find volunteer positions through the I want to Help website.
- International students: for students working in an essential service or function, the restriction that allows international students to work only a maximum of 20 hours per week while classes are in session will be removed.
Federal Government Information:
- funded 100% up to the minimum hourly wage
- part-time placements may be offered
- placements can continue to February 28, 2021
The Canada Summer Jobs call for applications for the 2020 season closed on February 28, 2020.
Longer-term income support for workers, delivered first through Service Canada then through CRA, to provide support to workers who were not eligible for EI and were facing unemployment or reduced hours as a result of COVID-19. This included parents with children who require care or supervision due to school closures, and weren't able to earn employment income.
CERB benefits are taxable. The amount received will be reported as income when your 2020 tax return is filed. No withholding tax is being deducted from CERB payments, so make sure you have the funds to pay the tax next April! You can use our Detailed Canadian Tax and RRSP Savings Calculator to estimate how much tax you will owe. Since it is expected that, like EI benefits, the CERB will not be pensionable (for CPP) or insurable (for EI) income, the amount of your CERB benefits should be entered as "other income" in the calculator.
Applications can be filed online (see below link), in My Account or, if you do not have online access, by using the dedicated phone line 1-833-966-2099 (see Calls To CRA). Payments should be sent about 10 days later. Applications must be filed by December 2, 2020.
See Additional T4 Reporting for 2020 - in order to help validate payments under the CERB.
Many people have received letters from Canada Revenue Agency (CRA) indicating that their eligibility for CERB could not be confirmed, and indicating they may have to pay back the CERB they received.
If you've received CERB when you should not have, if you repay by Dec 31, 2020, the amount you repay will not be included in your 2020 income for tax purposes. See CRA's article CERB - Return or repay a payment.
Some tax people are advising that the 2019 tax return could be revised to reduce or not claim self-employment expenses, in order to "become eligible". However, as noted above, the CERB Act does not say that income is net income as per the Income Tax Act. For more on this topic, see the article in the Financial Post by retired CPA Allan Lanthier: Five reasons CRA should give up its CERB fight over the meaning of 'income'.
According to Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr as he discusses in the Charles Adler Tonight podcast Small businesses dealing with CERB repayment, there may be reasons why adjusting the prior year tax return may not be a good idea.
June 16 2020 Update: It was announced that the CERB would be extended by 8 weeks, making it available to eligible workers for up to a total of 24 weeks.
The CERB attestation will be modified to encourage Canadians receiving the benefit to find employment and consult Job Bank, Canada's national employment service which offers tools to help with job searches.
CERB is available to workers who:
- live in Canada and are at least 15 years old
- have stopped working because of reasons related to COVID019, or are eligible for EI regular or sickness benefits, or have exhausted their EI regular or fishing benefits between Dec 29/19 and Oct 3/20
- had employment and/or self-employment income of at least $5,000 in 2019, or in the 12 months prior to the date of their application
- have not earned more than $1,000 in employment and/or self-employment income per 4-week benefit period while collecting the CERB
- have not quite their job voluntarily
See below re penalties for fraudulent claims, and information on workers being ineligible for certain reasons. And, don't forget that CERB is taxable, but no tax is being deducted!
June 8 & 11 2020 Update: The Globe and Mail obtained a draft bill that had not yet been introduced in Parliament. Bill C-17 was subsequently tabled in the House of Commons on June 11, 2020. However, Bill C-17 did not pass and is replaced with Bill C-20. The new Bill C-20 excludes the CERB provisions detailed below.
- provides for penalties of up to 3x the amount of the income support payments for individuals who submit fraudulent claims under the CERB.
- outlines a series of offences, including making false or misleading statements, failing to disclose all relevant income or receiving an income support payment for which a personal is not eligible.
- states that a worker is not eligible for income support if they fail to return to work when it is reasonable to do so and the employer makes a request for their return; fail to resume self-employment when it is reasonable to do so or declines a reasonable job offer when they are able to work.
Video Tax News information on the latest CERB FAQ updates - of interest to self-employed small business owners and others.
These measures are in the Canada Emergency Response Benefit Act.
See the Video Tax News information and 13 minute video on this topic at Canada Emergency Response Benefit Applications Now Open! Important Details.
Can employees refuse to return to work now they're earning more on CERB? by Howard Levitt, employment & labour lawyer.
Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB) and Canada Recovery Caregiving Benefit (CRCB)
These 3 benefits replace the Canada Emergency Response Benefit, which provided benefits up to September 26, 2020.
Bill C-4 received Royal Assent October 2, 2020.
- Canada Recovery Benefit (CRB) of $500 per week for up to 26 weeks for workers who are self-employed or not eligible for EI and still require income support. Income must have dropped by at leased 50%, workers must be available and looking for work, and accept work where reasonable to do so.
See CRA's Canada Recovery Benefit for more information, including how to apply.
- CRB Repayments/Clawback: Recipients of CRB will have to repay CRB benefits for 2020 or 2021 at the rate of 50 cents for every dollar of income earned in that year over $38,000 (excluding CRB benefits), up to the total amount of CRB received in the year. This clawback is calculated by both of the Detailed Canadian Tax & RRSP Savings Calculators.
See CRA's Canada Recovery Sickness Benefit for more information, including how to apply.
- Canada Recovery Caregiving Benefit (CRCB) of $500 per week for up to 26 weeks per household, for eligible Canadians unable to work because they must care for a child under 12 or family member because schools, day-cares or care facilities are closed due to COVID-19 or because the child or family member is sick and/or required to quarantine.
See CRA's Canada Recovery Caregiving Benefit for more information, including how to apply.
The new benefits are administered by CRA.
The EI premium rate will be frozen for two years, to the end of 2022.
Contact your financial institution to enquire about up to a 6-month payment deferral for mortgages, and possible relief on other credit products. Check your online banking, as some options may be available online, such as skipping a mortgage payment (which may be available only certain hours of the day). Check your financial institution's website to see if they have an online booking tool to schedule a time to speak with them, or online applications for support.
Business Financial Supports
- The Bank of Canada has reduced the target for the overnight rate three times in March. The rate has been reduced to 0.25% in that time, from 1.75%, where it had been since October 24, 2018.
- Financial institutions will assess the needs of small business banking customers on a case-by-case basis. Contact your advisor at your bank.
Launched May 25, 2020 for 4 weeks - news release.
This is a national, bilingual service operated by the Canadian Chamber of Commerce. 125 Chartered Professional Accountants (CPAs) are available to provide customized financial guidance to the smallest business owners in the most urgent need and help them through this crisis.
Call 1-866-989-1089 (toll-free), 7 days/week from 8 am to 8 pm ET, for 4 weeks
- to provide bridge financing to Canada's largest employers.
May 11, 2020 Announcement by Prime Minister Trudeau
- Announced May 13, 2020 to provide nearly $962 million to help "regional economies and small and medium businesses" that may require additional help to recover from the COVID-19 pandemic, but have been unable to access existing support measures. The relief will be provided through Regional Development Agencies (RDAs).
Service Complaints and Compliments / Kudos
When you have any dealings with CRA, you may submit complaints regarding your experience, and you can also submit compliments, or kudos, regarding a positive experience or a particular agent. This is done through the CRA Submit service feedback page.
Calls From CRA
CRA may call you in regard to a subsidy claim - they have already started doing this, in order to speed up claims processing. However, it's important to determine that the call is not a scam. Document any call you receive - caller ID on your phone display, and any information asked for or given by the agent. Also document the responses you provide.
CRA may call regarding a subsidy claim if your payroll has had a big increase, direct deposit information has changed, or other changes that generate questions for them. Ask them why the call is being made. Get their name and agent identification number - they are required to provide the ID number when requested. Ask them some questions to confirm that they already know details about your account that CRA should know.
The agent should already be familiar with the details of your subsidy claim, and should be able to relate this to you - amount, when submitted, etc. They may ask you for information to verify your identity, such as your name, date of birth, address, business account number, or the last 3 digits of your social insurance number - NEVER provide your full social insurance number.
Someone trying to impersonate a CRA agent may ask for a bank account number, or ask for payment, personal credit information. They may be aggressive, say they will get the police involved, or demand immediate payment. A CRA agent will never do this.
See What to expect when CRA contacts you for more information.
Calls To CRA
The telephone number for calls about CERB or CEWS is 1-833-966-2099. Their hours are 9 am to 9 pm local time. High call volumes means you can expect long wait times.
Make sure you document
- the date and time of your call,
- the ID number of the agent who takes your call,
- their answers to your questions. If you are unclear on their answer, ask them to repeat it, or to explain it in a different way.
A response given by an agent may be correct at the time, or correct according to a CRA interpretation at the time, but then at a later date the interpretation or legislation may change, causing the earlier response to be incorrect. They are doing their best to administer relief benefits that were put together in record time, so questions and incorrect interpretations are inevitable. Hopefully all the details will eventually be sorted out.
Video Tax News COVID-19 Updates and Resources for Accounting Professionals - updated daily or as changes occur
Canadian Federation of Independent Business (CFIB) - resources for businesses
Quickbooks Canada: Credits available for small business owners, list of benefits by province.
Government of Canada
Revised: January 24, 2021
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