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Writer's pictureKelvin Leung, CPA, CMA

Canada Revenue Agency (CRA) COVID-19 Economic Response March 19, 2020

Updated: Apr 10, 2020

With increasing concern and spread of COVID-19, the health and safety of our clients, colleagues, and families is our utmost concern. Clearly Financials wants to assure you that we are closely monitoring the situation and have taken a number of precautionary measures.

While our offices remain open and fully operational, all staff are equipped to work remotely. This will allow us to provide you with uninterrupted service in the event of a temporary shutdown.


We will be limiting face-to-face meeting where possible. As always, we offer meetings via telephone and video conferencing. To ensure we minimize risks to all of us, we encourage clients to submit documents and information electronically.


As our office has already embraced cloud technology, our workflow systems allow you to upload documents to any of the checklists that we send out to you. For larger volumes of documents, we can setup a shared online folder for you to share documents with us. Please contact Matthew from our office for more information at 780-988-9812.


Today, the Government of Canada released a COVID-19 Economic Response Plan. A summary of some key points may be found below. Applications for some benefits will be available through your CRA MyAccount portal. If you do not have your CRA MyAccount setup yet, and would like assistance with this, please contact Pianky in our office to walk you through it at 780-988-9812.


During this challenging time we are committed, as always, to fully serving your needs, meeting existing deadlines, and delivering prompt responses to questions and concerns. Please contact me if you have questions on how the current situation affects the tax situation for you or your business. Our thoughts are with all those affected by COVID-19. We wish you, your loved ones, and your peers health and peace of mind as we continue to respond to worldwide health efforts to contain the situation.

Sincerely,


Kelvin Leung, CPA, CMA

 

203, 8603 104 Street NW

Edmonton, AB T6E 4G6

Ph: 780-988-9812 / F:1-866-888-9812




Canada’s COVID-19 Economic Response Plan

The Government of Canada is taking immediate, significant and decisive action to help Canadians facing hardship as a result of the COVID-19 outbreak. Highlights from the announcement, made today on March 18, 2020 are below. Please note that some of the announcements are in the proposal stages. We expect further updates and details to be announced.


Canada Revenue Agency (CRA) Extension of Tax Deadlines for Individuals

  • Due date for personal taxes deferred to June 1, 2020

  • Individuals expecting benefits should still file by April 30th to ensure their benefits are properly calculated

  • Payment of any income tax amounts that become owing from today to August 31, 2020 deferred to August 31, 2020.

  • There was no specific mention of payment deadline extensions for:

  • March 15, 2020 personal income tax instalments


Canada Revenue Agency (CRA) Extensions for Businesses

  • Payment of any income tax amounts that become owing from today to August 31, 2020 deferred to August 31, 2020.

  • Relief applies to tax balances due, as well as instalments, under Part I of the Income Tax Act.

  • No interest or penalties will accumulate on these amounts during this period.

  • There was no specific mention of payment deadline extensions for the following:

  • GST/HST payments

  • Employer source deductions

  • Corporate tax balances which became due prior to March 18, 2020, and which will be reported on tax returns due subsequent to that date

  • Part IV tax payable by corporations on dividends received

There was no mention of filing deadline extensions for Corporate or GST filings.


Alberta Corporate Tax

Alberta has a separate income tax filing and collections systems from the CRA. To date, there have been no announcements from Alberta Tax and Revenue Administration (TRA). Therefore, it should be assumed that payment requirements for Alberta Corporate Taxes remain unchanged at this time.


Temporary Income Support

“Emergency Care Benefit” providing up to $900 bi-weekly, for up to 15 weeks for the following groups who are not eligible for EI sickness benefits:

  • workers including the self-employed, quarantined or ill with COVID-19;

  • workers including the self-employed, who are taking care of a family member who is sick with COVID-19; and

  • parents with children who require care and supervision due to school closures and are therefore unable to earn employment income.


  • Requirement for a medical certificate will be waived

  • Ongoing attestation that you qualify will be required every 2 weeks

  • In effect as of March 15, 2020

  • Application for the Benefit will be available in April 2020

Application Channels:

  1. Through your CRA MyAccount portal;

  2. Through your My Service Canada Account; or

  3. By calling a toll free number which will be available in April.


Longer-Term Income Support

For Canadians who lose their jobs or face reduced hours as a result of COVID’s impact.


Emergency Support Benefit

  • To be delivered through the CRA to provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment


EI Work Sharing Program

  • EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers,

  • extending the eligibility of such agreements to 76 weeks,

  • easing eligibility requirements, and

  • streamlining the application process.


Other Income Support


Goods and Services Tax credit (GSTC)

  • One-time special payment by early May 2020

  • Average boost to income for those benefitting from this measure will be close to $400 for single individuals and close to $600 for couples.


Canada Child Benefit (CCB)

  • 2019-20 benefits increased by $300 per child.


Canada Student Loans

  • Six-month interest-free moratorium on repayments


Registered Retirement Income Funds (RRIFs)

  • Reducing required minimum withdrawals by 25% for 2020


Support to Businesses - Wage Subsidy for Employers

The government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months:

  • Equal to 10% of remuneration paid during the period.

  • Maximum subsidy of $1,375 per employee and $25,000 per employer.

  • Businesses may reduce their remittances of income tax withheld on their employees’ remuneration.

  • Eligible employers include corporations eligible for the small business deduction


Canada Revenue Agency (CRA) Audit and Review Activity

  • The Canada Revenue Agency will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks.

  • For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.


Role of Financial Institutions

  • Banks to provide flexible solutions on a case-by-case basis including pay disruption, childcare disruption, or illness.

  • Up to a 6-month payment deferral for mortgages

  • Opportunity for relief on other credit products.


Mortgage Default Management Tools

Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty.

  • Includes payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.

  • CMHC will permit lenders to allow payment deferral beginning immediately.


In Closing

These are trying times for many people. We are working hard at Clearly Financials to support our local communities in Edmonton through these unprecedented challenges.


Realize that you are not alone, that we are in this together and most importantly that there is hope.


For other COVID-19 updates, please view the resources on our website.

 

Disclaimer

This is a summarized version of complex matters that are rapidly changing. We expect further clarification from the government in the coming days. Book an appointment to speak with us if you have any questions about your specific accounting or tax needs.

 
Clearly Financials Chartered Professional Accountants Logo with Cloud-Based Accounting and Tax Message

We also provide personal tax preparation services or individuals and families.


Our office is located in Edmonton, Alberta. Through the power of cloud technology, we are able serve clients throughout Canada.



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