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Alexandre Hunault
LL.M. Fisc.

Tax Specialist

Government fiscal measures

The federal and provincial governments have announced fiscal measures to help workers, employers and persons who may be affected by the pandemic. This will help you to better understand the nature of the measures and who they are aimed at.

Extension of the tax return filing due date

For individuals:
the return filing due date will be deferred
from April 30 to June 1, 2020.
For trusts :

the return filing due date will be deferred
from March 30 to May 1, 2020.

Deferral of the filing date for income tax amounts owing

The Canada Revenue Agency and Revenu Québec will allow all taxpayers (individuals and businesses) to defer, until after August 31, 2020 :

  • the payment of any income tax amounts that become owing on or after today and
  • before September 2020 (payment of tax balances or instalments).

The CRA is also temporarily allowing electronic signatures to be used so that tax professionals will not have to meet their clients for an in-person signature.

Minimum RRIF withdrawals

The minimum RRIF or LIF withdrawals required for 2020 are reduced by 25%. This will result in fewer withdrawals from portfolios during a turbulent stock market period.

Social program enhancements

  • To help low-income families, the federal government will double the amount of the GST tax credit with a special payment in May.
  • The federal government also plans to increase the Canada Child Benefit by $300 per child. The purpose of this increase is to help Canadian families, who will receive a special payment in May.

Measure for SMEs

Certain businesses, including SMEs eligible for the small business deduction, will be able to benefit from a three-month temporary subsidy. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum of $1,375 per employee and $25,000 per employer.

Help for workers

The government of Quebec is offering a financial assistance program to meet the needs of workers who, because they are in mandatory isolation to counter the propagation of the COVID-19 virus, cannot earn income. Affected workers are eligible provided that they are not compensated by their employer, they do not have private insurance and they are not covered by employment insurance. The assistance is $573 per week for a period of 14 days. This period can be extended to a maximum of 28 days if the worker’s state of health warrants it.

Easing of employment insurance rules

The one-week waiting period is waived for those individuals in imposed quarantine who claim Employment Insurance (EI) sickness benefits. This temporary measure went into effect on March 15, 2020.

The requirement to provide a medical certificate to access EI sickness benefits is waived.

Canada Emergency Response Benefit (CERB)

On March 18, 2020, the government announced the Emergency Care Benefit and the Emergency Support Benefit. However, these programs have been replaced by the Canada Emergency Response Benefit (CERB).

The federal government will provide a taxable benefit of $2,000 a month for up to 16 weeks to eligible individuals. The amount is subject to change.

This benefit is for:

  • Canadians who have lost their job, who are sick, quarantined, or taking care of someone who is sick with COVID-19.
  • Parents who have to stop working to care for sick children or who have to stay at home because of school and daycare closures.
  • Workers who still have a job but are not being paid because of the work interruption caused by COVID‑19.
  • Wage earners, contract workers and self-employed individuals who are not eligible for Employment Insurance.

However, the following criteria must be met:

  • Have earned an income of at least $5,000 in 2019 or in the 12 months preceding the coming into effect of the CERB.
  • Are able to prove that you have had no income for at least two consecutive weeks for a reason related to COVID-19.

Although the first benefits will only be paid in April 2020, the CERB is retroactive to March 15, 2020.

This measure is expected to help businesses keep their employees during the crisis, while retaining the ability to quickly resume operations when the emergency measures are lifted.

Eligible individuals will be able to apply in early April (April 6, 2020) on a new Web portal. The government promises to pay benefits within ten days of receiving an application. The benefits will then be paid every four weeks.

Business financing

The Business Development Bank of Canada, Investissement Québec and regional development agencies offer various short-term financing solutions to help Canadian businesses meet the requirements of their current credit products and to maintain their operations, if necessary.

The chartered banks are apparently willing to find solutions to the liquidity problems that some businesses may face in the coming weeks or months.

These companies could be offered up to six months of payment deferral on loans and other credit products, a measure similar to that offered to individuals for their personal mortgages.

However, only CIBC has publicly stated that it will offer payment deferral to its clients on its loans, based on the individual circumstances of each business.

Other measures
  • The government is placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.
  • The CMHC is providing increased flexibility for homeowners facing financial difficulties to defer mortgage payments on CMHC-insured mortgage loans. Lenders can allow payment deferral beginning immediately.
  • The Bank of Canada lowered its policy rate for the third time in only one month. It went from 0.75% to 25%. This rate cut will ease the financial burden of borrowers who must pay back variable-rate loans.

Complete information is available on the websites of the federal Department of Finance and of Revenu Québec.

CANADA    QUÉBEC

If you have any questions concerning these measures, please contact your advisor or your wealth management advisor.

Alexandre Hunault, LL.M. Fisc.
Tax Specialist

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