The federal government has enacted several measures aimed at mitigating the financial impacts of Covid-19. Here are the highlights.
Tax filing deadline
The filing deadline for individuals is now June 1. For trusts with a taxation year ending on Dec. 31, 2019, the filing deadline is now May 1. Individuals and businesses that owe taxes can defer payments until September. The Canada Revenue Agency has also halted debt collection.
Encourage clients who expect to receive the GST credit and/or Canada Child Benefit (CCB) to file their returns as soon as possible to ensure their entitlements for the 2020-21 benefit year are properly determined.
Canada Emergency Response Benefit, Employment Insurance
The Canada Emergency Response Benefit (CERB) is a taxable benefit that provides $2,000 a month for up to four months for workers who lose income as a result of the pandemic due to job loss, illness, quarantine, caring for others (including children) and work disruption. Canadian workers qualify whether or not they are eligible for EI.
Applications open online and by phone on Monday, April 6, with payments to arrive within five days for direct deposits and within 10 days for cheques by mail.
More information is available at www.canada.ca/coronavirus-CERB
Benefits for workers who applied for employment insurance (EI) on or after March 15 will mirror CERB payments for the first 16 weeks.
That means Canadians who would have received EI benefits below the $2,000-per-month threshold will now be bumped up to the maximum payment. Those who would normally qualify for more than $500 per week in employment insurance (the maximum benefit is $573 per week) will instead receive the CERB payment of $2,000.
EI-eligible workers will still qualify for their usual benefits, whether lower or higher than $2000-per-month, after the four-month CERB period.
Canadians who were already receiving EI will continue to do so and need not apply to the CERB, but can switch to the program if their EI benefits end before October if they remain jobless due to Covid-19.
The government says EI-eligible workers should apply for EI now rather than wait for the CERB application to come online on April 6.
The Canada Emergency Wage Subsidy is a federal benefit designed to help businesses cover up to 75% of wages and keep their employees on payroll.
The benefit will pay 75% of the first $58,700 normally earned by employees, up to $847 per week. The subsidy is expected to last for three months — retroactive from March 15 to June 6.
Employers who can show their revenues have fallen by at least 30% in March, April or May compared to the same month last year will be eligible.
Employees receiving the benefit cannot apply for other unemployment benefits.
Those eligible for the GST credit will receive a one-time special payment of about $400 for singles and $600 for couples.
Canada Child Benefit
The maximum annual CCB payment amount will increase for the 2019-20 benefit year only by $300 per child as part of the May payment. The average increase for families will be approximately $550.
The minimum withdrawal rate for RRIFs has dropped by 25% for 2020. A similar decrease will apply to those receiving variable benefit payments under defined-contribution pension plans.
EI sickness benefits
Those applying for EI sickness benefits are no longer required to provide a medical certificate.
Payments are paused from March 30 until Sept. 30, with no accrual of interest.