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The Government of Canada recently released its COVID-19 Economic Response Plan pursuant to which a number of economic measures will be implemented during the COVID-19 outbreak. Stikeman Elliott has provided a general overview of the impending changes to taxation, available here. This update will cover taxation and related aspects that arise from Alberta-specific measures taken by the Government of Alberta.
Corporate Income Tax
To support corporations, given anticipated cashflow shortfalls as a result of the COVID-19 outbreak, Alberta corporate income tax balances and instalment payments coming due between March 18, 2020 and August 31, 2020 may be deferred until August 31, 2020. The Alberta government has made this tax deferral available to all corporations that are subject to Alberta corporate income tax, in an effort to ensure that they can better address liabilities and continue operations over the next several months. Further, the Alberta government indicated that the penalties and interest that would otherwise be payable in respect of such payment will be waived.
Education Property Tax Freeze and Deferral for Business
The previously proposed increase to education property taxes is being reversed, which will freeze the education property tax rate to last year's level. In addition to the freeze, payment of education property tax may be deferred for a period of up to six months. As of the date of the announcement, Alberta municipalities are not expected to alter the process for setting education property tax rates for the upcoming year, but will defer collection of current payments to future tax years.
Workers' Compensation Benefits (WCB) Payments Deferred
The Alberta government has granted private sector employers the ability to defer WCB premium payments until 2021. Employers who have already paid WCB premiums for 2020 will be eligible for a rebate or credit. In addition, for small and medium businesses, the government has pledged to cover 50% of the premium when due in 2021.
It is anticipated that the government assistance will save such businesses $350 million. According to Alberta's Budget 2020, small businesses are those that employ up to 99 employees and businesses may be considered medium-sized where they employ up to and including 500 employees. Businesses with more than 500 employees are unlikely to qualify for government assistance in paying 2020 WCB premiums.
The author would like to acknowledge the support and assistance of Conrad Gibbs, articling student at law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.