Canada: Tax Measures Under Canada's COVID-19 Economic Response Plan

Reader Alert:  On May 15, 2020, the Government of Canada announced that the CEWS will be extended by an additional 12 weeks to August 29, 2020, and that regulatory changes have been made to extend eligibility of the CEWS to additional categories of employers (i.e., certain partnerships with one or more non-eligible members, indigenous government-owned businesses, registered Canadian amateur athletics associations ("RCAAAs"), registered journalism organizations and non-public educational and training institutions). The Government also announced its intention to propose legislative changes to ensure that the CEWS continues to meet its objectives. These legislative proposals are intended to bridge gaps in respect of seasonal employees and employees returning from extended leave, accommodate certain amalgamations and wind-ups, and better align the tax treatment of trusts and corporations for CEWS purposes.   The Government also stated that it "will consult with key business and labour representatives over the next month on potential adjustments to the program to incent jobs and growth, including the 30 per cent revenue decline threshold". The press release and backgrounder can be found here, and additional commentary from our Firm on the announcement will be provided shortly.

Reader Alert: on April 11, 2020, the Government of Canada passed Bill C-14, enacting the Canada Emergency Wage Subsidy, a 75% employer wage subsidy. Additional tax commentary on the subsidy can be found here. A summary of the main points of the subsidy can be found here.

Since March 18, 2020, the Government of Canada announced a series of tax and economic measures under Canada's COVID-19 Economic Response Plan (the "Response Plan") to support the Canadian economy during the COVID-19 global pandemic. The Response Plan is designed to help stabilize the Canadian economy, and includes measures to assist both individuals and businesses through direct transfers, tax deferrals, and measures to ensure businesses continue to have access to credit.

On March 25, 2020, the Government of Canada passed Bill C-13, An Act respecting certain measures in response to COVID-19 ("Bill C-13") to implement the Response Plan measures.

The original Response Plan has since been supplemented by measures announced on March 20, 2020 (" Additional Measures to Support Continued Lending to Canadian Consumers and Businesses"), and on March 27, 2020 (" Additional Support for Canadian Businesses from the Economic Impact of COVID-19").

On April 11, 2020, Bill C-14, A second Act respecting certain measures in response to COVID-19, which enacts the Canada Emergency Wage Subsidy ("CEWS"), received royal assent. The CEWS will be non-cumulative with the existing 10% wage subsidy.

This summary explains the above measures as well as sales tax measures for goods and services tax/harmonized sales tax ("GST/HST") and provincial sales tax ("PST") registrants who are directly impacted by COVID-19.

Federal Tax Measures for Canadian Businesses

10% wage subsidy

The Response Plan contains measures to help businesses retain their workers. Framework legislation enacted as part of Bill C-13 created a federal payroll deduction rebate for remuneration an eligible employer pays between March 18, 2020, and June 19, 2020. Eligible employers are individuals, non-profit organizations, registered charities, Canadian-controlled private corporations ("CCPCs") having a business limit in the last taxation year greater than nil (i.e. eligible for the small business deduction), and partnerships whose members are comprised solely of the foregoing persons. In addition, an eligible employer must:

• have an existing business number and payroll program account with the Canada Revenue Agency (the "CRA") as of March 18, 2020; and
• pay salary, wages, bonuses, or other remuneration to at least one individual employed in Canada during the applicable period.

Bill C-13 provides that both the maximum prescribed amount of the rebate and the prescribed rate at which the rebate is to be calculated will be set by regulation. The rebate is expected to be 10% of remuneration paid by eligible employers to eligible employees during the applicable period, up to $1,375 per employee and to a maximum of $25,000 total per employer. Assistance received under the wage subsidy reduces the amount of remuneration expenses eligible for other federal tax credits calculated on the same remuneration.

The Department of Finance has further indicated that associated CCPCs would not be required to share the maximum subsidy of $25,000 per employer. Additionally, since the subsidy operates by allowing an eligible employer to reduce their payroll remittances, the Department of Finance suggested that if the amount of the subsidy exceeded an eligible employer's payroll remittances for the applicable period, the employer would be allowed to continue to reduce remittances beyond June 20, 2020, or request the unclaimed amount be paid out to the eligible employer or credited against the eligible employer's 2021 payroll remittances.

75% wage subsidy (CEWS)

Tax commentary on the CEWS can be found here, including commentary on the administrative guidance issued by the CRA in respect of the CEWS on April 21, 2020.

Flexibility for Businesses in Respect of Paying and Filing Taxes

The Response Plan contains measures that will allow businesses to defer until September 1, 2020, the payment of any income tax that becomes owing between March 18, 2020, and August 31, 2020. Interest and penalties will not be applicable to these unpaid tax balances during this period. This measure will apply to both monthly instalments and year-end tax balances due under Part I of the Income Tax Act (Canada) (the "ITA").

Generally, corporations (other than certain CCPCs) must pay income taxes owing under Parts I, VI, VI.1, and XIII.1 of the ITA on a monthly basis by the last day of each month. A corporation must also pay the remainder of any Part I taxes within 2 months (or in the case of certain CCPCs, 3 months) after its fiscal year-end. Under this measure, both of these payment deadlines are deferred until September 1, 2020, but only in respect of taxes levied under Part I of the ITA.

The Response Plan contains measures that will allow businesses to defer until September 1, 2020, the payment of any income tax that becomes owing between March 18, 2020, and August 31, 2020. Interest and penalties will not be applicable to these unpaid tax balances during this period. This measure will apply to both monthly instalments and year-end tax balances due under Part I of the Income Tax Act (Canada) (the "ITA").

Generally, corporations (other than certain CCPCs) must pay income taxes owing under Parts I, VI, VI.1, and XIII.1 of the ITA on a monthly basis by the last day of each month. A corporation must also pay the remainder of any Part I taxes within 2 months (or in the case of certain CCPCs, 3 months) after its fiscal year-end. Under this measure, both of these payment deadlines are deferred until September 1, 2020, but only in respect of taxes levied under Part I of the ITA.

The deadlines to file certain categories of tax and information returns have been extended:

• trusts having a taxation year ending on December 31, 2019, may defer filing T3 returns until May 1, 2020;
• partnerships and their members may defer filing T5013 returns until May 1, 2020; and
• the deadline to file NR4 information returns has been extended to May 1, 2020.
• the filing of information returns under Part XVIII and Part XIX of the Income Tax Act may be deferred until September 1, 2020. No interest or penalty will be assessed during this period. In addition, no penalty will apply for failure to obtain a self-certification on financial accounts opened before January 1, 2021.

Additionally, unless otherwise noted by the CRA, administrative income tax actions required of taxpayers by the CRA due after March 18, 2020 can be deferred until June 1, 2020. Such actions include the filing of:

• returns;
• elections;
• designations; and
• responses to information requests.

This extension does not apply to prescribed forms, receipts or documents, or prescribed information, that must be filed with the Minister on or after the day specified, in respect of the form, receipt, document or information, in subsection 37(11) or paragraph (m) of the definition "investment tax credit" in subsection 127(9) of the ITA. As well, payroll deductions and related activities (except those relating to the reduction of remittances in respect of the temporary wage subsidy) must continue to be performed on time.

Taxpayers who are unable to file a return or make a payment by the new deadlines due to COVID-19 may request that any penalties or interest charged to their account be cancelled.

Curtailment of Audit and Reassessment Activity

For the vast majority of businesses, the CRA will temporarily suspend audit interactions with taxpayers and their representatives. The CRA will also refrain from initiating any post-assessment GST/HST or income tax audits with small or medium businesses for the next four weeks. More specifically, the CRA has issued the following relief measures:

• Collections: No collection activities will be initiated on new debts until further notice, and the CRA undertakes to make flexible payment arrangements available. No collection action will be taken with respect to objections related to tax matters filed by individuals and businesses which are in abeyance (see Objections below). If a taxpayer is prevented from making a payment when due or filing a return on time, or from otherwise complying with a tax obligation because of circumstances beyond their control, then the taxpayer can submit a request to have interest and/or penalties waived or cancelled by using Form RC4288, Request for Taxpayer Relief. Payment arrangements are also available on a case-by-case basis if a taxpayer is unable to pay its taxes, child and family benefit overpayments, Canada Student Loans, or other government program overpayments in full. For pre-existing collections situations, these will be addressed on a case-by-case basis by collections staff to prevent financial hardship.
• Audits: While the CRA has indicated that it will refrain from initiating any post-assessment GST/HST or income tax audits with small or medium businesses for the next four weeks, it has also specified that interaction with taxpayers will be limited to the cases where the legal deadline to reassess a tax return is approaching, and in cases of high risk GST/HST refund claims that require some contact before they can be paid out. The CRA has also expressed that for the vast majority of taxpayers, it would temporarily suspend audit interaction. Specifically, no new audits will be launched, no requests for information related to existing audits will be effectuated, no audits should be finalized, and no reassessments should be issued.
• Objections: The CRA has indicated that any objections related to Canadians' entitlement to benefits and credits have been identified as a critical service which will continue to be delivered during COVID-19 times of hardship and therefore, there should be no delays associated with the processing of these objections. For any other objections filed by individuals and businesses related to other tax matters, the CRA is currently holding these accounts in abeyance. The deadline to make any objection requests due March 18, 2020, or later will be extended until June 30, 2020.
• Appeals: Further to its Notice to the Public and the Profession on March 13, 2020, the Tax Court of Canada ("TCC") announced that all TCC sittings and conference calls scheduled between March 30, 2020, and May 29, 2020, inclusively, are cancelled. The Registry will contact affected parties directly. For all other business, the Registry is closed until further notice. In addition, the period from March 16, 2020, to May 29, 2020, is excluded from the computation of time prescribed by the rules of the TCC. Further, parties who file electronically are exempt from any requirement to file paper copies. However, documents will not be processed until the Court's operations resume. If there is no statutory deadline, parties are asked to wait to file until the Court resumes operations. The Court will treat all notices of appeal filed during the Court's closure, and for 60 days thereafter, as including a request to extend the filing deadline due to an inability to file based on exceptional grounds due to the pandemic and the closure of the Court Registry.
• Appeals to the CPP/EI Appeals Division: Appeals in respect of decisions made by the CRA on pensionability issues under the Canada Pension Plan ("CPP"), and insurability issues under the Employment Insurance Act ("EI Act"), will only be progressed where such appeals related to cases where EI benefits are pending. These cases will be considered on a priority basis. Other appeals will be continued when normal service resumes but neither the CRA nor the Minister of National Revenue have indicated when this is expected to occur. If additional time to respond to a request is required, the Minister of National Revenue will exercise discretion on a case-by-case basis.
• Requirement to pay ("RTP"): Banks and employers do not need to comply or remit on existing RTPs.
• Requests for information ("RFI"): Taxpayers who have received a request for information may wait until further notice before providing this information.
• Transfer pricing documentation: Requests for contemporaneous documents issued before April 1, 2020, with a deadline of March 18, 2020, or later, are deemed to be canceled. These requests will be re-issued at a later date and the requested documents must be submitted within three months of the re-issued request.
• Scientific research and experimental development ("SR&ED"): New reviews or audits are not being undertaken at this time. Ongoing exams and audits will be finalized as soon as possible to help companies get their credits faster. Applications approved during the current period may be subject to review or audit at a later date to confirm eligibility.

Once the crisis has subsided, there will be a significant backlog for the CRA to deal with, and considerable delays for the foreseeable future.

Federal Tax Measures for Canadians

Temporary Income Support for Individuals

The Response Plan contains a new Canada Emergency Response Benefit ("CERB") to support workers who have lost income due to the COVID-19 pandemic. The CERB replaces the previously announced Emergency Care Benefit and Emergency Support Benefit.

The CERB provides $2,000 per month for up to four months, which will be accessible online through CRA's My Account or over the phone by automated service starting April 6, 2020. Canadians will begin to receive CERB payments by direct deposit or by cheque within 10 days of submitting an application. Payments are retroactive to the individual's eligibility date. The CERB is a taxable benefit and must be reported in the 2020 income tax return.

The CERB is available from March 15, 2020 until October 3, 2020. The last date to apply is December 2, 2020. Eligibility criteria for the CERB are as follows:

• Canadian resident with a social insurance number (workers who are not Canadian citizens or permanent residents – including temporary foreign workers and international students – may be eligible to receive the Benefit if they meet the other eligibility requirements.).
• At least 15 years old.
• Eligible for EI regular or sickness benefits or stopped working due to COVID-19, for example:
  • Let go or hours reduced to zero.
  • Quarantined or sick with COVID-19 or taking care of others who are sick or quarantined.
  • Taking care of dependents whose care facility is closed due to COVID-19.
• Income of at least $5,000 in 2019 or in the 12 months prior to the date of application.
• Did not receive more than $1,000 in combined employment and/or self-employment income for 14 or more consecutive days in the initial four-week benefit period. For subsequent claims, the applicant cannot have earned more than $1,000 in income for the entire four-week benefit period of the new claim.
• If allowed by the province or territory, workers can receive provincial or territorial support payments in addition to the CERB.

The income of at least $5,000 can be from income earned outside of Canada and can come from any or a combination of the following sources:

• Employment and self-employment.
• Workers who are not eligible for EI can include maternity and parental benefits under the EI program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan.
• Non-eligible dividends (generally, those paid out of corporate income taxed at the small business rate).

Workers cannot receive both Employment Insurance ("EI") and CERB for the same period. Workers already receiving EI regular benefits will continue to receive these benefits until the end of the benefit period. Workers who qualify for EI and who have lost their job can continue to apply for EI. Workers should also continue to apply for other EI benefits, including maternity, parental, caregiving, fishing and worksharing. Claims by workers who became eligible for EI regular or sickness benefits on March 15, 2020 or later, will be automatically processed through the CERB. Starting April 6, 2020, a single portal assists workers with both CERB and EI applications and guide workers to the appropriate benefit. Workers who were eligible for EI retain their eligibility to receive EI once they stop receiving the CERB, and the period during which they received the CERB does not impact EI entitlement.

In guidance published on April 21, 2020, he CRA stated that where an employer rehires an individual who received or continues to receive the CERB during an eligibility period that overlaps with any period during which the employer claims the CEWS in respect of the rehired individual, such individual may have to repay some or all of the CERB.

On April 15, 2020, the federal government extended the scope of the CERB to seasonal workers who have exhausted their right to regular EI benefits, and who are unable to undertake their regular seasonal work due to the pandemic. Workers who have recently exhausted their regular EI benefits and are unable to find employment or return to work due to the pandemic also now have access to the CERB. In addition, artists may receive royalty payments for copyrighted works produced before March 1, 2020, while collecting the CERB. These modifications are retroactive to March 15, 2020.

The Government of Canada is working with provinces and territories through a new transfer to share the cost of a temporary wage boost for low-income essential workers (those earning less than $2,500 per month). Essential workers are those that the provinces and territories have deemed essential in fighting COVID-19, including front-line hospitals and nursing home workers, food suppliers, or essential retail service providers. Quebec and British Columbia have already implemented direct wage support for such low-income essential workers.

Longer-Term Income Support for Workers

The maximum duration of the Work-Sharing program, which provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers, is extended from 38 weeks to 76 weeks. In addition, eligibility requirements have been eased and the application process has been streamlined.

Income Support for Individuals

The Response Plan contains measures to boost assistance to low- and modest-income families through $7.5 billion of additional payments which will be made under existing benefit programs as follows:

• A one-time special payment of a GST/HST credit to be paid starting April 9, which will double the maximum GST/HST credit for qualifying households for the 2019-2020 benefit year.
• An increase to the maximum annual Canada Child Benefit ("CCB") of $300 per child for the 2019-2020 benefit year, paid as part of the May 20, 2020, CCB payment date.

In recognition of the volatility in stock market conditions, the Response Plan also includes a measure to reduce required minimum withdrawals from Registered Retirement Income Funds ("RRIFs") by 25% for 2020, to provide flexibility to annuitants who might otherwise be forced to liquidate investments to meet minimum RRIF withdrawal requirements. The Response Plan also notes that similar rules will apply to individuals who are receiving variable benefit payments under defined contribution registered pension plans.

While the Response Plan contemplates expanding the tools that the Canada Mortgage and Housing Corporation (the "CMHC") and other mortgage insurers offer to lenders to increase flexibility for homeowners to defer mortgage payments on CMHC-insured mortgage loans, there is no suggestion that the Government of Canada intends to introduce measures to defer repayments of amounts withdrawn from registered retirement savings plans under the homebuyers' plan.

Flexibility for Taxpayers

The CRA will defer the filing due date for 2019 tax returns as follows:

• for individuals (other than trusts) until June 1, 2020 (from April 30, 2020); and
• for those trusts having a taxation year ending on December 31, 2019, until May 1, 2020 (from March 31, 2020).

Taxpayers who are unable to file a return or make a payment by the deadlines as a result of COVID-19 can request the cancellation of penalty and interest charged to their account. Penalties and interest will not be charged if the new deadlines that the government has announced to tax-filing and payments are met. For more information about taxpayer relief and how to make a request to the CRA to have interest and/or penalties cancelled, please go to Canada.ca/taxpayer-relief. 

To reduce the administrative burdens and the necessity for taxpayers to meet with tax preparers in person, the CRA will recognize electronic signatures as having met the signature requirements of the ITA on a temporary basis. This will allow certain authorization forms (T183 Information Return for Electronic Filing of an Individual's Income Tax and Benefit Return, or T183CORP Information Return for Corporations Filing Electronically), which normally require signed originals, to be signed electronically.

To avoid taxpayers having to declare bankruptcy, the CRA proposes a solution to assist taxpayers and Licensed Insolvency Trustees ("LITs") in circumstances where the CRA is a creditor and the debtor is experiencing financial hardship. CRA is waiving the default pursuant to section 62.1 of the Bankruptcy and Insolvency Act ("BIA"), and is granting a deferral of payments to the estate up to September 1, 2020. This includes any amounts subject to section 60(1.1) of the BIA as per CRA's existing Administrative Agreement policy with LITs for proposals that are tabled under Part I of the BIA. For consumer proposals under the BIA, the CRA is accepting an amended proposal deferring payments up to September 1, 2020.

Federal Tax Measures for Charities

Flexibility for Registered Charities

The Charities Directorate implemented the following measures:

• The filing deadline for all charities with a Form T3010, Registered Charity Information Return, due between March 18, 2020 and December 31, 2020 is postponed to December 31, 2020.

Deferral of the GST/HST Remittance and Customs Duty Payments

GST/HST Remittance Deferral

To support Canadian businesses (including self-employed individuals registered for GST/HST purposes), the Government of Canada announced on March 27, 2020, that it would defer to June 30, the due dates of the GST/HST collected by the following persons and for the following periods:

• Monthly filers for GST/HST collected for the February, March and April 2020 reporting periods;
• Quarterly filers for the GST/HST collected for the January 1, 2020 through March 31, 2020 reporting period; and
• Annual filers, for GST/HST returns or instalments are due in March, April or May 2020, for GST/HST collected and owing for their previous fiscal year and for instalments of GST/HST in respect of the filer's current fiscal year. 

Deferral of Customs Duty and GST for Importers

In a commercial goods importation context, payments owing for customs duties and GST at a rate of 5% on imports are generally due before the first day of the month following the month in which the statements of accounts are issued to the importers of commercial goods. The Government of Canada has also announced that payment deadlines for statements of accounts for March, April, and May are deferred to June 30, 2020.

The government stated that both of these measures provide the equivalent of up to $30 billion in interest-free loans to Canadian businesses and they will help businesses continue paying their employees and their bills, and help ease cash-flow challenges across the country.

Alberta Tax Measures

On March 18, 2020, the Government of Alberta released the following tax measures:

• Businesses with corporate income tax balances owing or installment payments coming due between March 18, 2020, and August 31, 2020 will be able to defer these payments until August 31, 2020. Penalties and interest that would otherwise be payable in respect of these payments will be waived. However, businesses must continue to file their Alberta corporate tax returns as required. The deferral does not apply in respect of tax balances or installment payments made prior to March 18, 2020.
• Education property tax rates will be frozen at 2019 levels, reversing the planned 3.4% increase added in 2020 Alberta Budget. Moreover, collection of non-residential education property tax for businesses will be deferred for six months. Municipalities are expected to set the education property tax rates as they normally would, but to defer collection. Any deferred amounts will be repaid in future tax years.
• The Government of Alberta will modify its corporate income tax audit and collection practices during the COVID-19 pandemic, but did not provide specific details on the proposed modifications.
• Hotels and other lodging providers may defer tourism tax payments until August 31, 2020 for amounts due to the government as of March 27, 2020. Penalties and interest will not apply to deferred remittances. However, tax returns must continue to be filed in accordance with the legislation, and establishments must continue to collect the tourism levy from guests. Alberta will waive any late-filing penalties between March 27, 2020, and August 31, 2020, if all of the returns and respective remittances are received by August 31, 2020.
• Employers can defer their payment to the Workers' Compensation Board ("WCB") premium payment until 2021. For small and medium-sized enterprises, the Government of Alberta will cover 50% of the 2020 premium when it is due in 2021. Large companies can defer payment until 2021, at which time they will have to pay in full. Employers who have already paid their dues are eligible for a credit or rebate.

Measures for individuals

• Education property tax rates will be frozen at 2019 levels, reversing the planned 3.4% increase added in 2020 Alberta Budget.

British Columbia Tax Measures

On March 23, 2020, the Government of British Columbia announced the following tax measures as part of its "BC COVID-19 Action Plan", which commits $5 billion in income supports, tax relief and direct funding for people, businesses and services.

Measures for business

• Effective as of the March 23, 2020 announcement date, the filing and payment deadlines for the following provincial taxes will be deferred until September 30, 2020:
  • employer health tax;
  • PST, including self-assessing PST registrants;
  • municipal and regional district tax on short-term accommodation;
  • tobacco tax;
  • motor fuel tax; and
  • carbon tax.
• The following tax measures announced in the February 18, 2020, British Columbia budget have been postponed until at least September 30, 2020, on which date the Government of British Columbia intends to review the postponement:
  • the scheduled April 1 increase to the provincial carbon tax;
  • the new PST registration requirements for foreign sellers of software and telecommunication services; and
  • the implementation of PST on sweetened carbonated drinks.
• In an April 1, 2020, Tax Notice, revised on April 22, 2020, the Government of British Columbia announced changes to its sales tax. PST registrants must continue to include sales tax on invoices and collect from customers. Registrants may temporarily close their PST accounts if business operations have ceased. To close a PST account, registrants must submit a closure request online via  eTaxBC, or submit a Request to Close Provincial Sales Tax Account (FIN 357).
• The deadline for filing a logging tax return is June 1, 2020, for returns that were due between March 18, 2020, and May 31, 2020.
• Taxpayers do not have to pay Exit Tax to the Insurance Corporation of British Columbia, effective May 4, 2020, if the vehicle was purchased before May 4, 2020, and if the prorate license is cancelled and replaced with a licence for use solely within British Columbia between March 11, 2020, and September 30, 2020.
• The Government of British Columbia originally announced a 50% reduction in school tax rates for commercial properties (Classes 4, 5 and 6) for the 2020 tax year. On April 16, 2020, the province announced an additional reduction to an average 25% reduction in the total property tax bill for most businesses. The date on which late payment penalties will apply for commercial buildings (Classes 4, 5, 6, 7 and 8) is postponed to October 1, 2020.
• Most debt collection activities are suspended until further notice. Provincial staff are available to assist taxpayers to arrange flexible payment options.
• WorkSafeBC is postponing the payment deadline for the first quarter of 2020 to June 30, 2020, for employers who report payroll and make payments on a quarterly basis. Employers who report payroll on an annual basis have until March 2021, to report their 2020 payroll or pay their 2020 premiums.

Measures for individuals

• A B.C. Emergency Benefit for Workers provides a one-time, tax-free $1,000 payment to residents of British Columbia. Residents of B.C. who receive federal Employment Insurance or the new Canada Emergency Response Benefit (replacing the federal Emergency Care Benefit and the federal Emergency Support Benefit) are eligible.
• The Government of British Columbia also intends to make a one-time special payment to individuals who receive the B.C. Climate Action Tax Credit, which will be paid in July 2020:
  • an adult will receive up to $218.00 (increased from $174.00); and
  • a child will receive $64.00 (increased from $51.00).
• Most debt collection activities are suspended until further notice. Provincial staff are available to assist taxpayers to arrange flexible payment options.

Manitoba Tax Measures

On March 22 and April 3, 2020, the Government of Manitoba announced the following tax measures:

Measures for businesses

• April and May filing deadlines for small and medium-sized businesses with remittances of $10,000 or less are extended by two months, thus providing these businesses extra time to remit PST (retail sales tax) and payroll tax (Health and Post Secondary Education Tax Levy).
• The Department of Finance and Taxation will consider flexible repayment options for businesses with remittances of more than $10,000.
• The deadline for filing provincial tax returns and paying any amounts due is extended to August 31, 2020. The Government of Manitoba is willing to extend this date until October 1, 2020, if the federal government agrees with the measure.

Measures for individuals

• The deadline for filing provincial tax returns and paying any amounts due is extended to August 31, 2020. The Government of Manitoba is willing to extend this date until October 1, 2020, if the federal government agrees with the measure.
• The Government of Manitoba is working with municipal partners to ensure municipalities do not charge interest on provincial education taxes and school division fees. The province is encouraging municipalities to do the same with respect to municipal taxes.

Other measures

• In person service at the Taxation Division Offices is not available. Services are continuing by telephone and online.

New Brunswick Tax Measures

The Government of New Brunswick announced the following tax measures:

Measures for businesses

• Business property taxes must be paid by May 31, 2020. However, late penalties will be reviewed on a case-by-case basis and may be waived as a result of undue financial difficulty, including closing the business due to COVID-19.
• WorkSafeNB announced on March 20, 2020, that assessment premiums related to employer payrolls for February, March and April will be deferred for three months without interest charges. This affects employers who pay their premiums on a monthly basis.

Newfoundland and Labrador Tax Measures

On April 7, 2020, the Government of Newfoundland and Labrador issued a Public Advisory extending tax return filing deadlines and remission of interest and penalties:

Measures for businesses

• The deadline to file and pay International Fuel Tax Agreement returns for the first quarter of 2020 (January 1, 2020, to March 31, 2020) ordinarily due on April 30, 2020, from interjurisdictional carriers, under section 8 of the Revenue Administration Regulations, is extended to June 1, 2020.
• The deadline to file all other tax returns under the Revenue Administration Act and Regulations (except tax returns required from interjurisdictional carriers), which would normally be due between March 20, 2020, and May 31, 2020, is extended to June 23, 2020, including:
  • Gasoline Tax
  • Carbon Tax
  • Health and Post-Secondary Education Tax
  • Insurance Companies Tax
  • Mining and Mineral Rights Tax
  • Tax on Insurance Premiums
  • Tobacco Tax
• Monthly filers have the option to extend the filing and remittance of tax amounts for the February, March and April 2020 reporting periods to June 23, 2020.
• Taxpayers that cannot make payments when due as a result of COVID-19 can submit a written request to the Department of Finance, Tax Administration Division, at taxadmin@gov.nl.ca for a remission of interest and penalties. Requests will be reviewed on a case-by-case basis.

On March 22, 2020, the Government of Newfoundland and Labrador issued a Public Advisory that in person tax administration services are temporarily suspended.

• Taxpayers may submit tax returns, applications and payments online, by email (taxreturn@gov.nl.ca for returns and taxadmin@gov.nl.ca for all other transactions), by post or by using the drop-off box.
• Telephone lines are open to set up electronic funds transfer, wire payment, or e-file payment options (709-729-6297 or toll free 1-877-729-6376).

Northwest Territories Tax Measures

On March 20, 2020, the Government of the Northwest Territories ("GNWT") announced the following tax measures:

Measures for businesses

• GNWT has paused most collection efforts to provide small businesses and individuals with access to greater cash flow, including outside collection agency activity, GNWT set-offs on GNWT payments, GNWT set-offs on Canada Revenue Agency tax refunds.

Measures for individuals

• GNWT has paused most collection efforts to provide small businesses and individuals with access to greater cash flow, including outside collection agency activity, GNWT set-offs on GNWT payments, GNWT set-offs on Canada Revenue Agency tax refunds.
• Funding for the normal-course Income Assistance Program has been increased.

Nova Scotia Tax Measures

Between March 20 and 27, 2020, Premier Stephen McNeil announced the following tax measures:

Measures for businesses

• Payments on all government loans and small business fees (including business renewal fees and workers compensation premiums) are deferred until June 30, 2020.

Measures for individuals

• Employees and self-employed workers who have been laid off or lost their jobs and earnings due to COVID-19, but are not eligible for EI, may be eligible for the Worker Emergency Bridge. The Worker Emergency Bridge is a one-time $1,000 payment for individuals who earn an annual income between $5,000 and $34,000 and have applied or plan to apply for CERB.

Ontario Tax Measures

On March 25, 2020, the Government of Ontario released Responding to COVID-19 (March 2020 Economic and Fiscal Update), which will make $10 billion available to support individuals and businesses through tax and other deferrals:

Measures for business

• Businesses will benefit from five months of interest and penalty relief in relation to filing and making payments for the majority of provincially administered taxes.
• Upcoming June 30 quarterly municipal remittance of education property tax to school boards is deferred by 90 days.
• Employers may defer payments to the Workplace Safety and Insurance Board ("WSIB") for up to six months.
• The Employer Health Tax ("EHT") exemption will be increased to cut taxes by $355 million for approximately 57,000 employers.
• The Regional Opportunities Investment Tax Credit provides a 10% refundable tax credit for capital investments in regional development. This tax credit can be claimed upon completing the annual tax return.
  • Eligible corporations are Canadian-controlled private corporations that make qualifying investments in capital property that become available for use in certain regions of Ontario on or after March 25, 2020.
  • Eligible capital property is "available for use" in the taxation year in which a taxpayer can begin claiming capital cost allowance for depreciable property under the ITA.
  • Qualifying investments include expenditures for building, renovating or acquiring eligible commercial and industrial buildings and other property. More specifically, eligible investments are eligible expenditures in respect of Class 1 and Class 6 capital property for the purpose of calculating capital cost allowance.
  • The credit applies to expenses over $50,000, up to a maximum of $500,000.

Measures for individuals

• Upcoming June 30 quarterly municipal remittance of education property tax to school boards is deferred by 90 days.
• Ontario is doubling its monthly Ontario Guaranteed Annual Income System ("GAINS") payments to seniors, to a maximum of $166 per month for individuals and $332 per month for couples. This measure begins on April 24, 2020, and continues automatically for six months.

Prince Edward Island Tax Measures

The Government of Prince Edward Island ("PEI") announced the following measures:

Measures for businesses

• Registered private sector businesses or non-profit organizations where employees' hours have been reduced at least 8 hours per week during the period from March 16, 2020, to March 29, 2020, are eligible for the Emergency Relief - Worker Assistance Program. The program provides up to $250 per week for each employee. Online application can be submitted until April 15, 2020. Workers who have been laid off are not eligible.
• Property tax relief measures include:
  • Deferring provincial property tax and fee payments until December 31, 2020;
  • Extending property assessment appeal deadlines for assessment year 2020 to December 31, 2020;
  • Providing interest relief for tax year 2020, including all past due amounts;
  • Suspending tax sale processes for the remainder of 2020; and
  • Delaying mailing of provincial tax bills for 2020 until June.

Measures for individuals

• An Emergency Income Relief Fund provides up to $500 per week for the period from March 16, 2020, to March 29, 2020, to self-employed individuals affected by COVID-19. Eligible criteria require that the self-employed individual:
  • declared business income on their most recent tax return;
  • earn business income as the primary source of income;
  • can demonstrate direct financial losses from COVID -19 isolation measures at the time of application; and
  • is not eligible for EI or other income support.
• Property tax relief measures include:
  • Deferring provincial property tax and fee payments until December 31, 2020;
  • Extending property assessment appeal deadlines for assessment year 2020 to December 31, 2020;
  • Providing interest relief for tax year 2020, including all past due amounts;
  • Suspending tax sale processes for the remainder of 2020; and
  • Delaying mailing of provincial tax bills for 2020 until June.

Quebec Tax Measures

The Government of Quebec announced its own relief measures in response to the COVID-19 pandemic: Bulletins 2020-3, 2020-4 and 2020-5, a March 18th Press Release ("March 18 PR"), a March 19th Press Release ("March 19 PR"), a March 27th Press Release ("March 27 PR") as well as an April 9^th Press Release ("April 9 PR").

Measures for corporations

• The payment of tax instalments and the balance of tax otherwise due between March 18, 2020, and September 1, 2020, will be postponed to September 1, 2020.
• The Concerted Actions Program for the Maintenance in Employment ("PACME") provides subsidies to businesses (and certain independent contractors) for training costs to implement good human resource management practices and optimize business efficacy and operations. Eligible training activities include:
  • Basic employee training;
  • Computer and other electronic skills;
  • Continuing education related to the business' operations;
  • Training recommended by professional associations;
  • Training that has become necessary to resume business operations;
  • Training related to a strategy to adjust or modify business operations in order to maintain or diversify operations in the context of economic uncertainty as a result of COVID-19; etc.

A wide variety of expenses qualify as "allowable expenses", including the salary of workers in training (excluding social security contributions) up to $25/hour, professional consultant or supplier fees up to $150/hour, registration fees related to the use of a platform, etc.

This program can be combined with other measures announced by the federal or provincial government during the period (i.e. from April 6, 2020, to September 30, 2020 or until the budget envelope of $100 million is exhausted). It provides for the reimbursement of "eligible expenses" of business training projects, which corresponds to 100% of expenses equaling $100,000 or less and 50% of expenses equaling between $100,000 and $500,000. "Eligible expenses" are:

• Complete reimbursement of payroll expenditures for workers in training if the company has not received any federal wage subsidy (CEWS or 10% temporary subsidy) or partial reimbursement if the company has received a wage subsidy;
• Reimbursement up to 100% of training expenses, related costs and costs related to human resources management activities, according to the relevant scales (e.g. professional fees).

Measures for trusts 

• The deadline for trusts, other than a testamentary trust subject to progressive rate taxation, but including specified investment flow-through ("SIFT") trusts, to file income tax returns is extended from March 30, 2020, to May 1, 2020.  
• The deadline for filing the tax return of a testamentary trust subject to progressive rate taxation whose taxation year ends in 2019, and whose filing due date would otherwise be after March 16, 2020, is postponed to May 1, 2020.
• The deadline for a trust (other than a SIFT) to pay any balance of tax due no later than March 30, 2020, for the 2019 taxation year will be postponed to September 1, 2020.
• The payment of tax instalments and the balance of tax otherwise due by SIFTs between March 17, 2020, and September 1, 2020, will be postponed to September 1, 2020.

Measures for individuals 

• The deadline to file an income tax return is postponed to June 1, 2020, for individuals whose tax return filing-due date, for the 2019 taxation year, would otherwise be April 30, 2020. 
• The deadline for filing an income tax return for the 2019 taxation year of an individual who died in that year, but before December 1, 2019, is postponed to June 1, 2020.
• The deadline for filing an income tax return for individuals who carried on a business in 2019, or whose spouse carried on business, remains June 15, 2020.
• The deadline to pay (i) any balance of tax due, and/or (ii) Québec Pension Plan, Québec Parental Insurance Plan, Health Service Fund, and Québec drug insurance plan contributions for the 2019 taxation year is postponed to September 1, 2020.
• The deadline to make instalment payments for the 2020 taxation year will be postponed to September 1, 2020.
• The minimum withdrawal by annuitants from their RRIFs is reduced by 25% for 2020.
• The Quebec Temporary Aid for Workers Program ("PATT") granted a lump sum of $573 per week to eligible workers for a period of 14 days of isolation. The PATT ended on April 10, 2020, following the commencement of the federal CERB.
• The Incentive Program to Retain Essential Workers ("IPREW") provides $100 per week for up to 16 weeks to eligible essential workers, retroactive to March 15, 2020. Workers receiving the IPREW cannot receive the federal CERB for the same week. However, workers are still eligible if their employer receives the CEWS. Online applications are open from May 19, 2020, to November 15, 2020, and the first payment will be made on May 27, 2020. Payments cannot be used to offset outstanding debt with Revenu Québec. Where a worker makes a fraudulent claim, Revenu Québec may recover any amounts paid and apply a penalty equal to 50% of the total amount. Workers eligible for the IPREW include part-time or full-time workers in an essential service sector, who:
• • earn gross wages of $550 or less per week;
  • have an annual employment income of at least $5,000 for 2020;
  • have a total annual income of no more than $28,600 for 2020;
  • are at least 15 years old upon application; and
  • were resident in Quebec on December 31, 2019, and plan to reside in Québec throughout 2020.
• Requests or renewals of advanced payments from the tax credit for home-support services for seniors that would otherwise be filed between March 17, 2020, and June 1, 2020, are granted an extra four months from the renewal date to make the request. Current payments are maintained in the meantime.
• Deadlines to submit renewal requests to the Housing Allowance Program ("PAL") are extended by 2 months to a deadline no later than December 1, 2020.
• As a temporary measure, beginning in May 2020, payments of the solidarity tax credit will generally no longer be used to repay debts. This measure does not apply to support debts. The end date for this measure will be determined over the next few months.

Despite the extension of the filing deadline, individuals should file their income tax return as soon as possible if they expect to receive an income tax refund. 

Measures for partnerships 

• Partnerships that had to file a form TP-600-V, Partnership Information Return, for 2019 by March 31, 2020, now have until May 1, 2020, to file the return if all members of the partnership are individuals.
• Partnerships in which all members are corporations must file the Information Return within five months of the end of the fiscal year. Where the deadline would otherwise fall between March 16, 2020, and May 1, 2020, the date is postponed to May 1, 2020.
• In any other situation, the 2019 return must be filed by May 1, 2020, or the last day of the fifth month following the end of the fiscal year, whichever comes first. But if the last day of the fifth month is after March 16, 2020, the deadline for filing is May 1, 2020.
• The payment of tax instalments and the balance of tax otherwise due by specified investment flow-through partnerships between March 17, 2020, and September 1, 2020, will be postponed to September 1, 2020.

Measures for charities

• A registered charity whose Information Return for Registered Charities and Other Donees (form TP-985.22) is due between March 17, 2020, and December 30, 2020, may file by December 31, 2020.

Measures for QST registrants, tax on lodging and other measures

On March 27, 2020, the Government of Quebec announced that it would allow registrants to defer until June 30, 2020, the filing of QST returns and corresponding QST payments, where appropriate, for all QST returns that must be filed between March 27, 2020, and June 1st, 2020, without interest or penalties. This measure is in line with the GST/HST measure announced by the Government of Canada.

In addition, the Government of Quebec will accelerate the processing of requests for tax credits intended for businesses and tax refunds. Through the new measures, the government is adding $7.3 billion to companies' liquid assets in the coming months for the postponement of the QST payment and more than $600 million in accelerated payments of tax credits.

On April 9, 2020, the Government of Quebec announced that the deadline to report and remit tax on lodging for the first calendar quarter of 2020, otherwise due by April 30, 2020, is extended to July 31, 2020. As a result, registered persons for this tax will generally be required to file two returns on or before July 31, 2020 (one for the first calendar quarter of 2020, and one for the second calendar quarter).

As of April 20, 2020, no measures have been announced regarding other taxes such as:

• The tax on alcoholic beverages;
• The tax on insurance premiums;
• The specific duty on new tires;
• The municipal tax for 9-1-1 services;
• The fuel tax; and
• The tobacco tax.

Other measures 

To limit in-person contact, Revenu Québec will allow tax preparers to use an electronic signature on certain forms. The forms in question are form TP-1000.TE-V (Online Filing of the Personal Income Tax Return by an Accredited Person), form MR-69-V and form CO-1000.TE (Online Filing of the Corporation Income Tax Return by an Accredited Person). The information sessions usually broadcast in person to individuals and businesses, and the support program for small and medium-sized businesses, are now offered by telephone.

Revenu Québec has also has issued the following relief measures regarding audit and collection activities, objection, and appeals.

• Audits and collections: Audits and collection activities are being limited. Concerning collection measures, Revenu Québec has indicated that it will be amenable, on a case-by-case basis, to extending payment agreements.
• Objection: Deadlines for objections to reassessments are extended, such that the expiration of any 90-day period that falls between March 13, 2020, and June 29, 2020, is postponed to June 30, 2020.
• Appeals: deadlines are suspended from March 15, 2020, until the end of the COVID state of emergency. This applies to the following procedural matters:
  • Appeals of assessments brought to the Court of Quebec;
  • Summary appeals to the Small Claims Division of the Court of Quebec;
  • Requests for review of a decision of the Minister of Revenue refusing to extend the time for filing an objection;
  • Requests to extend the time to file an appeal or a summary appeal.
• Collection: Revenu Québec grants a release of garnishments on current bank accounts for tax debt. On March 17, 2020, Revenu Québec ceased sending employers income seizure by garnishment notices and formal requests to pay as part of its tax debt collection. Effective April 17, 2020, existing garnishments and requests to pay are suspended until further notice. As a result, employers do not have to withhold or remit these amounts unless otherwise instructed. This temporary suspension does not apply to garnishments for support payments.

Revenue Québec is postponing administrative tax filing deadlines (other than returns with specific postponement dates listed above) that fall between March 17, 2020, and May 31, 2020, to June 1, 2020. This postponement applies to the following non-exhaustive list:

• corporate income statement;
• mining tax return;
• Quebec tax laws or regulations election such as a rollover (except QST choices that are harmonized with GST);
• tax credit application (12 month deadline);
• request for reimbursement of fuel taxes;
• response to requests for information from Revenu Québec;
• mandatory or preventive aggressive tax planning ("ATP") disclosure;
• Quebec education savings incentive ("QESI") request (90-day deadline).

In addition, the deadline to remit any unclaimed property to the Minister of Revenue, which corresponds to the end of the first quarter following the end of the fiscal year in which the property has become unreported, is postponed to August 31, 2020. No late payment interest or penalties in respect of property which has become unclaimed during a fiscal year ending between December 17, 2019, and May 30, 2020, will accrue as long as the property is remitted to Revenu Québec before September 1, 2020. The 10-year limitation period for remitting amounts less than $ 500 to the Minister of Finance is suspended until the expiration of the COVID state of emergency. The following activities related to processing new unclaimed property are temporarily suspended until the health emergency is lifted: processing unclaimed property, maintaining the register of unclaimed property, searching for right-holders and liquidating unclaimed successions already entrusted to Revenu Québec, as well as the 10-year limit for recovering amounts less than $500 from the Minister of Finance.

Employers who can benefit from the CEWS and maintain an establishment in Quebec will receive a credit on their contribution to the Health Services Fund for a period of up to twelve weeks, retroactive to March 15, 2020. The amount of the credit is equal to the total amount of the employer's contribution to the Health Services Fund in respect to wages paid to employees on paid leave due to COVID-19. The qualifying periods for the credit mirror the CEWS qualifying periods:

• March 15, 2020, to April 11, 2020;
• April 12, 2020, to May 9, 2020;
• May 10, 2020, to June 6, 2020.

The application for credit must be submitted to Revenu Québec when the employer submits the Summary of Source Deductions and Employer Contributions for 2020 (RLZ-1.S and RLZ-1.ST), for the 2020. As of May 1, 2020, an employer can reduce the amount of it's periodic payment to Revenu Québec for its Health Services Fund contribution, which is attributable to a specified wage that it has paid, allocated, granted or awarded prior to the time of the periodic payment and which has not reduced another periodic payment.

According to Revenue Quebec, employees can deduct employment expenses related to working from home as long as their employer does not reimburse them. These expenses include supplies, such as paper, pencils and ink cartridges, internet fees, provided they are billed according to use; expenses relating to a home office space where employment activities are carried out more than 50% of the time, including heating, electricity, cleaning products, lighting accessories and minor repairs. An employee who is a tenant can deduct a reasonable part of the rent related to the home office space. However, an employee who is an owner cannot deduct an amount for the rental value of the home workspace. Employees can deduct these employment expenses in their 2020 income tax returns by filing  form TP-59-V  (Employment Expenses of Salaried Employees and Employees Who Earn Commissions) or a detailed statement of expenses as well as form TP-64.3 (General Employment Conditions) completed by the employer.

Saskatchewan Tax Measures

On March 20, 2020, Premier Scott Moe announced the following tax measures:

Measures for businesses

• As described in Information Bulletin IN 2020-03, businesses directly impacted by COVID-19 that are unable to file their PST returns and remit by the due date because of cash flow concerns will be relieved from any interest or penalties that would otherwise apply to such late filings, for the following periods:
  • Monthly filers may defer payment of amounts due for the February, March and April 2020 reporting periods to July 31, 2020.
  • Quarterly filers may defer payment of amounts due for the January 1, 2020, to March 31, 2020, reporting period to July 31, 2020.

• Despite this relief, the Government of Saskatchewan encourages taxpayers to file their tax returns each month/quarter (with or without payment) if they are able to do so.
• Contrary to previous announcements, businesses will not be required to submit a request for relief from penalty and interest charges for these returns. However, full payment or a payment arrangement must be in place by July 31, 2020, in order to qualify for the automatic deferral and waiver of penalty and interest. Such payment arrangements may be made by submitting electronically through the Saskatchewan eTax Service ("SETS") located at saskatchewan.ca, or by email (sasktaxinfo@gov.sk.ca) or at the following address: Ministry of Finance (Revenue Division), PO Box 200, Regina, SK, S4P 2Z6.

• In addition, at the time of publication, relief is not provided in relation to other type of taxes.

• A one-time grant for small businesses of less than 500 employees equal to 15% of monthly sales revenue in either April 2019 or February 2020, up to a maximum of $5,000. Eligible businesses must have been carrying on business in Saskatchewan on February 29, 2020, and had to close or significantly reduce their operations due to a COVID-19 public health order. Business must attest that they experienced a loss in revenue due to the public health order; they plan to reopen upon cancellation of the order; and they have not received payments from other sources other than amounts from other government assistance programs. Applications close on July 31, 2020.

• Audit program and compliance activities have been suspended so businesses can prioritize the health and safety of customers and staff, conserve resources and reduce audit travel.
• The Saskatchewan Worker's Compensation Board is waiving penalties for late payment of premiums from April 1, 2020, to June 30, 2020, and is forgiving interest and penalties for late payments applied in the month of March 2020.
• A single window information webpage will be established for businesses to access information and receive timely updates on provincial support initiatives. A Business Response Team, led by the Ministry of Trade and Export Development, will work with businesses to identify program supports relevant to particular businesses.

Measures for individuals

• The Self-Isolation Support Program will provide $450 per week, for a maximum of two weeks or $900 to Saskatchewan residents forced to self-isolate, who are not covered by the federal plan or other supports. Eligibility criteria are:
  • they have contracted COVID-19 or are showing symptoms;
  • they have been in contact with an infected individual;
  • they have recently returned from international travel and must self-isolate;

AND

• they are not eligible for compensation from their employer such as sick leave or vacation;
• they do not have private insurance covering such matters;
• they are not covered by federal programs.

Yukon Tax Measures

The Government of Yukon announced the following measures:

Measures for businesses

• Employers can apply for the Paid Sick Leave Rebate to pay up to $378.13 per day per employee for ten business days for employees who take sick days or self-isolate. The funding is only accessible once all existing regular paid sick leave for the employee is used. Employers can only access the program once per employee. To be eligible, the employer must:
  • have an office with a physical address in Yukon;
  • be subject to the Yukon Income Tax Act;
  • be registered as per the Business Corporations Act or the Partnership and Business Name Act, where applicable;
  • have a valid municipal business licence where applicable.
• Businesses can also apply for a grant (non-repayable) to pay certain fixed costs through the Yukon Business Relief Program. The program is aimed at businesses in the Yukon Territory, including home-based businesses, whose sales have decreased by at least 30% due to the COVID-19 pandemic. To be eligible, a business must meet at least three of the following criteria:
  • have an office with a physical address in the Yukon;
  • be subject to the Yukon Income Tax Act;
  • be registered under the Business Corporations Act or the Partnership and Business Name Act, where applicable; and
  • hold a valid municipal business license, where applicable.

The grant amount equals 75% to 100% of the fixed costs of eligible businesses up to monthly maximum of $30,000. The program covers eligible costs incurred between March 23, 2020, and May 22, 2020. Applications are accepted until June 30, 2020. "Eligible fixed costs" are:

• commercial rent or lease;
• water, sewage and waste disposal;
• electricity and heating fuel;
• telephone, cable, internet and satellite;
• software, data services, and subscriptions;
• business insurance; and
• pest control.

For home-based businesses, business-use-of-home expenses are eligible, equal to the portion of mortgage interest or rent accepted by the CRA as attributable to the operation of the business.

Costs not listed under "eligible fixed costs", mortgage principal payments for home-based businesses, and costs already covered by insurance are ineligible.

Measures for individuals

The Paid Sick Leave Rebate provides up to $378.13 per day for ten business days to employees and self-employed workers who contract COVID-19 or are required to self-isolate. The program is available from March 11, 2020, to September 11, 2020. Applicants can only access the program once.

Originally published Apr 22, 2020.

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