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Benefits payments for an additional three months

Ottawa: Finance Minister Bill Morneau yesterday announced that the Government of Canada will extend the Canada Emergency Wage Subsidy (CEWS) by an additional 12 weeks to August 29, 2020.
The Government will consult with key business and labour representatives over the next month on potential adjustments to the program, said a government media release.Also yesterday, Diane Lebouthillier, Minister of National Revenue, announced that benefit payments will continue for an additional three months for those who are not able to file their 2019 returns on time.

Eligible Canadians who are presently receiving the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit and/or the Canada child benefit (CCB) will continue to receive these payments until the end of September 2020.

CEWS eligibility extended

Meanwhile, Minister Morneau also announced the approval of regulations to extend eligibility for the CEWS to ensure that it continues to support those employers and workers hardest hit by the Covid-19 pandemic, and protects the jobs Canadians depend on. These regulations extend eligibility for the CEWS to the following groups:

  • Partnerships that are up to 50-per-cent owned by non-eligible members;
  • Indigenous government-owned corporations that are carrying on a business, as well as partnerships where the partners are Indigenous governments and eligible employers;
  • Registered Canadian Amateur Athletic Associations;
  • Registered Journalism Organizations; and
  • Non-public colleges and schools, including institutions that offer specialized services, such as arts schools, driving schools, language schools or flight schools.

The government also intends to propose legislative amendments to ensure that the CEWS continues to meet its objectives. These proposed amendments would:

  • Provide flexibility for employers of existing employees who were not regularly employed in early 2020, such as seasonal employees;
  • Ensure that the CEWS applies appropriately to corporations formed on the amalgamation of two predecessor corporations and
  • Better align the treatment of trusts and corporations for the purpose of determining CEWS eligibility.

CEWS Quick Facts

  • The government has taken action to support Canadian businesses through the outbreak of Covid-19, with targeted new initiatives that:
    • Extend the maximum duration of the Work-Sharing program, from 38 weeks to 76 weeks, for workers who agree to reduce their normal working hours because of developments beyond the control of their employers.
    • Introduce, in the second half of May, the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses to provide a forgivable loan to eligible commercial property owners, who in turn give a rent reduction of at least 75 per cent for April (retroactive), May, and June to impacted small business tenants who have experienced at least a 70 per cent drop in pre-Covid-19 revenues.
    • Launch the Canada Emergency Wage Subsidy calculator to support employers as they prepare to apply for the CEWS. On April 27, 2020, the Canada Revenue Agency launched the application process for the CEWS.
    • Provide support to businesses through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) under the Business Credit Availability Program (BCAP). As part of this program, EDC and BDC will provide direct lending and other types of financial support at market rates to otherwise viable businesses and organizations whose access to financing would otherwise be restricted. By working in close cooperation with financial institutions, this program is filling gaps in market access and leveraging additional lending by private sector institutions. Employers with a total payroll of $20,000 to $1.5 million in 2019 will also be eligible to access the Canada Emergency Business Account, which will provide interest-free, partially forgivable loans of up to $40,000 to small businesses, including not-for-profits.
    • Allow businesses, including self-employed individuals, to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments, as well as customs duty payments owed for imports, until June. This measure is the equivalent of providing up to $30 billion in interest-free loans to Canadian businesses. It will help businesses so they can continue to pay their employees and their bills, and help ease cash-flow challenges across the country.
    • Defer the payment of income taxes. The government is allowing taxpayers to defer, until after August 31, 2020, the payment of income tax amounts that become owing on or after March 18 and before September 2020. This relief, amounting to $55 billion in liquidity support, would apply to new 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.

Tax deadline extended

As previously announced as part of Canada’s Covid-19 Economic Response Plan, the tax filing deadline has been extended from April 30 to June 1, 2020.

The Canada Revenue Agency (CRA) expects many Canadians will need to take advantage of the extended deadline. Therefore, if the 2019 tax return is not assessed, and to allow time to calculate benefits and/or credits for the July to September 2020 payments, payment amounts will be based on information from 2018 tax returns.

If 2019 tax returns are not received and assessed by early September 2020, estimated benefits and/or credits will stop in October 2020 and the taxpayer will have to repay the estimated amounts that were issued as of July 2020.

The CRA encourages Canadians to file their tax returns by June 1, 2020 or as soon as possible in order to receive the right amount of benefits based on their 2019 tax return, and in order to ensure continuity of benefits beyond September 2020. The CRA has helpful information and a step-by-step guide to help Canadians complete their taxes.

To help file taxes, free virtual clinics will be offered by local organizations, in partnership with the CRA’s Community Volunteer Income Tax Program (CVITP) and the joint CRA and Revenu Québec Income Tax Assistance – Volunteer Program.

These clinics will be held on an interim basis to help those with low and modest incomes and a simple tax situation who are looking for support during tax season.

Tax Quick Facts

  • Benefits payments starting in July 2020 and those scheduled for August and September won’t be interrupted for those who are presently receiving the GST/HST credit and/or the CCB.
  • The CRA is currently processing paper returns. However, due to the reduced staff onsite to support physical distancing in all of our offices, Canadians that have filed a 2019 tax year paper return can expect significant delays in processing their return. To assist with these delays, the CRA will allow these Canadians the option to also file a 2019 return electronically. This is a temporary measure which started on April 20, 2020.
  • Penalties and interest will not be charged if payments are made by the extended deadline of September 1, 2020.
  • On May 12, Minister Lebouthillier announced that free virtual clinics will be held on an interim basis to help those with low and modest incomes and a simple tax situation who are looking for support during tax season.
  • Virtual clinics will have new flexibility to receive and authenticate documents in a variety of ways, including allowing the use of video communication.
  • As announced on May 12, the government is temporarily extending Guaranteed Income Supplement (GIS) and Allowance payments if seniors’ 2019 income information has not been assessed. This will ensure that the most vulnerable seniors continue to receive their benefits when they need them the most.

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