Peter Wiesner, CPA, CA Licensed Public Accountant Copyright @ 2020
March 31, 2020
This afternoon, the Federal Finance Minister announced at 2:40pm that details concerning the recent "75% wage subsidy for businesses" will be postponed, until tomorrow.
I will continue to follow these announcements closely, and will update when details are available.
March 30, 2020
Businesses and non-profit organizations seeing a drop of at least 30 per cent in revenue due to COVID-19 will qualify for the government's 75 per cent wage subsidy program, Prime Minister Justin Trudeau announced today — adding that "serious consequences" await those who abuse the system. The number of people a business employs will not determine its eligibility. Charities and companies big and small will qualify. For those companies experiencing a decrease in revenues of at least 30 per cent, the government will cover up to 75 per cent of a salary on the first $58,700, which could mean payments of up to $847 a week. The wage subsidies will be retroactive to March 15, 2020. More details of the program will be unveiled tomorrow by Finance Minister Bill Morneau.
Stay tuned as the details are critical to making business decisions from duration time this will be paid, any limit by employee, and will they have company or associated companies limits. None of that detail has been provided. Also, 30% decline in the 90 day period in sales? How does one estimate this now?
March 29, 2020
The federal government announced additional extensions to many tax-related deadlines. Most federal tax filing deadlines have been extended to June 1, 2020, including the March 31 deadline for T1134 forms and T2s. The filing deadline for the T5013 partnership return and other information that individuals will need to complete their T1 returns has been extended to May 1, 2020. The deadline for most T1 returns remains June 1, 2020.
Note that some returns and payments will still be due at the usual time.
GST deferral – Generally, GST/HST remittances can now be deferred until June 30, 2020. Deferrals will similarly be available for customs duty and sales taxes for importers. It is unclear whether GST/HST returns will have to be filed while the deferral is in effect and we are following up with the government.
Objections - For any objection request due March 18 or later, the deadline is effectively extended until June 30, 2020.
T1135 - Note that the deadline for the T1135 form is the taxpayer’s filing due date, so the T1135 deadline for individuals and trusts eligible for a filing extension will be the same as the revised due date.
March 27, 2020
OTTAWA - The federal government is increasing a payroll subsidy to small business to thwart layoffs due to COVID-19.
Prime Minister Justin Trudeau says the government will now cover up to 75 per cent of salaries, a major increase over the original 10 per cent subsidy plan.
It’s not clear at this time what the details are on that subsidy, including whether it will have a capped amount or an end date, but Trudeau said more details should be released on Monday March 30, 2020.
The subsidy will be retroactive to mid-March and is part of a suite of small business measures being rolled out today.
Also, provide $40,000 1 year interest-free loans with a $10,000 potential grant provision so if a business repays the loan by the end of 2022, 25 per cent of the loan would be forgiven,
and waive GST remittances until June for small business.
March 26, 2020
While the ERP describes the payments as support for those who are infected, in isolation, are caring for a family member who is sick, or are required to care for children due to school closures but are not eligible for EI sickness benefits, a March 25, 2020 Department of Finance update notes that it is also now available for: workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work; and wage earners and self-employed individuals, including contract workers, who are not eligible for conventional EI benefits.
The legislation requires the applicant to be an “eligible worker”, which means that they must be:
at least 15 years of age;
resident in Canada; and
for 2019 or in the 12-month period preceding the day on which they make an application had a total income of at least $5,000 from
certain EI benefits (maternity and parental benefits); and
allowances, money or other benefits paid to the person under a provincial plan because of pregnancy or in respect of the care by the person of one or more of their new-born children or one or more children placed with them for the purpose of adoption.
The worker, whether employed or self-employed, must cease to work for reasons related to COVID-19 for at least 14 consecutive days within the four-week period in respect of which they apply for the payment.
For the period of cessation of work, the applicant cannot receive income from the sources listed above, and cannot receive any other EI benefits. Further, workers that quit voluntarily are not eligible.
These income support payments can be made for a maximum of 16 weeks (previously noted as 15 weeks in the ERP). Amounts are determined by the Minister. Further, up to $2,000 would be provided per month (previously announced as up to $900 biweekly). These payments are not subject to law relating to bankruptcy or insolvency and are not garnishable.
A worker may apply for an income support payment for any four-week period falling within the period beginning on March 15, 2020 and ending on October 3, 2020 (payments are made every four weeks). Canadians would begin to receive their payments within 10 days of application. The rest of the application process has not yet been announced but will be made available in the first week of April, 2020.
The legislation does not exclude shareholders or their family members as long as they meet the income requirements.
In order to be eligible, the employer must meet three criteria:
employ one or more individuals in Canada (“eligible employees”);
was registered, with a business number and a payroll remittance account, on March 18, 2020; and
be any of the following:
most Canadian-controlled private corporations (CCPCs), based on eligibility for the small business deduction (see below);
an individual (other than a trust);
a partnership, all members of which are entities described in (i), (ii), (iii) or (v) (it is not clear why (iv) is excluded);
a non-profit organization (exempt from income tax pursuant to Subsection 149(1)(l)); or
a registered charity.
Eligibility for a CCPC requires that the CCPC had a business limit, for purposes of the small business deduction, greater than nil for its most recent tax year ended prior to March 18, 2020 (or, if it has no taxation year ended before that date, would have a business limit greater than nil if its taxation year ended on March 17, 2020).
For this purpose, the reduction to the business limit caused by passive income (“Adjusted Aggregate Investment Income”) is not considered. However, a CCPC which had no business limit for other reasons (for example, its taxable capital, in combination with other associated corporations exceeded $15 million; it was a member of an associated group of corporations and was not assigned any portion of the business limit; or it assigned its entire business limit to one or more other CCPCs under the specific corporate income rules) would not qualify for the subsidy.
A portion of remuneration (e.g. wages, salaries) paid to employees from March 18, 2020 to June 19, 2020, inclusive, will be recoverable by the employer. The legislation indicates that several amounts determining the available subsidy will be prescribed by regulation, and those regulations are not in the draft legislation. The amounts in italics below are amounts that were announced in the ERP, and are expected to be formally set by regulations yet to be released.
The subsidy will be equal to the least of three amounts, as follows:
a fixed maximum for each employer of $25,000. CRA has indicated that this amount is per employer, and is not required to be shared between related or associated employers;
a fixed percentage, being 10%, of remuneration paid to eligible employees during the period from March 18, 2020 to June 19, 2020; or
the number of eligible employees employed during the period from March 18, 2020 to June 19, 2020, multiplied by a fixed amount, $1,375.
Therefore, to get the maximum benefit of $25,000, the employer must have more than 18 employees with total wages no less than $250,000 during the period.
No formal application process has been released. Any subsidy to which the employer is entitled is deemed to have been remitted as a payroll remittance for income taxes withheld from the employees’ remuneration. In other words, source deduction remittances for income tax, but not for CPP or EI, can be reduced for the available subsidy, providing an immediate cash flow benefit to the employer.
Presumably, there will be an eventual requirement to account for the subsidy claimed, possibly when T4 slips are prepared and filed in early 2021. However, no additional filings have been implemented to date.
The initial announcements did not include individuals or partnerships as employers eligible for this benefit, an exclusion which was the subject of considerable commentary. They are included in the legislation.
The legislation does not provide any exclusion for owners of the employer or persons related to the employer, so their remuneration should be eligible. Note, however, that a proprietor or partner is not an employee of their unincorporated business, so no subsidy would be available for their work.
On March 25, 2020, the Ontario government announced it is increasing the Employer Health Tax (EHT) exemption for 2020 from $490,000 to $1 million due to the special circumstances caused by the coronavirus (COVID-19) in Ontario.
This exemption increase will provide tax relief for businesses around the province so that they can focus on supporting the well-being of their employees and their continued operations during this time of uncertainty.
Retroactive to January 1, 2020, the EHT exemption is increasing from $490,000 to $1 million for the 2020 tax year. The EHT exemption will return to $490,000 on January 1, 2021.
Ontario has ordered all non-essential businesses to shut down in order to help prevent the spread of COVID-19.
Premier Doug Ford made the announcement Monday afternoon about a week after declaring a state of emergency in the province.
The order will come into effect on March 24 at midnight and will remain in place for at least two weeks.
A list of non-essential and essential businesses will be released by the government on Monday evening as follwos;
For the purposes of this order, businesses include any-for-profit, non-profit or other entity providing the goods and services described herein.
This does not preclude the provision of work and services by entities not on this list either online, by telephone or by mail/delivery.
Note that teleworking and online commerce are permitted at all times for all businesses.
1. Businesses that supply other essential businesses or essential services with the support, supplies, systems or services, including processing, packaging, distribution, delivery and maintenance necessary to operate;
Retail and Wholesaling
2. Businesses engaged in the retail and wholesale sale of food, pet food and supplies, and household consumer products necessary to maintain the safety, sanitation and essential operations of residences and businesses, including grocery stores, supermarkets, convenience stores, markets and other similar retailers;
3. Businesses that provide essential items for the health and welfare of animals, including feed, animal food, pet food and animal supplies including bedding;
4. Beer, wine and liquor stores and alcohol producers, and stores that sell beer and wine through arrangements with authorized providers; cannabis stores and cannabis producers;
5. Gas stations, diesel, propane and heating fuel providers including providers of motor vehicle, aircraft and water/marine craft fuels;
6. Motor vehicle, auto-supply, auto and motor-vehicle-repair, including bicycle repair, aircraft repair, heavy equipment repair, watercraft/marine craft repairs, car and truck dealerships and related facilities;
7. Hardware stores and stores that provide hardware products necessary to the essential operations of residences and businesses;
8. Business providing pharmaceuticals and pharmaceutical services, including pharmacies and dispensaries;
9. Businesses that supply office products and services, including providing computer products and related repair and maintenance services, for individuals working from home and for essential businesses;
10. Safety supply stores (for e.g. work clothes, Personal Protective Equipment);
Food Services and Accommodations
11. Restaurants and other food facilitiesthat prepare and serve food, but only for delivery or takeaway, together with food delivery services;
12. Hotels, motels, shared rental units and similar facilities, including student residences;
Institutional, Residential, Commercial and Industrial Maintenance
13. Businesses that provide support and maintenance services, including urgent repair, to maintain the safety, security, sanitation and essential operation of institutional, commercial industrial and residential properties and buildings, including, property management services,plumbers, electricians, custodial/janitorial workers, cleaning services, , security services, fire safety and sprinkler systems, building systems maintenance and repair technicians and engineers, mechanics, (e.g. HVAC, escalator and elevator technicians), and other service providers who provide similar services
Telecommunications and IT Infrastructure/Service Providers
14. Businesses engaged in providing or supporting Information Technology (IT) including online services, software products and related services, as well as the technical facilities such as data centres and other network facilities necessary for their operation and delivery;
15. Businesses providing telecommunications services (phone, internet, radio, cell phones etc) as well as support facilities such as call centres necessary for their operation and delivery;
16. Taxis and other private transportation providers providing transportation services necessary for activities of daily living;
17. Businesses and facilities that provide transportation services to businesses and individuals including by air, water, road, and rail including providing logistical support, distribution services, warehousing and storage, including truck stops and tow operators;
18. Businesses that provide materials and services for the operation, maintenance and safety of transportation systems (road, transit, rail, air and marine) including delivery of maintenance services such as clearing snow, response to collisions, and completing needed repairs to the transportation systems.
Manufacturing and Production
19. Businesses that extract, manufacture, process and distribute goods, products, equipment and materials, including businesses that manufacture inputs to other manufacturers (e.g. primary metal/ steel, blow molding, component manufacturers, chemicals, etc. that feed the end-product manufacturer);
20. Businesses, facilities and services that support and facilitate the two- way movement of essential goods within integrated North American and Global supply chains.
Agriculture and food production
21. Businesses that farm, harvest, process, manufacture, produce or distribute food, including beverages, crops, animal products and by-products, aquaculture, hunting and fishing;
22. Businesses that support the food supply chain including assembly yards, livestock auctions, food distribution hubs, feed mills, farm equipment suppliers, feed suppliers, food terminals and warehouses, animal slaughter plants and grain elevators;
23. Business that support the safety of food including animal and plant health and animal welfare;
24. Businesses that provide veterinary services, and that supply veterinary and animal control medications and related supplies and testing kits;
25. Businesses that help to ensure safe and effective waste management including deadstock, rendering, nutrient management, bio hazardous materials, green waste, packaging recycling;
26. Construction projects and services associated with the healthcare sector, including new facilities, expansions, renovations and conversion of spaces that could be repurposed for health care space;
27. Construction projects and services required to ensure safe and reliable operations of critical provincial infrastructure, including transit, transportation, energy and justice sectors beyond the day-to-day maintenance;
28. Construction work and services, including demolition services, in the industrial, commercial, institutional and residential sectors;
29. Construction work and services that supports health and safety environmental rehabilitation projects
30. Capital markets (e.g., the TSX);
31. Banking & Activities related to Credit Intermediation; credit unions;
33. Businesses that provide pension services and employee benefits services;
34. Businesses that provide financial services including payment processing, the payroll division of any employer (as defined by the Employment Standards Act/Occupational Health and Safety Act), any entity whose operation is the administration of payroll, banks and credit unions;
35. Businesses that ensure global continuity of supply of mining materials and products (e.g. metals such as copper, nickel and gold) and that support supply chains in Northern Ontario including;
a. Mining operations, production and processing;
b. Mineral exploration and development;
c. Mining Supply and Services that ssupport supply chains in the mining industry including maintenance of operations, health and safety.
36. Businesses that provide chemicals and gases to support the natural resource sector analytical labs and drinking water and wastewater sectors and other essential businesses;
37. Businesses that ensure global continuity of supply of forestry products (e.g. lumber, pulp, paper, wood fuel, etc.);
38. Businesses that ensure global continuity of supply of aggregates to support critical infrastructure repairs and emergency response requirements (e.g. sandbags, armour stone barriers, etc.);
39. Businesses that ensure global continuity of supply of petroleum and petroleum by-products;
40. Businesses that support environmental management/monitoring and spill clean-up and response, including environmental consulting firms, professional engineers and geoscientists, septics haulers, well drillers, pesticides applicators and exterminators, management of industrial sewage/effluent (eg for mining operations), and environmental laboratories;
Utilities and Community Services
41. Utilities, and Businesses that support the provision of utilities and community services, including by providing products, materials and services needed for the delivery of utilities and community services:
a. Waste Collection, Waste/ Sewage Treatment and Disposal, operation of landfills, and Hazardous Waste Disposal;
b. Potable drinking water;
c. Electricity Generation, transmission, distribution and storage;
d. Natural Gas distribution, transmission and storage,
e. Road construction and maintenance;
f. police, fire, emergency services including coroner services and pathology services ;
g. corrections and courts services;
h. other government services including licenses and permits;
42. Businesses engaged in or supporting the operation, maintenance and repair of critical infrastructure (railways, dams, bridges, highways, erosion control structures, etc.);
43. Newspaper publishers;
44. Radio & Television Broadcasting;
45. Telecommunications providers;
46. Businesses and organizations that maintain research facilities and engage in research, including medical research and other research and development activities;
47. Businesses that provide products and services that support research activities;
Health Care and Seniors Care and Social Services
48. Organizations and providers that deliver home care services;
49. Retirement homes;
50. Long-term Care Facilities;
51. Independent health facilities;
52. Laboratories and specimen collection centres;
53. Manufacturers, wholesalers, distributors and retailers of pharmaceutical products and medical supplies, including medications, medical isotopes, vaccines and antivirals; medical devices and medical supplies
54. Manufacturers, logistics and distributors of products and/or services that support the delivery of health care in all locations (including but not limited to hospitals, labs, long-term care homes, other residential health care, physicians, nurse practitioners and midwives, and home care services);
55. Businesses that provide products and/or services that support the health sector or that provide health services, including mental health and addictions and counselling supports.
56. Businesses that sell, rent or repair assistive/mobility/medical devices, aids and/or supplies.
57. Businesses that provide personal support services (many seniors and persons with disabilities, who can afford to, hire individuals to assist with the activities of daily living).
58. Health care professionals providing emergency care including dentists optometrists and physio-therapists;
59. Not-for-profit organizations that provide critical personal support services in home and also provide residential services for individuals with physical disabilities (such as the Centre for Independent Living and March of Dimes);
60. Businesses and all other organizations that support the provision of food, shelter, safety or protection, and/or social services and other necessities of life to economically disadvantaged and other vulnerable individuals, including but not limited to food banks, violence against women emergency shelters, homeless shelters, community housing, supportive housing, children's aid societies, residential services for adults with developmental disabilities and for children, and custody and detention programs for young persons in conflict with the law;
61. Professional and social services that support the legal and justice system;
62. Rental and leasing services, including automobile, commercial and light industrial machinery and equipment rental;
63. Businesses providing mailing, shipping, courier and delivery services, including post office boxes;
64. Laundromats, dry cleaners and laundry service providers;
65. Professional services including lawyers and para-legals, engineers, accountants, translators;
66. Businesses providing funeral, mortician, cremation, transfer, and burial services, and any related goods and products (such as coffins and embalming fluid);
67. Land registration services, and real estate agent services and moving services;
68. Businesses providing security services including private security guards; monitoring or surveillance equipment and services;
69. Businesses providing staffing services, including temporary help;
70. Businesses that support the safe operations of residences and essential businesses;
71. Businesses that provide for the health and welfare of animals, including veterinarians, farms, boarding kennels, stables, animal shelters, zoos, aquariums, research facilities and other service providers;
72. Child care services for essential workers, and home child care services of less than six children;
73. Businesses providing cheque cashing services;
Business Regulators and Inspectors
74. Organizations, including Administrative Authorities, that regulate and inspect businesses.
Canada Economic Stimulous $82 Billion - March 18th Release
The major new economic measures that the federal government is taking in response to COVID-19 include $27 billion in direct assistance to workers and families, as well as making $55 billion available in liquidity to businesses to help stabilize the economy.
As for what’s in the $55 billion being offered to stabilize the economy and boost consumer confidence:
This massive package is equal to three per cent of Canada's GDP.
The financial aid package includes ways to see money delivered directly into the hands of Canadians and their families; as well as new help for the country's hardest-hit sectors; and broader economic stimulus measures.
As for what's included in the $27 billion for families, aimed at relieving pressure to make rent and mortgage payments or paying for groceries:
In recognition of current volatile market conditions and its impact on many seniors’ retirement savings, the Government proposes to reduce the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.
CRA will defer the filing due date for the 2019 tax returns of individuals, including certain trusts. For individuals other than trusts, the return filing due date will be deferred until June 1, 2020. For trusts with a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020. It is assumed that the filing due dates for income tax elections (e.g. rollover elections) and information returns (e.g. Form T1135) that must be filed on a tax return filing due date is likewise deferred, although this was not specifically mentioned in the announcement.
The CRA will allow all taxpayers 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. This relief would apply to tax balances due, as well as instalments, under Part I of the federal Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
As a temporary administrative measure, the CRA will recognize electronic signatures in order to reduce the necessity for taxpayers and tax preparers to meet in person during this difficult time.
March 17, 2020 Tax Deadline Going to Be Extended 1 Month March 18th Announcement Coming
Source National Post
Canadians will have one extra month to file their taxes to the Canada Revenue Agency, the National Post has learned.
The announcement will be made tomorrow by federal ministers as part of a larger series of financial measures to assist Canadian individuals and governments through the COVID-19 pandemic.
So instead of an April 30 filing deadline for the 2020 tax season, Canadians will have until June 1 to submit their income tax return to CRA. The deadline to pay off any outstanding balances interest-free will also be extended, this time to July 31.
Businesses will also have more time to pay their taxes without paying any interest or penalties. The new deadline will be July 31 to pay any corporate taxes or make any scheduled instalment payments.
Tuesday, the Quebec government announced the exact same measures for the provincial tax authority, l’Agence du Revenu du Québec.
From CBC Toronto March 4, 2020
Ontario Budget March 25, 2020 (March 14, 2020) MPPs vote to suspend the legislature and the Ontario budget may be postponed
Ontario's next budget will be delivered March 25 and will provide the government an opportunity to reset its spending narrative. This may be postponed and stay tuned.
It will be the Progressive Conservative government's second budget, but Finance Minister Rod Phillips' first.
This government's first budget was widely panned by critics as cut after cut emerged in a near-daily stream in the weeks after the document was tabled. Then-finance minister Vic Fedeli was shuffled out of the portfolio not long after, replaced by Phillips.
Phillips said his budget will "stay the course" in terms of the government's plan to balance the budget by 2023 — a year after the next provincial election.
"It's prudent, measured and deliberate," Phillips said of the spending plan. "We made a conscious choice to balance the books by 2023 so that we could also make smart investments in critical items of public service — items like health care, education and infrastructure, like transit and roads."
Ontario's deficit currently stands at $9 billion.
The government's fall economic update told the story of the moves made to undo some of the damage from the last budget. The update showed an additional $1.3 billion in spending, much of it to fund backtracks on policy changes and cuts, including on its autism program, social services and child care, and public health funding to municipalities.
Health Minister Christine Elliott announced Tuesday that Ontario is creating a Mental Health and Addictions Centre of Excellence to oversee its revamp of the province's mental health system, with details to be provided in the upcoming budget.
Federal 2020 Budget Submission By CPA Canada - Which I am a Member
For the upcoming Federal Budget 2020 my association CPA Canada with 217,000 members has put these main proposals forward in August 2019 as follows;
Recommendations CPA Canada recommendations for accelerating Canada’s transition to a low-carbon, climate resilient and globally competitive economyThat the government:
1. Implement the recommendations of the Expert Panel on Sustainable Finance that are within federal jurisdiction, and encourage and support other jurisdictions and the private sector to do the same. Specifically: A. Map Canada’s long-term path to a low-carbon, climate-resilient economy in order to maintain forward momentum and provide policy certainty to Canadian business. B. Establish a Canadian centre for climate information to improve the availability and reliability of climate data to facilitate business decision-making.
2. Remain committed to the priorities identified in the Digital Charter, including the review and modernization of related legislation.
3. Undertake to do the following in response to the tax challenges of the digitalization of the economy: A. Change the GST rules so that non-resident vendors collect the tax on intangible property and services. B. Remain committed to and actively contribute to the OECD process to develop an agreed-upon, principles-based global framework for tax in a digitalized world.
4. Launch a comprehensive review of Canada’s tax system, led by an independent expert panel.
5. Work with provinces and territories to strengthen Canada’s anti-money laundering regime, including through consistent beneficial ownership requirements and a new national framework around whistleblowing in the private and public sectors.
6. Evaluate the various programs and initiatives to promote skills training to ensure they are achieving results and preparing Canadians with the skills needed for a cleaner, digital and globally integrated economy.
Hope you enjoyed these comments.
If any questions or comments arise, please let me know.
March 9, 2020
Federal Budget Date Announced March 30, 2020 -Budget Delayed
Budget day 2020 will be March 30, says Finance Minister Bill Morneau.
The unusual move to release the federal budget on a Monday — traditionally, it comes on Tuesdays — comes as the government grapples with the spread of COVID-19, the illness caused by the new coronavirus, in Canada. It has already spread to more than 120,000 people around the world and killed more than 4,000.
March 12, 2020
The House of Commons and Senate will suspend for five weeks after the fast-spreading coronavirus pandemic has caused multiple MPs to go into self-isolation,
Government House Leader Pablo Rodriguez tabled a motion on Friday to halt House business until April 20, 2020. It was agreed to unanimously by all parties.
The Senate agreed shortly after to adjourn until April 21 as a preventative measure against the spread of the coronavirus.
March 14, 2020