COVID-19 Update from Fulcrum Group

Canada Emergency Response Benefit (CERB)

The Government of Canada has just released the new Canada Emergency Response Benefit (CERB) for all Canadians unable to work as a result of Covid-19.

This replaces the previously discussed Emergency Care Benefit and the Emergency Support Benefit.

Key points include:

• $2000 per month for up to 4 months for workers who lose their income as a result of Covid-19
• Eligibility: If you are sick, quarantined, taking care of someone who is sick with Covid-19, are a working parent who must stay home without pay to care for children who are sick or at home because of school and daycare closures, you are eligible.
• Applies to wage earners, contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI)
• Also applies to worker who are still employed but not receiving income due to disruptions to their work situation as a result of Covid-19
• Application will be available early April 2020
• CERB payments begin within 10 days of application
• CERB would be paid every four weeks and be available from March 15, 2020 until October 3, 2020
• Canadians already receiving EI or have already applied for EI would continue to receive EI and should not apply for CERB (unless their EI ends before October 3, 2020 at which time they could apply for the CERB if they are unable to work due to Covid-19)
• If you are still eligible for EI after the 4 month CERB period, employees can apply for EI afterwards

Tax Deadline Changes

• The deadline to file your income tax and benefit return has been extended from April 30th to June 1st, 2020. The deadline to pay any 2019 balance has been extended to August 31st, 2020. This means all 2019 balances paid before September 2020 will not incur any penalties and interest.
• We encourage you to file your income tax and benefit return electronically and as soon as possible to make sure your benefit and credit payments are not interrupted or delayed.
• For self-employed individuals and their spouse/common-law partner, 2019 balances paid before September 2020 will not incur any penalties and interest. Your income tax and benefit returns must still be filed by June 15, 2020.
• Businesses will be allowed 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. We will not contact any small or medium businesses to initiate any post assessment GST/HST or Income Tax audits for the next 4 weeks.
• The due date for trusts with a tax year ending December 31, 2019 will be extended to May 1, 2020. Trust payments due before August 31, 2020 are also all extended to August 31, 2020. Anything not covered by this measure will be considered on a case-by-case basis.

Find more information on the financial measures introduced by the Government of Canada in response to COVID-19 on the Government of Canada website.

Other Financial Support

CRA is providing additional financial support to those affected by COVID-19 in addition to the measures previously discussed. Some of our measures include:

• Goods and Services Tax Credit (GSTC): The Government is proposing to provide a one-time special payment by early May 2020 through the Goods and Services Tax credit doubling the maximum annual payment amounts for 2019-20. The average boost to income from this measure will be close to $400 for single individuals and close to $600 for couples.
• Canada Child Benefit (CCB): The Government is proposing to increase the maximum annual Canada Child Benefit payment amounts, only for the 2019-20 benefit year, by $300 per child. Overall increase for families receiving CCB will be approximately $550 on average. These families will receive an extra $300 per child as part of their May payment.
• Registered Retirement Income Funds (RRIFs): The Government is proposing targeted help by reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors’ retirement savings.

For more information, visit the Canada Revenue Agency’s Update on the COVID-19 Pandemic.

Collections

CRA will be suspending collection activities on new debts until further notice and will be addressing pre-existing situations on a case-by-case basis.

• If you haven’t been able to make a payment due to #COVID19 or missed any other tax obligation, you can request to have your interests or penalty waived by filling out this form.
• Payment arrangements are still available on a case by case basis. There are a number of ways to make a payment arrangement outlined here.
• CRA’s Debt Management Call Centre is currently unavailable. If you need to contact a Collections Officer, you can call 1-800-675-6184 between 8am – 4pm your local time.

For more information, visit the Canada Revenue Agency’s COVID-19 Collections, Audits & Appeals site.

Wage Subsidy

CRA has introduced a temporary wage subsidy that will allow eligible employers to reduce the amount of payroll deductions they are required to remit to the Canada Revenue Agency (CRA).

Increase to the Wage Subsidy

It was announced that the wage subsidy for small and medium-sized business has been increased to 75%, up from 10% previously promised. There has been no announcement if the individual amount per employee has been increased from $1,375 or if the maximum amount per employer has been increased from $25,000. The measure has been backdated to March 15. More information on the changes is expected over the weekend.

For more information, visit the Fulcrum Group Blog Article.

This information was updated on March 27, 2020. 

WCB Premium Relief

The Government of Alberta has announced measures to provide immediate financial support to small and medium-sized businesses during the COVID-19 outbreak:

• Employers will have their 2020 WCB premiums deferred to 2021.
• No interest will be charged on the deferred amounts.
• When invoicing is resumed in 2021, employers will have 50% of the 2020 premiums waived.
• Invoices for 2020 premiums already paid will be refunded or credited to your account.

For more information please view the WCB Relief Information PDF.

A special emergency business account has been launched for small businesses that will see banks offer $40,000 of government-guaranteed loans to qualifying companies and not-for-profits. To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. The loans will be interest-free during the first year, and repaying the balance of the loan on or before December 31, 2022, will result in loan forgiveness of 25 percent (up to $10,000). Small businesses and not-for-profits should contact their financial institution to apply for these loans.

Payments for GST/HST remittances have been deferred. The Minister of National Revenue will extend until June 30, 2020, the time that:

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

Businesses in need of information about their particular obligations may contact the Canada Revenue Agency or refer to its website.