March 18th, 2020
Canada’s COVID-19 Economic Response Plan
Today, the Prime Minister announced measures to assist workers and families deal with the economic impact of the COVID-19 pandemic. Please note that these measures were just announced. We do not yet have information on eligibility or application processes for most of these programs. As soon as we have that information, we will share it.
Temporary Income Support for Workers and Families
For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the federal government is:
- Waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits.
- Waiving the requirement to provide a medical certificate to access EI sickness benefits.
- Introducing the Emergency Care Benefit to provide income support to:
- Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
- Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, but do not quality for EI sickness benefits.
- Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.
Application for the Benefit will be available in April 2020, and require Canadians to attest that they meet the eligibility requirements and re-attest every two weeks to reconfirm.
Apply for the Benefit through:
- Your CRA MyAccount secure portal;
- Your secure My Service Canada Account; or
- A toll free number (not yet set up) that will be equipped with an automated application process.
Longer-Term Income Support for Workers
For Canadians who lose their jobs or face reduced hours as a result of COVID’s impact, the federal government is:
- Introducing an Emergency Support Benefit to support to workers facing unemployment who are not eligible for EI.
- Implementing changes to the EI Work Sharing Program, which provides EI benefits to workers who reduce their normal working hours as a result of developments beyond the control of their employers.
Income Support for Individuals Who Need It Most
- For low- and modest-income families, who need additional help with their finances, the federal government is proposing a one-time payment by early May 2020 through the Goods and Services Tax credit (GSTC). This will double the maximum annual GSTC payment amounts for the 2019-20 benefit year.
- For families with children the federal government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child.
The federal government is proposing targeted help to vulnerable groups by:
- Providing $305 million for a new distinctions-based Indigenous Community Support Fund to address immediate needs in First Nations, Inuit, and Métis Nation communities.
- Placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently repaying them.
- Reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.
- Providing the Reaching Home initiative with $157.5 million to support people experiencing homelessness during the COVID-19 outbreak.
- Providing up to $50 million to women’s shelters and sexual assault centres to help with their capacity to manage or prevent an outbreak in their facilities. This includes funding for facilities in Indigenous communities.
Flexibility for Taxpayers
The Canada Revenue Agency (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. However, the Agency encourages individuals who expect to receive benefits under the GSTC or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.
- For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.
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 Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
Effective immediately the CRA will recognize electronic signatures as having met the signature requirements of the Income Tax Act, as a temporary measure. This applies to authorization forms T183 or T183CORP.
The CRA is adapting its Outreach Program to help to individuals to better understand their tax obligations and to obtain the benefits and credits to which they are entitled. Traditionally available in-person, this service is now available over the phone, and through webinar, where possible.
Additional efforts to encourage individuals to file their returns electronically, or where possible, through the File My Return service, will be put forward.
Mortgage Default Management Tools
The Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers offer tools to lenders that can assist homeowners experiencing financial difficulty, including payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.
CMHC is providing increased flexibility for homeowners facing financial difficulties to defer mortgage payments on homeowner CMHC-insured mortgage loans. CMHC will permit lenders to allow payment deferral beginning immediately.