March 18/20: Canada COVID-19 Economic Response Plan

Below are some of the highlights pertaining to the Canada COVID-19 Economic Response Plan — that are important to know and to share with others.  Please help us to help others in financial need.

On March 18, 2020, our Canadian government announced an $82 Billion dollar economic stimulus package as part of the Government of Canada COVID-19 Economic Response Plan: which is in response to concerns related to COVID-19 and global impacts. This stimulus is to help individual and families who face hardship given current economic conditions. The economic stimulus package comprises $27 Billion in direct financial assistance and $55 Billion related to income tax deferral. To follow are the highlights:

Individual Income Tax / Tax Relief Measures

1. Registered Retirement Income Funds (RRIFs) & Seniors
Reducing the required withdrawal minimum by 25% for 2020. This is important for seniors that withdraw more than needed and face income tax on the excess. It is not finalized although it is expected that all excess withdrawals can be re-contributed back to individual RRIF accounts so as to claim an income tax deduction.   I have written further on this here: Canada Announces Relief for Retirees Drawing Down RRIF’s
2. The personal income tax filing deadline is extended to June 1, 2020 (from April 30, 2020). The trust income tax filing deadline is extended to May 1, 2020 (for a December 31, 2019 deadline)
3. Income tax payments due are extended to August 31, 2020. No interest or penalties will accumulate during this period. This measure will apply to all taxpayers.
4. Temporarily accepting electronic signatures previously not accepted by the Canada Revenue Agency (CRA) to help ease the administrative burden during this period. This means that tax filers can produce your return electronically.
5. Doubling of the Goods and Services Tax Credit (GSTC). This will provide support to low-to-modest income families who need immediate financial assistance. This payment is expected as a one-time payment early in May, 2020. This will boost individuals by $400 and couples by $600.
6. Increasing the maximum annual Canada Child Benefit (CCB) for families with children for the 2019–2020 benefit year by increasing the benefit by $300 per child.
7. Implementing a six-month freeze on Canada Student Loan interest repayments.

Emergency Support and Enhanced Benefits

8. Waiving the mandatory Employment Insurance (EI) one-week waiting period for individuals in quarantine due to COVID-19 (effective March 15, 2020).
9. Waiving the requirement for medical certificates to access EI sickness benefits.

Update: 10. & 11. 3.25.20 Last night Canada passed the Canada Emergency Response Benefit and this bill is now with the Senate for final approval. It includes the earlier stated Employment Insurance (EI) eligibly and benefits announced last week (Emergency Care Benefit / Emergency Support Benefit), and expands, simplifies, and replaces these programs. The proposed new benefit is $2K/month for 4 months and includes self-employed or those working on contract an those not otherwise qualifying for EI – and are impacted by COVID-19. A new portal will be released soon.
See: Alberta Government introduces Canada Emergency Response Benefit to help workers and businesses.
10. Introducing the Emergency Care Benefit (ECB). This $10 Billion dollar program will provide up to $900 in bi-weekly payments for up to 15 weeks. People will be able to apply for this benefit in April 2020 through CRA My Account, My Service Canada through an automated application process. The benefit will require an attestation reconfirmed every two weeks, that applicants meet the eligibility requirements. This benefit is aimed at the following types of people that do not normally normally qualify for Employment Insurance (EI) benefits:
→Parents with children who require care or supervision due to school closures and who are unable to earn employment income.
→Workers and self-employed individuals who are quarantined or sick with COVID-19.
→Individuals who are taking care of a family member who is sick with COVID-19.
11. Introducing an Emergency Support Benefit. This $5 Billion dollar program is for individuals who lose their jobs or experience reduced hours due to business closures. This program incorporates the March 11, 2020 announced EI Sharing Program, which provides Employment Insurance (EI) benefits to workers who agree to reduce their normal working hours because of developments beyond their employers’ control.

12. Mortgage and lending. Providing assistance to homeowners through the Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers. This allows lenders to offer customers extended payment deferral or rearranging amortization period, and other arrangements. For non-insured mortgages, Canada’s largest banks (Bank of Montreal, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank and TD Bank) have confirmed a 6 month deferral of payments based on need. Other lenders are offering case-by-case basis, with some also offering a 6 month deferral.
13. Further funding to support homeless individuals and families, and supporting women and children fleeing violence through women’s shelters.
14. Assistance up to $5,000 to help Canadians abroad (not affected by COVID-19) to return home. More information and register at: Global Affairs Canada.

Direct Stimulus for Small-to-Medium Businesses

15. Providing eligible small and medium-sized businesses, non-profits, and charities with a temporary wage subsidy for three months to help offset revenue losses and prevent job losses. This benefit is up to $25,000, representing 10% of salaries paid to a maximum of $1,375 per employee. (this wage top-up was later hugely increased to from 10% to 75%, backdated to March 15; estimated to be a total of 30 Billions in loans, interest free)
16. Deferring taxes due to September 1, 2020 for all businesses (that are otherwise due before September). No interest or penalties will accumulate. This applies to tax balances due and tax instalments.
17. Implementing a freeze GST/HST or Income tax audits for the next four weeks.
18. Increasing access to credit to $2 Million for qualified small-to-medium sized businesses through the Business Credit Availability Program (BCAP). Qualified businesses include most impacted businesses including oil and gas, tourism, and air transportation.
19. Postponing interest due on business loans for up to 6 months and reducing loan interest rates.
20. Injecting $300 Billion to support Canadian banks with their lending capacity.
21. Support the Canadian economy by reducing the Bank of Canada’s interest rate to 0.75%.
22. Implementing an Insured Mortgage Purchase Program (IMPP) that will provide $50 billion of insured mortgage pools through the CMHC.
23. Launching a special emergency business account for (storefront) small businesses that will see banks offer $40,000 government-guaranteed loans interest-free for the first year. If the business can repay the loan by the end of 2022, up to $10,000 will be forgiven.

Minister of Finance Bill Morneau is quoted as saying that his government will do “whatever it takes” to minimize financial hardship for individuals and families, and for businesses and the economy.

Business Support Links:
~ Alberta: Covid-19 Support for Employers
~ Alberta: Additional financial support for Albertans and employers
~ Alberta: Workforce contacts and employer resources
~ Alberta: Workforce Consultant Contact List
~ Government of Canada: Wage Subsidies and Other Programs
~ Government of Canada: Economic Response Plan

Canada Revenue Agency (CRA) Links:
~ Helping Canadians
~ CRA and COVID Emergency Measures

Municipal and Provincial Relief to Individuals and Businesses

It is worth noting that municipalities and provinces across Canada are also offering relief.

The City of Edmonton has provided a payment extension to all homeowners and businesses that require it, applicable to all lump sum or payment plans until August 31, 2020. There is also a payment deferral applicable to all city utility fees through EPCOR (waste, water, drainage) for that that require it, for 90 days. The City of Edmonton has also suspended suspended fare collection on public parking (both above and below ground) and reduced the transit service fares.
City of Edmonton Links::
~ City of Edmonton Novel Coronavirus (COVID-19)

Provincially in Alberta , these initiatives were recently created: a new job-protected leave, extra $500 million in health care funding, reversing the 4.2 per cent increase to municipalities’ Education Property Tax, suspending planned layoffs in the health care industry, suspended sick notes for the new 14 day leave, suspended student loan interest for 6 months, and deferring commercial taxes for 6 months. Other measures are under consideration.
Alberta Links:
~ COVID-19 info for Albertans

Update for Alberta 3.25.2020: Albertans who are eligible for the province’s COVID-19 emergency income support program can now apply to receive deposits as early as the middle of next week. The assistance is a one-time payment of $1,142, and unlike federal Employment Insurance it only needs to be applied for once. To sign up for the benefit, Albertans need to go to the online Service Alberta portal and create a MyAlberta Online ID (if they do not have one already).
MyAlberta Links:
~ MyAlberta
~ Alternative link: My Alberta receive a code
My Alberta Web pages are understandably busy.