COVID-19: Federal government announces additional support for businesses

Today, the Government of Canada announced additional investments to support Canadian businesses from the economic impacts of the COVID-19 pandemic. These new measures are intended to provide support to financial institutions and allow them to provide additional credit and liquidity options for a range of businesses.

Deferral of Sales Tax Remittance and Custom Duty Payments

The federal government is deferring GST/HST remittances and custom duty payments to June 30, 2020. This measure is intended to provide up to $30 billion in cash flow assistance for Canadian businesses and self-employed individuals over the next three months.

Monthly GST/HST filers will be able to extend until June 30th the remittances of amounts collected for February, March and April 2020 reporting periods. Quarterly filers will defer the amount collected from January 1, 2020 through March 31, 2020 until June 30, 2020. Annual filers, whose GST/HST return or instalments are due in March, April or May, can defer amounts collected and owing for their previous fiscal year as well as instalments of GST/HST in respect of the current fiscal year until June 30, 2020.

Deferral of Custom Duty and Sales Tax for Importers

Imported goods by businesses are generally subject to GST at 5% and custom duties at the time the goods clear Canadian customs. Payments for these amounts owing are due on the first day of the month following the month in which the statements of Accounts are issued. The federal government is deferring the payment for statements of accounts for March, April and May until June 30, 2020.

Update to the Temporary Wage Subsidy

The Prime Minister announced a 75% wage subsidy for qualifying business, for up to 3 months, retroactive to March 15, 2020.  More details on eligibility criteria will be shared before the end of the month.

Launch of the new Canada Emergency Business Account

This program will provide up to $25 billion to eligible financial institutions so they can provide interest-free loans to small businesses. These loans – guaranteed and funded by the Government of Canada – will ensure that small businesses have access to the capital they need, at a zero per cent interest rate, so they can pay for rent and other important costs over the next number of months.

Launch the new Small and Medium-sized Enterprise Loan and Guarantee Program

This program will enable up to $40 billion in lending, supported through Export Development Canada and Business Development Bank, for guaranteed loans when small businesses go to their financial institutions to help weather the impacts of COVID-19. This is intended for small and medium-sized companies that require greater help to meet their operational cash flow requirements.

Canada Revenue Agency (CRA)’s Additional Measures for Individuals and Businesses

Extensions for Trusts, Partnership and NR4 Information Returns

In addition to income tax filing and payment deadline extensions previously announced, the CRA is extending the deadline for trusts, partnership, and NR4 information returns to May 1, 2020.

Objections

The CRA also announced that any objections related to entitlements to benefits and credits will continue to be processed during the COVID-19 crisis. As a result, there should not be any delays associated with the processing of these objections.

The CRA is currently suspending action on any objections related to other tax matters filed by individuals and businesses. No collection action will be taken with respect to these accounts during the period that they are suspended.

For any notice of objection requests due March 18th or later, the deadline for filing is effectively extended until June 30, 2020.

CRA Audits

The CRA is suspending contact with taxpayers for audits with certain exceptions. As a result, new no new audits are being launched and no requests for information relating to existing audits will be issued. No audits should be finalized, and no reassessments should be issued during this suspension.

CRA Collections

Collection activities on new debts will be suspended until further notice, and flexible payment arrangements will be available. Payment arrangements are also available on a case-by-case basis if you can’t pay your taxes, child and family benefit overpayments, Canada Student Loans, or other government program overpayments in full.

Please contact your Fuller Landau engagement partner or manager for any questions.