Government Economic Support relating to COVID 19

What are the Federal and Provincial Governments doing to assist individuals and businesses through the on-going COVID-19 crisis?

The Government of Canada has taken unprecedented measures to minimize the potential devastating financial impact to individuals and businesses due to the rapidly evolving threat of the COVID-19 pandemic. Over the last two weeks the federal government has announced multiple measures,totaling over $90 billion, with the purposes of protecting Canada’s economy and its labour force. The Ontario Government announced additional financial support measures on March 24^th.

What assistance is being provided by the Federal Government for individuals?

Temporary Income Support for Workers and Parents

Waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure is in effect as of March 15, 2020.
Waiving the requirement to provide a medical certificate to access EI sickness benefits for Canadians without paid sick leave and who are sick, quarantined, or forced to stay home to care for children

A new Emergency Care Benefit (ECB) will provide up to $2,000 a month for up to 4 months. The ECB will be administered through the CRA and will provide income support to people who do not otherwise quality for Employment Insurance:

Workers, including self-employed individuals, who are either quarantined or sick with COVID-19
Workers who are taking care of a family member who is sick with COVID-19 s
Parents with children who require care due to school closures and are unable to earn employment income

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.
Wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance

Applications for the ECB will be available in April 2020 and will be accessible online using the CRA MyAccount secure portal, My Service Canada Account, or by calling a toll-free number equipped with an automated application process (please check Canada.ca website in 1 week for call #). The CTC suggests that those who do not have a MyAccount registration with the CRA use the intervening time to set up one. The step by step process to set up MyAccount is available at: https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services/cra-user-password-help-faqs/registration-process-access-cra-login-services.html#hlp1a

Other Income Support for Individuals:

GST Tax Credit (GSTC) – A one-time special payment will be made to qualifying individuals (who are already getting GSTC) by early May. This will double the maximum annual GSTC payment amounts for the 2019-20 benefit year. This means that the average boost to income for those benefitting from this measure will be close to $400 for single individuals and close to $600 for couples.
Child Benefit Payment – increase in the maximum annual Canada Child Benefit (CCB) payment amounts to qualifying families by an extra $300 per child as part of their May payment. This measure will apply only for the 2019-20 benefit year.
Seniors – Reducing required minimum withdrawals from registered retirement income funds (RRIFs) by 25% for 2020. This will provide flexibility to seniors that are concerned that they may be required to liquidate their RRIF assets to meet minimum withdrawal requirements. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution registered pension plan.
Students – Placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.
Homeowners – The government, through the Canada Mortgage and Housing Corporation (CMHC), is providing increased flexibility for homeowners facing financial hardship to defer mortgage payments on homeowner CMHC-insured mortgage loans. These include payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.

Extension of Tax Filing Deadlines and Deferral of Tax Payments

For individuals the 2019 tax filing date has been extended to June 1, 2020.
If you are expecting a tax refund for the 2019 tax year, we suggest that you file the tax returns as soon as possible so that you can get your tax refund sooner. Please e-file your tax return to get your refund much faster.
CRA will allow all taxpayers to defer the payment of any income tax amounts that become owing on or after March 18^th and before August 31st. Such payments will now be due end of August, and there will be no interest or penalty on the deferred payments.

Loans with Banks

Canadian banks have made a commitment to work with customers to provide flexible solutions, on a case-by-case basis, for managing through hardships caused by recent developments. This may include situations such as pay disruption, childcare disruption, or illness. Canada’s large banks have confirmed that this support will include up to a six-month payment deferral for commercial mortgages, and the opportunity for relief on other credit products. Please contact your bank if you need assistance.Please note that this is not a forgiveness of your monthly payments rather a delay and the amount outstanding will have to be paid in full when life returns to normal. CTC strongly advises its members and the Tamil community to continue making payments if you can afford it and only take advantage of the deferral if absolutely necessary.

What assistance is being provided by the Federal Government to Businesses?

Helping small businesses keep their workers

Provide up to75 per cent wage subsidy for qualifying businesses, for up to 3 months, retroactive to March 15, 2020. This will help businesses to keep and return workers to the payroll.More details on eligibility criteria will be shared by the Federal Government before the end of the March.

Loans with Banks

Business credit facility program

A $65 billion credit facility will be established to lend money to businesses coping with COVID-19. The money will go to the Business Development Bank of Canada and EDC who will help businesses access this additional credit. Most of the money will be directed to small and medium-sized enterprises through the following programs.

Offering a guarantee on loans

Export Development Canada is supporting businesses by offering their bank a guarantee on loans of up to $5 million to ensure that companies can access more cash immediately.

New Canada Emergency Business Account

This $25 billion program through EDC will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 per cent (up to $10,000).

New Loan Guarantee for Small and Medium-Sized Enterprises

Export Development Canada is working with financial institutions so that they can issue new operating credit and cash flow term loans of up to $6.25 million to Small and Medium size enterprises.

Work-sharing program

The government announced enhancements to the work-sharing program to help employers who are experiencing a downturn in business due to COVID-19, and their workers. The key criteria to apply include:

Demonstrate a recent decrease in business of 10%;
Demonstrate that the work shortage is temporary and beyond your control;
Submit and implement a recovery plan

For further information, please visit Government of Canada website – www.Canada.ca

What relief measures is the Government of Ontario providing to individuals and businesses?

The Province of Ontario announced on March 25, 2020 that it will also make available $10 billion in support for people and businesses through tax and other deferrals to improve their cash flow, protecting jobs and household budgets.

Assistance for Individuals

A one-time payment of $200 per child up to 12 years of age, and $250 for those with special needs, including children enrolled in private schools.
Double the Guaranteed Annual Income System (GAINS) payment for low-income seniors for six months – maximum payment to $166 per month for individuals and $332 per month for couples starting in April 2020
Affordable electricity bills by setting electricity prices for residential, farm and small business time-of-use customers at the lowest rate, known as the off-peak price, 24 hours a day for the next45 days
Direct support to families for their energy bills by expanding eligibility for the Low-income Energy Assistance Program (LEAP) and ensuring that their electricity and natural gas services are not disconnected for nonpayment
Emergency childcare options to support parents working on the front lines, such as health care workers, police officers, firefighters and correctional officers.
Providing six months of Ontario Student Assistance Program (OSAP) loan and interest accrual relief for students, leaving more money in people’s pockets

Assistance for Businesses

Five months of interest and penalty relief for businesses to file and make payments for the majority of provincially administered taxes
Deferring the upcoming June 30 quarterly municipal remittance of education property tax to school boards by 90 days, which will provide municipalities the flexibility to, in turn, provide property tax deferrals to residents and businesses, while ensuring school boards continue to receive their funding
Workplace Safety and Insurance Board (WSIB) allowing employers to defer payments for up to six months

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Prepared by Canadian Tamil Congress – March 30, 2020