Hope you are keeping safe and healthy.
The purpose of my email is to provide you with some useful information as we navigate through this very challenging time. As you may know, the Government has introduced various measures over the last few days on ways individuals and small business will be assisted financially. The challenge is the messaging is sporadic and at times unclear.
Prime Minister Justin Trudeau along with U.S. President Donald Trump jointly announced that Canada and the U.S. have agreed to close its border to all non-essential traffic. While all of this economic shift occurs, Trudeau also announced plans to roll out a stimulus package worth 3% of Canada’s economy which includes $27 billion in direct support for individuals and companies plus $55 billion in tax deferrals for both households and businesses. As a result, I am providing you with a summary and a link to the Government’s website which outlines how they will help employees, employers, students, indigenous people, and financial institutions to name a few, plus what it means for us and our families.
Support for Canadians
For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is 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. They are also waiving the requirement to provide a medical certificate to access EI sickness benefits and introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks.
For Canadians who lose their jobs or face reduced hours as a result of COVID’s impact, the Government is introducing an Emergency Support Benefit delivered through the CRA to provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment. They are also implementing the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process.
Income Support for Individuals Who Need it Most
For over 12 million low and modest-income families who may require additional help with their finances, the Government is proposing to provide a one-time special 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. The average boost to income will be close to $400 for single individuals and close to $600 for couples.
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. 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.
Flexibility for Taxpayers
For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020. For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020. The Canada Revenue Agency 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.
Mortgage Default Management Tools
The Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers are offering tools to lenders which include payment deferral, loan re-amortization, capitalization of outstanding interest arrears for other eligible expenses and special payment arrangements
Role of Financial Institutions
Banks in Canada have affirmed their commitment to working 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 and which will include up to a 6-month payment deferral for mortgages plus the opportunity for relief on other credit products.
Support for Businesses
On March 18, 2020 the government and its partners announced further measures to support businesses such as supporting Canadian Businesses through the Canada Account, which is administered by Export Development Canada (EDC). This will allow the government to provide additional support to Canadian companies through loans, guarantees or insurance policies during these challenging times.
Helping Businesses Keep Their Workers
The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer
Flexibility for Businesses Filing Taxes
The Canada Revenue Agency will allow all businesses 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.
Ensuring Businesses have Access to Credit
The Business Credit Availability Program (BCAP) will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, targeted to small and medium-sized businesses. The Office of the Superintendent of Financial Institutions (OSFI) announced it is lowering the Domestic Stability Buffer by 1.25% of risk-weighted assets, effective immediately.
Supporting Financial Market Liquidity
Under this program, the government will purchase up to $50 billion of insured mortgage pools through the Canada Mortgage and Housing Corporation (CMHC).
I hope you find this information to be helpful and informative. As always, if you have any questions or concerns, please do not hesitate to contact me. We will get through this unpredictable time together.