On March 18, 2020, the Government of Canada announced unprecedented steps to support Canadian businesses affected by the ongoing COVID-19 epidemic. The Prime Minister has announced that Parliament will be convened shortly to pass legislation authorizing parts of the Economic Response Plan requiring legislative action. The plan promises support to employers and their workers finding themselves in financial difficulty.
Support for Businesses and Employers
The Government of Canada is promising specific support for exporters, flexibility in tax filing through a deferral until August 31, 2020 for payment of any income tax amounts owing between March 18, 2020 and September 2020 as well as allowing the Business Development Bank of Canada to provide more than $10 billion in support to small and medium businesses.
In order to assist employers in keeping their workers and to help prevent layoffs, the Government of Canada has also announced a temporary wage subsidy for small businesses for a period of three months. The subsidy is equal to 10% of the remuneration paid in the three-month period to a maximum of $1,375 per employee and a maximum of $25,000 per business.
Support for Workers
The Government of Canada has also announced Employment Insurance supports including:
- Waiving the 1 week waiting period for individuals in imposed quarantine to qualify for EI.
- Waiving the medical certificate requirements for EI sickness benefits.
- An Emergency Care Benefit of up to $900 bi-weekly, for a maximum of 15 weeks, for workers and self-employed individuals who are sick but do not qualify for EI sickness benefits, those who are taking care of a family member sick with COVID-19 and for parents with children who require care or supervision due to school closures.
Individuals will be able to apply for the benefit in April 2020.
In addition, the Government has announced long-term income support for workers whose hours have been reduced as a result of COVID-19’s impact and who are not usually eligible for EI and are facing unemployment. Workers who agree to reduce their working hours as a result of developments beyond their employer’s control may also qualify.
Finally, the Government is also offering an extension to the tax filing date for individuals for the 2019 tax year to June 1, 2020 and a tax payment deferral until August 31, 2020 for income tax amounts owing between March 18, 2020 and September 2020.
Although these measures have been announced thus far, because of the fluidity of the situation, further measures may be announced. The full release from the Government of Canada can be found by clicking here.