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Quebec relief for employer HSF payroll contributions

Quebec relief for employer HSF payroll contributions

Quebec grants eligible employers a credit for contributions to the Health Services Fund

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Quebec has announced it will grant certain employers a credit for their employer contributions to the provincial Health Services Fund (HSF) for employees on paid leave during COVID-19. This HSF credit will be available to "specified employers" that can benefit from the 75% Canada Emergency Wage Subsidy (CEWS) and that maintain an establishment in Quebec. It is intended to offset an employer's HSF contributions, which are not covered by the federal government's CEWS. The HSF credit will be in force retroactively for the entire duration of the 12-week wage subsidy granted by CEWS, which extends from March 15 to June 6, 2020.

Quebec announced this relief on April 30, 2020, in Quebec Information Bulletin 2020-07.

Background

Certain employers may apply to receive the 75% Canada Emergency Wage Subsidy (CEWS). This temporary subsidy is available to qualifying employers that have lost revenue during COVID-19, and generally provides an amount to employers equal to 75% of employees' remuneration paid, up to a maximum of $847 per week per employee, from March 15, 2020 to June 6, 2020 (see TaxNewsFlash-Canada 2020-41, " Employers — Prepare to Apply for 75% Wage Subsidy" and TaxNewsFlash-Canada 2020-39, "Employers — Canada's 75% Wage Subsidy Now Enacted".

The CEWS also reimburses employers for certain contributions to employment insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan for employees on paid leave. However, it does not cover an employer's obligations for Quebec's Health Services Fund (HSF).

Applying for the HSF credit

HSF credit applications must be made in writing and include supporting documentation to verify the amount of the credit. Employers must submit their applications along with their "Summary of Source Deductions and Employer Contributions" for 2020.

Reduction of the employer payment of the contribution to the HSF

Starting May 1, 2020, a specified employer can reduce the amount of employer HSF contributions that it has to remit to the Minister of Revenue, by the amount of its unapplied HSF credit attributable to earlier periods.

For more information, contact your KPMG advisor.

Information is current to May 5, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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