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Quebec extends HSF credit for employers

Quebec extends HSF credit for employers

This credit covering employees on paid leave during COVID-19 is extended to November 21

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Quebec announced a 12-week extension to the employer contribution credit to the Health Services Fund (i.e., the HSF credit) for employees on paid leave during COVID-19. As a result, the credit, which is granted to eligible employers that qualify for the Canada Emergency Wage Subsidy (CEWS), is extended to November 21, 2020 (from August 29, 2020), to match the recent extension of the CEWS.

Quebec has also announced it will harmonize with temporary federal measures affecting registered pension plans (RPPs) and deferred salary leave plans (DSLPs) in light of COVID-19.

These measures were announced in Quebec Information Bulletin 2020-11, released on August 17, 2020.

HSF credit

The employer contribution credit to the HSF is now extended to November 21, 2020 (previously, it was extended from June 6, 2020 to August 29, 2020, see TaxNewsNow, "Quebec announces extended taxpayer relief").

This HSF credit is available to "specified employers" who can benefit from the CEWS and who maintain an establishment in Quebec. It applies to employees on paid leave during COVID-19 and is intended to offset an employer's HSF contributions, which are not covered by the CEWS. The credit covers the entire duration of the CEWS program, which currently extends from March 15 to November 21, 2020.

The information bulletin also modifies the definition of "qualifying entity" and "specified employee", in order to harmonize with the changes enacted by the federal government on July 27, 2020.

Background

Finance announced on July 17, 2020 that it would expand and extend the CEWS until December 19, 2020, although it only provided details to November 21, 2020. These changes were enacted on July 27, 2020 (see TaxNewsFlash-Canada, 2020-62, "Canada Further Extends and Expands Wage Subsidy" and TaxNewsFlash-Canada 2020-64, "Canada Enacts Wage Subsidy Extension and Enhancements").

Additional harmonization measures

Quebec says it will also harmonize with the temporary relief measures for employers who sponsor DSLPs or RPPs for their employees announced by the federal government on July 2, 2020 (see TaxNewsNow, "Pension plans & DSLPs — New temporary relief measures".)

When implementing measures relating to the federal regulation, the bulletin states that the changes to the Quebec tax system will only be adopted following adoption of any federal regulation. Further, the bulletin states that these changes will apply on the same dates as the federal measures being harmonized.

For more information, please contact your KPMG advisor.

Information is current to August 25, 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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