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Canada: Tax developments in response to COVID-19

General Information

This page offers an overview of tax developments being reported globally by KPMG member firms in response to the Novel Coronavirus (COVID-19).

The content will be updated on a regular basis. However, due to the fast-moving pace of change, it may not always reflect the most current developments in a given jurisdiction. Please refer to the date of accuracy and refer to the relevant links, under additional information, for original source information.

Date accurate as of: 18 November 2020

Canada has announced financial and tax measures in response to COVID-19. In addition to extending certain tax filing and payment deadlines, Canada will provide a variety of financial measures for Canadian individuals and businesses affected by the COVID-19 outbreak.

The economic stimulus packages announced are highly focused on immediate needs and Canadian individuals. 

As of September 22, 2020 the announced measures to support individuals and businesses included approximately $325B in support to ensure Canadians can pay for essentials and support Canadian businesses.

Nationwide tax measures

Income Tax Filing/Payment Deadline Flexibility

The government temporarily extended a wide range of tax filing and payment deadlines in response to COVID-19. The majority of these deadline extensions have now passed and are no longer included in the summary. Only deadline extensions that have not yet passed are included below. Please refer to previous versions of the summary for a complete list of extensions.

Registrered Charities

Tax Filing Deadline extended to December 31, 2020, for charity information returns that would otherwise have a filing due date between March 18 and December 31, 2020.

Temporary extension of certain deadlines and time limits

The government has temporarily extended certain tax deadlines and time limits up to six months, until December 31, 2020 at the latest, due to COVID-19 including: 

  • Taxpayers' applications to extend the time to file a notice objection that normally must be made within one year after the deadline to file a notice of objection for both income tax and GST/HST purposes
  • Scientific Research and Experimental Development (SR&ED) and related investment tax credit claims
  • The period during which the CRA can (re)assess a taxpayer’s obligations for income tax and GST/HST

For more information see KPMG TaxNewsFlash-Canada “COVID-19 — Canada Stretches Tax Assessment Periods” (PDF 279 KB)

Administrative Comments

  • The new deadlines and administrative practices apply automatically.
  • When the business expects to receive a tax or input tax credit refund, KPMG recommends that the relevant returns be filed as soon as possible.
  • In addition, the Canada Revenue Agency has indicated that it will be flexible with respect to payment arrangements and will consider requests for relief of penalties and interest. To enter into a payment arrangement, visit the CRA’s website.

Audits

  • At the end of March 2020, the CRA announced that for the majority of businesses, the CRA would temporarily suspend audit interaction between taxpayers and representatives.
  • On September 22, 2020 the CRA released its re-opening plan that outlines audit work commencing in fall 2020. The CRA is prioritizing its commencement of audits focusing on higher dollar audits first, audits close to completion, and those with a strategic importance to governments, or Canada’s tax treaty partners. In addition, the CRA is resuming audits for small businesses, medium businesses, non-profit organizations and registered plans in October and November.

Support for Businesses 

Canada Emergency Wage Subsidy (CEWS)

The CEWS is a temporary government subsidy that will generally provide an amount to “eligible entities” of all sizes and sectors that have had their revenues decline during  COVID-19. The CEWS is currently available for nine qualifying four-week periods from March 15, 2020 to November 21, 2020 and the government has introduced legislation to extend the CEWS to June 2021 and provide subsidy details for the period November 22, 2020 to December 19, 2020. When the CEWS was initially introduced it generally provided an amount to eligible employers equal to 75% of employees’ eligible remuneration paid, up to a maximum of $847 per week per eligible employee, and required employers to have seen a revenue decline of at least 30% for the particular period (15% for March 2020) in order to qualify. However, beginning July 5, 2020 eligibility for the CEWS was expanded to employers who do not meet the previous 30% revenue threshold, and the amount of the subsidy was replaced with a new two-part subsidy consisting of a “base” and a “top-up” amount. Under the new rules, the amount of the wage subsidy an eligible employer could qualify for varies depending on their revenue decline, with a maximum combined subsidy of up to 85% of employees’ eligible remuneration paid, up to a maximum of $960 per week per eligible employee for July and August. The amount of the subsidy will be gradually reduced throughout the remaining claim periods.

There is no overall limit on the wage subsidy amount that an eligible employer may claim under the CEWS, but the federal government has introduced anti-avoidance measures to ensure that the subsidy is not inappropriately obtained.

The government has introduced legislation to extend the application deadline to the later of January 31, 2021, and 180 days after the end of the particular qualifying period. Currently, the application deadline for CEWS claims is January 31, 2021.

On October 9, 2020 the government announced that it will extend the subsidy until June 2021 and that it will maintain the CEWS rate applicable for October 2020 of up to a maximum of 65% of eligible wages until December 19, 2020 (previously, this rate was scheduled to go down to a maximum of 45% effective October 25, 2020). The government introduced legislation to implement these changes on November 2, 2020 but they have not been enacted as of November 16, 2020.

Refund for Certain Payroll Contributions (CEWS)

To the extent that an eligible employee is on leave with pay and the employer qualifies for the CEWS, 100% of the amounts paid for certain employer-paid contributions to Employment Insurance (EI), the Canada Pension Plan (CPP), the Quebec Pension Plan (QPP), and the Quebec Parental Insurance Plan (QPIP) may be refunded.

An employer that is eligible for the CEWS and that has an establishment in Quebec may benefit from the credit for contributions to Health Services Fund (HSF) in respect of an employee who is on paid leave during the COVID-19 pandemic. The HSF credit is in force for the entire period of the CEWS (March 15 to November 21, 2020). On November 12, 2020, Quebec announced that it will extend the HSF credit to December 19, 2020.

The amount of the credit for contributions to the HSF will be equal to the total amount of the contributions to the HSF paid by an employer on the salary and wages paid to an employee on paid leave during a week included in the period beginning on March 15, 2020, and ending on December 19, 2020.

For further details, see KPMG’s TaxNewsFlash-Canada, “Employers — Canada’s 75% Wage Subsidy Now Enacted” TaxNewsFlash-Canada, “Employers — Prepare to Apply for 75% Wage Subsidy”, TaxNewsFlash-Canada “Canada Extends 75% Wage Subsidy and Refines Eligibility” , TaxNewsFlash-Canada “Canada Enacts Wage Subsidy Extension and Enhancements” , TaxNewsFlash-Canada “Canada extends wage subsidy and signals tax plans”, TaxNewsFlash-Canada “Canada bolsters wage subsidy and announces new support“, TaxNewsNow-Canada “Canada proposes additional CEWS tweaks” and TaxNewsFlash-Canada “Canada Provides Details on Latest Wage Subsidy Changes”.

Temporary Wage Subsidy (TWS) 10% subsidy

The government provides “eligible employers” with a temporary wage subsidy for a period of three months beginning March 18, 2020. The subsidy is equal to a maximum of 10% of wages paid from March 18, 2020 to June 19, 2020, up to a maximum of $1,375 for each “eligible employee”, and up to a maximum of $25,000 per employer. 

Eligible employers” include:

  • individuals with a business number;
  • NPOs;
  • registered charities;
  • certain partnerships;
  • Canadian-controlled private corporations eligible for the small business deduction.

An “eligible employee” is an employed person in Canada.

If an eligible employer is eligible for the CEWS and the 10% TWS for a given period, the 10% TWS benefit in a particular period reduces the amount that can be claimed under the CEWS during this same period. Such employers may elect for the Temporary Wage Subsidy to be a percentage lower than 10% (including 0%) to calculate their subsidy entitlement.

Assistance received under the TWS (10%) reduces the amount of remuneration eligible for other federal tax credits calculated on the same remuneration.

The CRA encourages employers eligible for the TWS who have reduced remittances, intend to reduce remittances, or have claimed the CEWS and need to confirm the amount of the TWS being claimed, to submit a self-certification as soon as possible so that the CRA can reconcile the TWS with employer payroll accounts for 2020.

For further details, see KPMG’s TaxNewsFlash-Canada “Federal COVID-19 Relief — More Details Released” (PDF 205 KB).

Temporary Relief for Certain Pension Plan Contributions

The CRA will waive the 1% minimum employer contribution requirement for money purchase provisions of certain registered pension plans for the remainder of 2020. This relief will only apply to plans that are amended to suspend accruals under the plan for the year. This relief measure was announced on May 5, 2020 and is restricted to plans that submit an amendment to the Registered Plans Directorate.

Temporary Relief for Certain Pension Plan Contributions

The CRA will waive the 1% minimum employer contribution requirement for money purchase provisions of certain registered pension plans for the remainder of 2020. This relief will only apply to plans that are amended to suspend accruals under the plan for the year. This relief measure was announced on May 5, 2020 and is restricted to plans that submit an amendment to the Registered Plans Directorate.

Relief for certain mining companies

The Department of Finance announced on July 10, 2020 its proposal to extend the period that junior mining exploration companies and other issuers can incur eligible flow-through share expenses. Finance is also proposing to provide some relief for the “Part XII.6 tax” that generally applies to eligible Canadian exploration expenses that are renounced before they are incurred under the "look-back rule” by temporarily allowing these expenditures to be treated as if they were incurred up to one year earlier than the date they are actually incurred (depending on the date the flow-through share agreement was entered into). The legislative amendments to implement these proposals are expected to be released in due course.

For more information please see  KPMG’s TaxNewsNow-Canada “Relief announced for certain mining operations”.

Temporary relief for employer sponsored DSLPs and RPPs

Finance announced temporary relief measures for employers who sponsor deferred salary leave plans (DSLPs) or registered pension plans (RPPs) for their employees on July 2, 2020. 

This relief would introduce temporary stop-the-clock measures, for the period of March 15, 2020 to April 30, 2021, so that an employee's DSLP does not need to be terminated if the employee suspends a leave of absence to return to work or the employee chooses to delay their paid leave of absence. 

This relief would also temporarily relax certain borrowing restrictions placed on RPPs, permit retroactive contributions to an employee's money purchase account to replace required contributions that were not made in 2020 and allow RPPs to recognize full pensionable service for more employees experiencing a period of reduced work and pay during COVID-19.

For more information please see KPMG’s TaxNewsNow-Canada “Pension plans & DSLPs — New temporary relief measures”.

Temporary CRA guidance to address international travel restrictions

The CRA provided guidance to address cross-border tax issues caused by international travel restrictions. In its guidance, the CRA clarifies that prolonged stays in Canada that solely result from travel restrictions will not necessarily affect the tax residency or permanent establishment of a non-resident entity. The CRA also clarifies that such travel restrictions may not affect the tax residency of an individual, or the ability of a cross-border employee to qualify for treaty benefits on employment income. In addition, the CRA provides administrative relief to reflect delays in its processing of certain withholding tax waiver requests and section 116 certificates, due to COVID-19. The CRA’s guidance applies from March 16, 2020 to September 30, 2020. Taxpayers whose situation persists past September 30 are advised to contact the CRA.

The CRA also confirmed that the residence of a foreign affiliate of a Canadian corporation in a treaty jurisdiction for surplus calculation purposes will not necessarily change solely because the foreign affiliate's director cannot participate in board meetings due to the current COVID-19 travel restrictions. In addition, the CRA guidance states that certain non-resident employees may not lose their status as "qualifying non-resident employees" due to prolonged stays in Canada due to travel restrictions. As a result, their non-resident employer may not have to withhold and remit Canadian income tax on employment income they pay to those employees, if the employer is certified as a qualifying non-resident employer.

The CRA confirmed that it will generally consider the federal government's recommendation to Canadians to return to Canada as a "Travel Restriction".

The CRA said it will provide relief for certain non-resident employers who would be subject to Canadian withholding, remitting, and reporting obligations due to non-resident employees working remotely in Canada because of the travel restrictions.

For further details, see KPMG’s TaxNewsFlash-Canada “COVID-19 — New CRA relief addresses travel restrictions”, TaxNewsFlash-Canada “COVID-19 — CRA extends travel restrictions relief”, TaxNewsFlash-Canada “CRA further extends travel restrictions relief”, TaxNewsNow-Canada “COVID-19 — CRA expands international tax guidance” and TaxNewsNow-Canada “CRA offers additional relief for COVID-19 travel restrictions”.

Temporary electronic submission for certain requests

The CRA introduced temporary electronic submission processes to expedite urgent requests for certain international waivers, “section 116 certificates of compliance”, non-resident employer certification and clearance certificates.

For further details, see KPMG’s TaxNewsNow-Canada “Update — Clearance certificates & international waivers”.

Canada Emergency Rent Subsidy

Certain organizations affected by COVID-19 may be eligible to receive the new Canada Emergency Rent Subsidy. Under this relief,  businesses, eligible charities, and non-profits that experience a revenue drop would be able to claim a subsidy on eligible expenses from September 27, 2020 until June 2021. The government has provided details of the first stage of this relief until December 19, 2020, which would provide a subsidy, on a sliding scale of up to a maximum of 65% of eligible expenses, including rent and interest on certain commercial mortgages, Eligible expenses for each qualifying period are capped at $75,000 per location and are subject to an overall expense cap of $300,000 that would be shared among affiliated entities.

  • Elements of this subsidy mirror the CEWS including a sliding scale for subsidy amounts based on the organization’s revenue drop, the application periods and certain eligibility requirements
  • For businesses temporarily shut down by mandatory public health order, an additional top-up subsidy of 25% of eligible expenses may be available (see Lockdown Support below).
  • Organizations must apply for the subsidy on or before 180 days after the end of the qualifying period.

Lockdown Support

Organizations with locations that are temporarily forced to close, or temporarily have their business activities significantly restricted due to COVID-19 may also be eligible to receive a 25% Lockdown Support Subsidy on eligible expenses, which the government also refers to as a 25% “top-up” rent subsidy. To qualify for this additional subsidy, an organization must already qualify for the base Canada Emergency Rent Subsidy, and must either completely shut down a location, or cease some or all of the activities that account for at least 25% of the organization’s pre-pandemic revenues at that location for at least a week, under a specified public health order issued as a result COVID-19. Where organizations are subject to a public health restriction that cease activities for only a part of a qualifying period the subsidy would be pro-rated for the number of days in the period which the relevant location was affected.

For further details, see KPMG’s TaxNewsFlash-Canada “Canada Launches Rent Subsidy Support for Businesses”.

Longer-term income support for workers 

Canada Emergency Response Benefit (CERB)

The Canada Emergency Response Benefit (CERB) offers eligible individuals a temporary taxable benefit of $2,000, for a four-week period within the period beginning March 15, 2020 and ending on October 3, 2020, for up to 28 weeks in total.

The CERB is generally available to individuals who:

  • Are 15 years of age or older and reside in Canada
  • Have stopped working because of COVID-19, are eligible for EI regular or sickness benefits, or have exhausted their EI regular or fishing benefits between December 29, 2019 and October 3, 2020
  • Have earned at least $5,000 of employment or self-employment income in 2019 or within 12 months prior to date of their application for the CERB
  • Have not quit their job voluntarily

These individuals may also earn up to $1,000 of employment or self-employment income in each benefit period, while continuing to qualify for the CERB.

To find out more about this measure see the CRA website and the CRA’s Q&A about the CERB. Although the CERB has ended, the CRA is continuing to accept and process retroactive applications until December 2, 2020.

Interaction between EI, CERB and Supplementary unemployment benefit  (SUB)

Supplementary unemployment benefit Program (SUBP) 

Employers can use a Supplementary unemployment benefit Program (SUBP) plan to increase weekly income of their employees who are unemployed due to a temporary stoppage of work, training, illness or quarantine. Payments made under a SUB plan registered with Service Canada are not considered as remuneration and are not deducted from an employees' EI benefits.Service Canada has clarified that SUB payments in excess of $1,000 in a benefit period will disqualify an employee from receiving the CERB in the same period.

For further details, see KPMG’s TaxNewsFlash-Canada, “Employers - No SUB "Top Up" for CERB Relief Payments”.

After the CERB regime ends

Those who are eligible for EI regular and sickness benefits may still be able to access their normal EI benefits, if still unemployed, after the 28-week period covered by the CERB.

Temporary enhancements to EI program and new recovery benefits

Canadian individuals may benefit from new changes to temporarily simplify the Employment Insurance (EI) program. The federal government announced on August 20, 2020 that it will simplify the EI program to help eligible individuals transition from CERB to the EI system starting September 27, 2020.

Among other changes, the government will allow more individuals to qualify for EI by effectively lowering the insurable hours required to qualify and providing national minimum unemployment and benefit rates. In addition, the government has introduced new recovery benefits including the Canada Recovery Benefit, Canada Recovery Sickness Benefit and Canada Recovery Caregiving Benefit for eligible individuals who may not qualify for EI or are unable to fully return to work due to reasons related to COVID-19. 

For further details, see KPMG’s TaxNewsFlash-Canada, “Canada Temporarily Enhances EI Program as CERB Winds Up”, TaxNewsNow-Canada, “New recovery benefits for individuals”, and TaxNewsNow-Canada, “Canada passes new COVID-19 recovery benefits”.

Income support for individuals who need it most

Reduced Minimum Retirement Withdrawals

The Government has reduced the minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for the 2020 taxation year. This reduction also applies to the minimum amount under the money purchase provisions of Registered Pension Plans.

Alberta

Education Property Tax Freeze

The government will immediately cancel the decision made in Budget 2020 and will freeze education property taxes at last year’s level.

Tourism Levy Payments

Alberta announced on May 19, 2020 that hotels and other lodging providers may retain the tourism levy amounts collected from persons paying the levy on accommodation purchased between March 1 and December 31, 2020. Interest or fines for failure to remit the levy will not be assessed regarding these amounts. 

Extension of certain tax deadlines and time limits

The province has temporarily extended certain tax deadlines and time limits up to six months due to COVID-19 including: 

  • Taxpayers' applications to extend the time to file a notice objection with Alberta
  • Scientific Research and Experimental Development (SR&ED) and related investment tax credit claims

For further details, see TaxNewsNow-Canada “Alberta extends SR&ED and other tax deadlines”.

British Columbia

Certain Indirect Tax Measures Delayed

The scheduled April 1, 2020 increase to the provincial carbon tax, as well as the expanded PST registration requirements for Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunication services and the implementation of PST on sweetened carbonated drinks, will be delayed until April 1, 2021.

For further details, see TaxNewsNow-Canada “BC delays planned carbon tax & PST changes to 2021”.

Extended time limit to claim a sales tax refund

The four-year time limit for claiming a sales tax refund is being extended in some cases.

Reduction to Property Tax for Businesses

Business and light- and major-industry property classes will see their school tax cut in half.

Reduction to Property Tax for Businesses

Business and light- and major-industry property classes will see their school tax cut in half.

Deadline extensions for certain provincial tax credit claims

The province has announced deadline extensions for certain corporate and personal provincial tax credit claims for a maximum of six months, until December 31, 2020, at the latest. The extension applies to tax credit claims originally due on or after March 13, 2020.

For further details, see TaxNewsNow-Canada “BC extends provincial tax credit claim deadlines”.

B.C. mining flow-through share tax credit

The B.C. mining flow-through share tax credit eligibility period is extended from 24 months to 36 months for 2019 and 2020 flow-through share purchases. During this eligibility period, an expenditure must be incurred by the issuer to be renounced in favour of flow-through shares.

For further details, see TaxNewsNow-Canada “BC extends provincial tax credit claim deadlines”.

Employment tax credit and PST rebate on machinery

  • The province announced the introduction of a new employment incentive as well as a temporary PST rebate on select machinery and equipment, in its Economic Recovery Plan released September 17, 2020. 
  • The B.C. Increased Employment Incentive is a 15% refundable tax credit for qualifying employers who increase their payroll for low- to middle-income employees from the third to the fourth quarter of 2020, including employers who retain employees recently hired in the third quarter of 2020.
  • The new temporary PST rebate on select machinery and equipment will be equal to 100% of PST paid by eligible businesses on qualifying property between September 17, 2020 and September 30, 2021.

For further details, see TaxNewsNow-Canada “B.C. economic recovery plan — Tax credit & PST rebate”.

Manitoba

Deferral of Certain Indirect Tax Measures Announced in the 2020 Budget

The previously announced retail sales tax rate reduction, introduction of a green levy and the tobacco tax rate increase that were effective July 1, 2020 have all been deferred until further notice.

Ontario

Suspension of Ontario Audits

The government temporarily suspended audit interactions with most Ontario business and representatives for the following provincial taxes: (i) Employer Health Tax (ii) Tobacco Tax (iii) Fuel Tax (iv) Gas Tax (v) Beer, Wine & Spirits Tax (vi) Mining Tax (vii) Insurance Premium Tax (viii) International Fuel Tax Agreement (ix) Retail Sales Tax on Insurance Contracts and Benefit Plans (x) Race Tracks Tax. Ontario is gradually resuming regular audit integrations with Ontario businesses and representatives.

Regional Opportunities Investment Tax Credit

To support business investment in regions of the province where employment growth has been significantly below the provincial average, Ontario has introduced a new 10% refundable Corporate Income Tax credit.

Postponement of 2020 Property Tax Assessment Update

The Ontario government has announced that property assessments for the 2021 property tax year will continue to be based on the fully phased-in January 1, 2016 current values. This means property assessments for the 2021 property tax year will be the same as the 2020 tax year, unless there have been changes to a property.

Increase to the Employer Health Tax Exemption

The Ontario government  temporarily increased the Employer Health Tax exemption from $490,000 to $1M for 2020. Ontario subsequently announced on November 5, 2020 that it will make the increase permanent.

Postponement of Beer and Wine Tax Increases

Ontario will freeze beer tax rates until March 1, 2022 and retroactively cancel an increase in wine basic tax rates, legislated to occur on June 1, 2020 that the province had previously prevented from being applied between June 1, 2020 and December 31, 2020.

Prince Edward Island

Property Tax Relief Measures

PEI announced it will be deferring property tax payments and extending the property assessment appeal deadlines (for assessment year 2020) until December 31, 2020. The province will provide interest relief for tax year 2020, including all past due amounts.

The province will also suspend tax sale processes for the remainder of 2020.

Saskatchewan

Suspension of audit and compliance activity

Saskatchewan temporarily suspended its audit program and compliance activities.

Quebec

RRIF Relief

Quebec will harmonize with the federal government concerning its measure to reduce by 25% in 2020 the amount of mandatory withdrawal from a registered retirement income fund (RRIF).

Flexibility for income tax filings and payments

Registered charities and other donees

Tax Filing Deadline Extended to December 31, 2020, for charity information returns that would normally be filed in the period from March 17 to December 30, 2020.

Credit for employer contributions to the Health Services Fund (HSF)

Quebec has also granted 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 are eligible for the CEWS and that maintain an establishment in Quebec. 

The credit 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 CEWS, which extends from March 15 to November 21, 2020. The province recently announced that the HSF credit would be extended to December 19, 2020.

Canada tax developments table 1

Note that the CRA’s announcements do not affect payroll or withholding tax payment obligations (other than as noted above for certain amounts paid or payable to non-resident beneficiaries of trusts). 

Deferral of Sales Tax Remittance

  • All businesses could defer until June 30, 2020, any Goods and Services Tax/Harmonized Sales Tax (GST/HST) remittances that become owing on or after March 27, 2020 and before June 2020 without interest or penalty. Although the filing deadline for these returns does not appear to have been extended, the CRA allowed late filing until June 30, 2020, without interest or penalty.
  • Generally, the GST/HST applies to sales of most goods and services in Canada and at each stage of the supply chain. Vendors must collect the GST/HST and remit it (net of input tax credits) with their GST/HST return for each reporting period.

Administrative Comments

  • The new deadlines and administrative practices apply automatically.
  • The CRA announced it will not assess late-filing penalties if a 2019 individual income tax return or a trust or corporate income tax return that would otherwise be due on or after March 18, 2020 is filed by September 30, 2020
  • When the individual or the business expects to receive a tax or input tax credit refund, KPMG recommends that the relevant returns be filed as soon as possible.
  • In addition, the Canada Revenue Agency has indicated that it will be flexible on payment arrangements and will consider requests for relief of penalties and interest. To enter into a payment arrangement, visit the CRA’s website.

Deferral of Customs Duties

  • The due dates for account statements and payment of customs duties for March, April and May were extended to June 30, 2020. The CBSA also temporarily suspended trade compliance activity interaction with importers/exporters and their representatives until April 20, 2020 (i.e., all deadlines imposed in connection with a customs import verification were automatically extended by a period of time equivalent to the period of suspension.
  • The CBSA will continue to process applications for the duties relief program, and B2 requests for adjustments, which are unaffected by this temporary suspension. Importers that need information about their particular accounting and payment obligations may contact CBSA for more details.

Waiver of Interest on Existing Debt

The CRA has announced that it will waive arrears interest on existing tax debts related to:

  • Individual, corporation, and trust income tax returns from April 1, 2020 to September 30, 2020, and 
  • GST/HST returns from April 1, 2020 to June 30, 2020.

Audits

  • At the end of March 2020, the CRA announced that for the majority of businesses, the CRA would temporarily suspend audit interaction between taxpayers and representatives.
  • On May 28, 2020, the CRA updated its collections, audit, objections and appeals webpage that indicates the CRA is resuming a full range of audit work and adapting their practices to reflect the health and economic impacts of COVID-19. The CRA is prioritizing its commencement of audits focusing on higher dollar audits first, audits close to completion, and those with a strategic importance to governments, or Canada’s tax treaty partners.

Objections

  • The CRA effectively extended the deadline for Notices of Objections that were due between March 18, 2020 and June 30, 2020, to June 30, 2020.

Power to temporarily extend or suspend certain deadlines and time limits

  • Legislation has been enacted to permit the CRA to retroactively extend or suspend certain tax-related deadlines and time limits for up to six months, but no later than December 31, 2020, including time limits involving: 
    • Taxpayers' applications to extend the time to file a notice objection that normally must be made within one year after the deadline to file a notice of objection for both income tax and GST/HST purposes
    • Scientific Research and Experimental Development (SR&ED) and related investment tax credit claims
    • The period during which the CRA can (re)assess a taxpayer’s obligations for income tax and GST/HST
  • For more information see KPMG TaxNewsFlash-Canada “Canada Enacts Wage Subsidy Extension and Enhancements” (PDF 182 KB)

Support for Businesses 

Canada Emergency Wage Subsidy (CEWS)

The CEWS is a temporary government subsidy that will generally provide an amount to “eligible entities” of all sizes and sectors that have had their revenues decline during  COVID-19. The CEWS is currently available for nine qualifying four-week periods from March 15, 2020 to November 21, 2020. When the CEWS was initially introduced it generally provided an amount to eligible employers equal to 75% of employees’ eligible remuneration paid, up to a maximum of $847 per week per eligible employee, and required employers to have seen a revenue decline of at least 30% for the particular period (15% for March 2020) in order to qualify. However, beginning July 5, 2020 eligibility for the CEWS was expanded to employers who do not meet the previous 30% revenue threshold, and the amount of the subsidy has been replaced with a new two-part subsidy consisting of a “base” and a “top-up” amount. Under the new rules, the amount of the wage subsidy an eligible employer could qualify for varies depending on their revenue decline, with a maximum combined subsidy of up to 85% of employees’ eligible remuneration paid, up to a maximum of $960 per week per eligible employee. The amount of the subsidy will be gradually reduced throughout the remaining claim periods.

There is no overall limit on the wage subsidy amount that an eligible employer may claim under the CEWS, but the federal government has introduced anti-avoidance measures to ensure that the subsidy is not inappropriately obtained. 

CEWS applications must be made by January 31, 2021.

Refund for Certain Payroll Contributions (CEWS)

To the extent that an eligible employee is on leave with pay and the employer qualifies for the CEWS, 100% of the amounts paid for certain employer-paid contributions to Employment Insurance (EI), the Canada Pension Plan (CPP), the Quebec Pension Plan (QPP), and the Quebec Parental Insurance Plan (QPIP) may be refunded. 

An employer that is eligible for the CEWS and that has an establishment in Quebec may benefit from the credit for contributions to Health Services Fund (HSF) in respect of an employee who is on paid leave during the COVID-19 pandemic. The HSF credit will be in force retroactively for the entire period of the CEWS (March 15 to November 21, 2020).

The amount of the credit for contributions to the HSF will be equal to the total amount of the contributions to the HSF paid by an employer on the salary and wages paid to an employee on paid leave during a week included in the period beginning on March 15, 2020, and ending on November 21, 2020.

The amount of the credit for contributions to the HSF will be equal to the total amount of the contributions to the HSF paid by an employer on the salary and wages paid to an employee on paid leave during a week included in the period beginning on March 15, 2020, and ending on November 21, 2020. 

For further details, see KPMG’s TaxNewsFlash-Canada, “Employers — Canada’s 75% Wage Subsidy Now Enacted” TaxNewsFlash-Canada, “Employers — Prepare to Apply for 75% Wage Subsidy”, TaxNewsFlash-Canada “Canada Extends 75% Wage Subsidy and Refines Eligibility” and “Canada Enacts Wage Subsidy Extension and Enhancements” .

Temporary Wage Subsidy (TWS) 10% subsidy

The government provides “eligible employers” with a temporary wage subsidy for a period of three months beginning March 18, 2020. The subsidy is equal to a maximum of 10% of wages paid from March 18, 2020 to June 19, 2020, up to a maximum of $1,375 for each “eligible employee”, and up to a maximum of $25,000 per employer. 

“Eligible employers” include:

  • individuals with a business number;
  • NPOs;
  • registered charities;
  • certain partnerships;
  • Canadian-controlled private corporations eligible for the small business deduction.

An “eligible employee” is an employed person in Canada. 

If an eligible employer is eligible for the CEWS and the 10% TWS for a given period, the 10% TWS benefit in a particular period reduces the amount that can be claimed under the CEWS during this same period. Such employers may elect for the Temporary Wage Subsidy to be a percentage lower than 10% (including 0%) to calculate their subsidy entitlement.

Assistance received under the TWS (10%) reduces the amount of remuneration eligible for other federal tax credits calculated on the same remuneration.

For further details, see KPMG’s TaxNewsFlash-Canada “Federal COVID-19 Relief — More Details Released” ( PDF 205 KB).

75% Wage Support for certain universities and health research institutes

  • This new support was announced as part of $450 million in funding to help Canada’s academic research community during the COVID-19 pandemic.
  • This measure will help universities and health research institutes to retain research staff who are funded from industry or philanthropic sources and are unable to access some of the government’s existing COVID-19 support measures. 
  • The government announced it will provide a 75% wage subsidy to support employees of universities and health research institutes that are not eligible for the CEWS.
  • The government also said it would help universities and health research institutes maintain essential research-related activities by covering up to 75% of certain eligible costs, among other support measures.
  • This new subsidy will provide up to 75% of wage support per individual, to a maximum of $847 per week, and will be available even where employees’ work has been temporarily suspended.

For further details, see KPMG’s TaxNewsFlash-Canada 2020-48, “Canada Offers Wage Subsidy for Health Research Groups( PDF 177 KB).

Temporary Relief for Certain Pension Plan Contributions

The CRA will waive the 1% minimum employer contribution requirement for money purchase provisions of certain registered pension plans for the remainder of 2020. This relief will only apply to plans that are amended to suspend accruals under the plan for the year. This relief measure was announced on May 5, 2020 and is restricted to plans that submit an amendment to the Registered Plans Directorate.

Relief for certain mining companies

The Department of Finance announced on July 10, 2020 its proposal to extend the period that junior mining exploration companies and other issuers can incur eligible flow-through share expenses. Finance is also proposing to provide some relief for the “Part XII.6 tax” that generally applies to eligible Canadian exploration expenses that are renounced before they are incurred under the "look-back rule” by allowing these expenditures to be treated as if they were incurred up to one year earlier than the date they are actually incurred (depending on the date the flow-through share agreement was entered into). The legislative amendments to implement these proposals are expected to be released in due course.

For more information please see  KPMG’s TaxNewsNow-Canada “Relief announced for certain mining operations”.

Temporary relief for employer sponsored DSLPs and RPPs

Finance announced temporary relief measures for employers who sponsor deferred salary leave plans (DSLPs) or registered pension plans (RPPs) for their employees on July 2, 2020. 

This relief would introduce temporary stop-the-clock measures, for the period of March 15, 2020 to April 30, 2021, so that an employee's DSLP does not need to be terminated if the employee suspends a leave of absence to return to work or the employee chooses to delay their paid leave of absence. 

This relief would also provide relax certain borrowing restrictions placed on RPPs, permit retroactive contributions to an employee's money purchase account to replace required contributions that were not made in 2020 and allow RPPs to recognize full pensionable service for more employees experiencing a period of reduced work and pay during COVID-19.

For more information please see KPMG’s TaxNewsNow-Canada “Pension plans & DSLPs — New temporary relief measures”.

Temporary CRA guidance to address international travel restrictions

The CRA provided guidance to address cross-border tax issues caused by international travel restrictions. In its guidance, the CRA clarifies that prolonged stays in Canada that solely result from travel restrictions will not necessarily affect the tax residency or permanent establishment of a non-resident entity. The CRA also clarifies that such travel restrictions may not affect the tax residency of an individual, or the ability of a cross-border employee to qualify for treaty benefits on employment income. In addition, the CRA provides administrative relief to reflect delays in its processing of certain withholding tax waiver requests and section 116 certificates, due to COVID-19. The CRA’s guidance applies from March 16, 2020 to September 30, 2020. Taxpayers whose situation persists past September 30 are advised to contact the CRA.

For further details, see KPMG’s TaxNewsFlash-Canada “COVID-19 — New CRA relief addresses travel restrictions”, “COVID-19 — CRA extends travel restrictions relief” and “CRA further extends travel restrictions relief”.

Temporary electronic submission for certain requests

The CRA introduced temporary electronic submission processes to expedite urgent requests for certain international waivers, “section 116 certificates of compliance”, non-resident employer certification and clearance certificates.

For further details, see KPMG’s TaxNewsNow-Canada “Update — Clearance certificates & international waivers”.

Longer-term income support for workers 

Canada Emergency Response Benefit (CERB)

The Canada Emergency Response Benefit (CERB) offers eligible individuals a temporary taxable benefit of $2,000, for a four-week period within the period beginning March 15, 2020 and ending on October 3, 2020, for up to 28 weeks in total.

The CERB is generally available to individuals who:

  • Are 15 years of age or older and reside in Canada
  • Have stopped working because of COVID-19, are eligible for EI regular or sickness benefits, or have exhausted their EI regular or fishing benefits between December 29, 2019 and October 3, 2020
  • Have earned at least $5,000 of employment or self-employment income in 2019 or within 12 months prior to date of their application for the CERB
  • Have not quit their job voluntarily

These individuals may also earn up to $1,000 of employment or self-employment income in each benefit period, while continuing to qualify for the CERB.

To find out more about this measure see the CRA website and the CRA’s Q&A about the CERB.

'Interaction between EI, CERB and Supplementary unemployment benefit  (SUB)

 

Supplementary unemployment benefit Program (SUBP) 

Employers can use a Supplementary unemployment benefit Program (SUBP) plan to increase weekly income of their employees who are unemployed due to a temporary stoppage of work, training, illness or quarantine. Payments made under a SUB plan registered with Service Canada are not considered as remuneration and are not deducted from an employees' EI benefits. Service Canada has clarified that SUB payments in excess of $1,000 in a benefit period will disqualify an employee from receiving the CERB in the same period. For further details, see KPMG’s TaxNewsFlash-Canada, “Employers - No SUB "Top Up" for CERB Relief Payments”.

Workers that qualified for EI before March 15, 2020

Those who are already receiving EI regular and sickness benefits will continue to receive their benefits and should not apply to the CERB. If their EI benefits end before October 3, 2020, they could apply for the CERB once their EI benefits cease, if they are unable to return to work due to COVID-19.

Workers that became eligible for EI on or after March 15, 2020

Those who became eligible for EI regular or sickness benefits on March 15, 2020 or later, the claim will be automatically processed through the CERB.

After the CERB regime ends

Those who are eligible for EI regular and sickness benefits may still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.

Temporary enhancements to EI program

Canadian individuals may benefit from new changes to temporarily simplify the Employment Insurance (EI) program. The federal government announced on August 20, 2020 that it will simplify the EI program to help eligible individuals transition from CERB to the EI system starting September 27, 2020.

Among other changes, the government will allow more individuals to qualify for EI by effectively lowering the insurable hours required to qualify and providing national minimum unemployment and benefit rates. In addition, the government is proposing new recovery benefits for eligible individuals who may not qualify for EI or are unable to fully return to work due to reasons related to COVID-19. The government says it will soon introduce legislation to enact these benefits.

For further details, see KPMG’s TaxNewsFlash-Canada, “Canada Temporarily Enhances EI Program as CERB Winds Up”.

Canada Emergency Student Benefit (CESB) 

The Canada Emergency Student Benefit (CESB) provides a benefit, for up to four months between May and August 2020, to certain students who do not qualify for the CERB or EI benefits for the same eligibility period. 

The CESB provides a benefit of up to $1,250 per month. Students with a disability or with dependents will receive an additional $750 for a total of $2,000 per month. To be eligible for the CESB, students must: 

  • Be enrolled, at any time between December 1, 2019 and August 31, 2020 in a post-secondary educational program that leads to a degree, diploma or certificate; or 
  • Have graduated from secondary school in 2020 and have applied for enrollment in a post-secondary program that is scheduled to begin before February 1, 2021.

Further, in order to be eligible, students must be unable to work, to find work or to earn a income from employment or self-employment of more than $1,000 during the four-week period the individual is applying for the CESB. Such inability must stem from reasons related to COVID-19. 

The application is submitted for a four-week period falling within a prescribed period.  All applications for this benefit must be submitted before September 30, 2020.

For further details, see KPMG’s TaxNewsNow-Canada, "Student relief enacted". Further clarifications regarding the application procedures are here.

Income support for individuals who need it most

GST Credit

The Government provided a one-time special payment on April 9, 2020 through the GST credit program. This payment effectively doubled the maximum annual GST credit payment amounts for the 2019-20 benefit year. 

The average boost to income for those benefitting from this measure will be close to $400 for single individuals and to $600 for couples. Individuals eligible for the GST credit should have received the payment automatically.

Increased Canada Child Benefit (CCB) payment 

The Government provided a one-time increase to the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, of $300 per child. 

Eligible individuals received the one-time increase in May 2020.

Reduced Minimum Retirement Withdrawals

The Government has reduced the minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for the 2020 taxation year. This reduction also applies to the minimum amount under the money purchase provisions of Registered Pension Plans.

Additional Relief for Seniors

The Government provided a one-time payment of up to $500 to seniors to help offset cost increases due to COVID-19.

Seniors who qualified for Old Age Security (OAS) received a one-time tax-free payment of $300, and those eligible for the Guaranteed Income Supplement (GIS) received an additional $200 in July 2020.

For further details, see KPMG’s TaxNewsNow-Canada, "Additional COVID-19 relief for seniors"

Additional Relief for Individuals with Disabilities

Individuals with a valid disabilities tax credit certificate as of June 1, 2020 and certain other individuals receiving disability benefits will automatically receive a one-time, tax-free payment of up to $600 to help offset any cost increases due to COVID-19.

For further details, see KPMG’s TaxNewsNow-Canada, "New COVID-19 relief for Canadians with disabilities".

Alberta

Deadline Extension for Corporate Tax Payments and Returns

  • Alberta corporations with income tax balances owing on or after March 18, 2020, or instalment payments due between March 18, 2020 and September 30, 2020, may defer making these payments until September 30, 2020.
  • Alberta will waive arrears interest accruing from March 18, 2020 to September 30, 2020 on existing debts owing pursuant to the Alberta Corporate Tax Act.
  • The filing due date for an Alberta Corporate Income Tax Return (AT1) has also been extended to June 1, 2020 for all Alberta Corporate Income Tax Returns due after March 18, 2020 and before June 1, 2020.
  • The filing due date for an Alberta Corporate Return (AT1) has been extended to September 1, 2020 for an AT1 that would otherwise have a filing deadline in June, July or August, 2020. 
  • Alberta also announced that it will not charge a late-filing penalty if a current year Alberta Corporate Income Tax Return (AT1) is filed by September 30, 2020.

Education Property Tax Deferral for Business

  • Effective March 23, 2020, the government will defer education property tax for businesses for six months.
  • The government encourages commercial landlords to pass on these savings to their tenants through reduced or deferred payments. This will help employers continue to manage their debts, pay their employees and stay in business
  • The government expects municipalities to set education property tax rates as they normally would, but defer collection. Deferred amounts will be repaid in future tax years.
  • Businesses capable of paying their taxes in full are strongly encouraged to do so. This will assist the province in being able to support Albertans through this pandemic.

Education Property Tax Freeze

The government will immediately cancel the decision made in Budget 2020 and will freeze education property taxes at last year’s level.

Deferral of Tourism Levy Payments

Hotels and other lodging providers in Alberta can delay paying the tourism levy until August 31, 2020 for amounts due in respect of the February 2020 collection period (monthly remitters) or in respect of January and February 2020 (for quarterly remitters).

Alberta announced on May 19, 2020 that hotels and other lodging providers may retain the tourism levy amounts collected from persons paying the levy on accommodation purchased between March 1 and December 31, 2020. Interest or fines for failure to remit the levy will not be assessed regarding these amounts. 

Deadline Extension - IFTA Quarterly Tax Returns

International Fuel Tax Agreement (IFTA) Quarterly Tax Returns for the first calendar quarter of 2020 are now due on June 30, 2020 (originally April 30, 2020). The extension does not apply to the relevant fuel tax remittances which will still be due on April 30, 2020.

Deadline Extension for Alberta Notice of Objections

Alberta has extended the filing deadline for a Notice of Objection (Form AT97) to June 30, 2020 (for objections that otherwise would have a filing deadline after March 18, 2020 and before June 30, 2020).

British Columbia

Expand the B.C. Climate Action Tax Credit

The one-time enhanced July 2020 payment is:

  • Up to $218, an increase of up to $174.50 from the regular tax credit amount, for and individual, their spouse or common-law partner, or their first child in a single parent family
  • Up to $64, an increase of up to $51.25 from the regular tax credit amount, for each additional child

The enhanced July 2020 payment also has an increased income threshold amount before the tax credit is reduced to zero.

Deferral of Employer Health Tax Payments

Effective March 23, 2020, businesses with a payroll over $500,000 can defer their employer health tax return and final payments for the 2019 calendar year until September 30, 2020. Businesses with a payroll under this threshold are already exempt from the tax.

The province is also providing deferrals for instalment payments for the 2020 calendar year. 

Deadline Extension for Certain Indirect Tax Returns and Remittances

The Province is extending tax filing and payment deadlines for the following taxes until September 30, 2020 (if they were originally due after March 23, 2020 and before September 30, 2020):(i) Provincial sales tax (PST), (ii) Municipal and regional district tax on short-term accommodation, (iii) Tobacco Tax, (iv)  Motor fuel tax, (v) Carbon tax

Certain Indirect Tax Measures Delayed

The scheduled April 1 increase to the provincial carbon tax, as well as the expanded PST registration requirements for Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunication services and the implementation of PST on sweetened carbonated drinks, will be delayed until April 1, 2021.

Extended time limit to claim a sales tax refund

The four-year time limit for claiming a sales tax refund is being extended in some cases.

Reduction to Property Tax for Businesses

Business and light- and major-industry property classes will see their school tax cut in half.

Manitoba

Deadline Extension for RST returns and remittances

Manitoba announced that the filing deadline for certain monthly retail sales tax (RST) returns is extended to October 20, 2020 (from April 20, May 20, June 22, July 20, August 20 and September 21, 2020). This extension applies to small- and medium businesses with monthly RST remittances of no more than $10,000 per month. In addition, Manitoba has extended the deadline for businesses that file RST returns quarterly to October 20, 2020 (from April 20 and July 20, 2020).  

Manitoba advises that where these eligible businesses were not able to file and remit their February RST return by the due date on March 20, 2020, they will not be subject to late filing penalties and interest will not be charged until after October 20, 2020.

RST on Certain Property Insurance Contracts Eliminated

Manitoba has eliminated RST on certain property insurance contracts effective July 1, 2020. In general, the new RST exemption applies to new and renewed insurance contracts that come into effect after June 30, 2020 and relate to (i) Real property located in Manitoba, including the contents of: a condominium unit, a unit of a housing cooperative, leased residential premises, or a leased commercial premises (unless all or substantially all of the contents insured under the contract are inventory) (ii) Mortgage insurance and (iii) Title insurance related to a property located in Manitoba. 

Deferral of Health and Post secondary Education Tax Levy Filings and Remittances

Manitoba announced that Health and Post Secondary Education Tax Levy (also known as HE Levy) returns for small and medium businesses with monthly HE Levy remittances of no more than $10,000 per month that would normally be due on April 15, May 15, June 15, July 15, August 17 and September 15, 2020 will now be due on October 15, 2020.

Businesses that qualify for the above filing extension that were not able to file and remit their February HE Levy tax return by the March 16, 2020 due date will not be assessed a late filing penalty and interest will not be applied until after October 15, 2020.

Deferral of Certain Indirect Tax Measures Announced in the 2020 Budget

The previously announced retail sales tax rate reduction, introduction of a green levy and the tobacco tax rate increase that were effective July 1, 2020 have all been deferred until further notice. 

Deadline Extension - IFTA Quarterly Tax Returns

International Fuel Tax Agreement (IFTA) Quarterly Tax Returns for the first and second calendar quarters of 2020 are now due on November 2, 2020 (originally due April 30, 2020 and July 31, 2020). Interest will continue to apply on all outstanding tax debts established prior to the April remittance deadline.

Seniors Economic Recovery Credit

Manitoba will provide a $200 one-time, refundable tax credit to every Manitoban aged 65 and older. Manitoba Finance will proactively mail payment cheques as a credit advance to seniors to each senior who filed a 2018 income tax return prior to April 1 2020.

Deadline Suspended – Appeal of Manitoba Tax Assessments

Manitoba has temporarily suspended the 90-day time period to appeal tax assessments to the earlier of September 21, 2020 or the end of the state of emergency associated with COVID-19. The suspension of the time period begins on March 20, 2020 (when Manitoba declared a state of emergency).

New Brunswick

Waiving late penalties on property taxes

Though business property taxes must be paid by May 31, late penalties will be reviewed on a case-by-case basis to see if the penalty can be waived due to undue financial challenges related to COVID-19, such as having to close a business due to COVID-19. Applications for the program will be available June 1, 2020. The deadline to apply for the program is July 31, 2020.

Newfoundland and Labrador

Deadline Extended for Fuel Tax Exemption Permits

The expiry date for Fuel Tax Exemption Permits, which allows permit holders to purchase tax-exempt marked gasoline and light fuel oil, which was set to expire on March 31, 2020 has been extended to August 31, 2020.

Gasoline and carbon product retailers throughout the province are authorized to accept such permits and continue to sell marked diesel and light fuel oil exempt of gasoline and carbon tax to these permit holders up to and including August 31, 2020.

Deadline Extended for Tax Return Filing Deadlines 

International Fuel Tax Agreement returns from interjurisdictional carriers for the first quarter of 2020 (January 1 to March 31, 2020), due on April 30, 2020 are now due and payable on June 1, 2020.

The filing deadline for other tax returns (except for tax returns required from interjurisdictional carriers) otherwise due March 20, 2020 to July 31, 2020, are now due August 20, 2020. The extension applies to the tax returns including: (i) Gasoline tax (ii) Carbon tax (iii) Health and Post-Secondary Education Tax (iv) Insurance Companies Tax (v) Mining and Mineral Rights Tax (vi) Tax on Insurance Premiums (vii) Tobacco tax.

Ontario

Interest and Penalty Relief

  • Tax filing and remittance deadlines will remain the same. However, beginning April 1, 2020 to October 1, 2020, penalties and interest will not apply to Ontario businesses that miss any filing or remittance deadline under select provincial taxes. This extends the province’s initial waiver which would have ended August 31, 2020.
  • The following provincial taxes are included in the interest and penalty relief period:(i) Employer Health Tax (ii) Tobacco Tax (iii) Fuel Tax (iv) Gas Tax (v) Beer, Wine & Spirits Tax (vi) Mining Tax (vii) Insurance Premium Tax (viii) International Fuel Tax Agreement (ix) Retail Sales Tax on Insurance Contracts and Benefit Plans (x) Race Tracks Tax
  • If a business is unable to file their return or remittance during the relief period, they do not need to contact or notify the Ministry of Finance. Penalties and interest will be waived automatically for all late returns or remittances by Ontario businesses during the relief period
  • Ontario businesses are also not required to provide the Ministry of Finance with information about the impact of COVID‑19 on their staff or daily operations during the relief period. 
  • The relief period does not include business accounts with outstanding taxes, interest or penalties owing to the government from previous filing periods. Existing debts from before the relief period will continue to accrue interest.

Suspension of Ontario Audits

The government temporarily suspended audit interactions with most Ontario business and representatives for the following provincial taxes: (i) Employer Health Tax (ii) Tobacco Tax (iii) Fuel Tax (iv) Gas Tax (v) Beer, Wine & Spirits Tax (vi) Mining Tax (vii) Insurance Premium Tax (viii) International Fuel Tax Agreement (ix) Retail Sales Tax on Insurance Contracts and Benefit Plans (x) Race Tracks Tax. Ontario is gradually resuming regular audit integrations with Ontario businesses and representatives.

Regional Opportunities Investment Tax Credit

To support business investment in regions of the province where employment growth has been significantly below the provincial average, Ontario has introduced a new 10 per cent refundable Corporate Income Tax credit.

Educational Property Tax Deferrals

The government is deferring the June 30, 2020 quarterly property tax remittance property municipalities make to school boards by 90 days.

This measure has been proposed to encourage municipalities to introduce measures to provide property tax relief, for example, by allowing taxpayers to defer property tax payments.

Postponement of 2020 Property Tax Assessment Update

The Ontario government has announced that property assessments for the 2021 property tax year will continue to be based on the fully phased-in January 1, 2016 current values. This means property assessments for the 2021 property tax year will be the same as the 2020 tax year, unless there have been changes to a property.

Temporary Increase to the Employer Health Tax Exemption

Ontario government is temporarily increasing the Employer Health Tax exemption from $490,000 to $1 million for 2020.

Postponement of Beer and Wine Tax Increases

Ontario will delay the increase of the beer tax rate that was scheduled to apply starting June 1, 2020 until December 1, 2020.

Ontario has also suspended wine tax rate increases (which would apply to certain wines) that were scheduled to apply starting June 1, 2020 until December 31, 2020. 

Flexibility for Non-Resident Speculation Tax Rebates

Ontario is providing administrative relief for individuals seeking a Non-Resident Speculation Tax (NRST) rebate by extending the period of time within which a person must occupy a property as their principal residence to 60 days after the final day of the state of emergency.

This flexibility applies only to purchases that occur from January 17, 2020 to the final day of the state of emergency.

Prince Edward Island

Property Tax Relief Measures

PEI announced it will be deferring property tax payments and extending the property assessment appeal deadlines (for assessment year 2020) until December 31, 2020. The province will provide interest relief for tax year 2020, including all past due amounts.

The province will also suspend tax sale processes for the remainder of 2020 and will delay mailing of provincial tax bills for 2020 until June.

Quebec

RRIF Relief

Quebec will harmonize with the federal government concerning its measure to reduce by 25% in 2020 the amount of mandatory withdrawal from a registered retirement income fund (RRIF).

CNESST is implementing exceptional flexibility measures for businesses

  • Employers have until August 31, 2020 to pay their Statement of Account related to the CNESST contribution. In addition, no penalty or interest will be charged during this period.
  • The deadline for submitting the 2019 statement of wages is extended. Employers have until June 1, 2020 to submit it.
  • There will be tolerance in the application of time limits for the filing of complaints, for example for the transmission of documents necessary for an investigation.

Flexibility for income tax filings and payments

GST/QST remittances that would normally be made in the period from March 27 to June 1, 2020 were extended until June 30, 2020. The filing deadline for these returns was not extended. However, Revenu Québec allowed late filing until June 30, 2020, without any interest or penalty, for a return that would normally have been filed in the period from March 27 to June 1, 2020. Note the delay for remitting other indirect taxes such as payroll and fuel tax, remain unchanged and is not subject to administrative relief. 

table 2

Credit for employer contributions to the Health Services Fund (HSF)

Quebec has also granted 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 that are eligible for the CEWS and that maintain an establishment in Quebec. 

The credit 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 CEWS, which extends from March 15 to November 21, 2020.

Saskatchewan

Deadline Extension for PST remittances

Saskatchewan businesses who are unable to remit their Provincial Sales Tax (PST) due to cash flow concerns related to COVID-19 will have relief from penalty and interest charges as follows:

  • Monthly filers may defer payment of amounts due for February, March and April 2020 reporting periods to July 31, 2020
  • Quarterly filers may defer payments of amounts due for the January 1, 2020 to March 31, 2020 reporting period to July 31, 2020

Finance has indicated that PST returns must still be filed each month/quarter (with or without payment) if taxpayers are able to do so. 

To qualify for the PST deferral and waiver of penalties and interest, businesses must make full PST payments or have a payment arrangement in place by July 31, 2020. Businesses are not required to submit a request for relief from penalty and interest changers for these returns. 

Suspension of audit and compliance activity

Saskatchewan has suspended its audit program and compliance activities.

Northwest Territories

Interest Relief

Northwest Territories announced that it will waive interest charges on late tax returns between March 15, 2020 and June 30, 2020. 

Yukon

Property tax payment deadline extension

The Government of Yukon has extended the deadline for property tax payments for citizens and businesses to September 2, 2020 (for balances originally due July 2, 2020).