COVID-19: Summary of Quebec and Federal Tax Measures and Financial Assistance

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The ongoing COVID-19 pandemic is forcing different levels of government to institute measures to reduce the burden on taxpayers and protect the economy.

The following is a summary of the principal measures announced to date: 

Measures to ease tax deadlines in Quebec and Canada

On March 18, 2020, the Minister of Finance of Canada announced the extension of filing deadlines for certain income tax returns and payment deadlines for certain amounts owing for individuals, trusts and corporations for federal income tax purposes. The Minister of Finance of Quebec matched the federal deadline extensions for provincial income tax purposes on the same day.

Individuals New deadlines (Quebec and Canada)
Income tax return filing

June 1, 2020

Payment of income taxes

For any balance that would normally be due on March 18, 2020, the new payment date is extended to September 1, 2020

QPIP/QPP/
HSF/RAMQ
contributions

For any balance that would normally be due on March 18, 2020, the new payment date is extended to September 1, 2020 (Quebec only)

Instalment payments

For any balance that would normally be due on March 18, 2020, the new payment date is extended to September 1, 20200

 

Trusts (other than specified investment flow-through trusts) New deadlines (Quebec and Canada)
Income tax return filing

May 1, 2020

Payment of income taxes

For any balance that would normally be due on March 18, 2020, the new payment date is extended to September 1, 2020

QPIP/QPP/
HSF/RAMQ
contributions

For any balance that would normally be due on March 18, 2020, the new payment date is extended to September 1, 2020 (Quebec only)

Instalment payments

For any balance that would normally be due on March 18, 2020, the new payment date is extended to September 1, 2020

 

Business corporations New deadlines (Quebec and Canada)
Income tax return filing

No change

Payment of income taxes

For any balance that would normally be due on March 18, 2020, the new payment date is extended to September 1, 2020

Instalment payments

For any balance that would normally be due on March 18, 2020, the new payment date is extended to September 1, 2020

 

It should be noted that no announcements have been made with respect to the remittance of source deductions, the filing of tax reports (GST/QST) and the payment of taxes.

Other measures taken in Quebec

Suspension of extinctive prescription in civil matters

On March 15, 2020, through Order 2020-4251, the Minister of Justice of Quebec and the Chief Justice of Quebec suspended extinctive prescription and terms for forfeiture in civil matters until the health emergency declared by the Government of Quebec on March 13, 2020 comes to an end. Proceedings in civil matters are also suspended during this period, with the exception of matters deemed urgent, such as injunctions and habeas corpus applications.

Temporary Concerted Action Program for Businesses

On March 20, the Government of Quebec announced a temporary program administered by Investissement Québec to facilitate access to credit for businesses in the form of a loan guarantee. 

Businesses already clients of Investissement Québec can communicate directly with their project director or account manager by email or by phone using the online directory.

Businesses that are not clients of Investissement Québec and that desire to benefit from such a loan guarantee must fist contact their financial institution which will itself contact an Investissement Québec account manager.

Any questions regarding a specific situation regarding this program should be directed to Investissement Québec’s client center, reachable at 1 844-474-6367.

Temporary Aid for Workers Program: $573/week

The Government of Quebec announced a temporary aid program for workers needing to self-isolate, consisting of a lump sum of $573 per week, tax-free, for an eligible worker for a period of 14 days of isolation. An extension to 28 days will be possible.

Eligibility

To be eligible for this program, workers must:

  • Be residents of Quebec
  • Be in isolation because they:
    • Have contracted the virus or are showing symptoms
    • Have been in contact with an infected person, and/or
    • Have returned from abroad
  • Be suffering a loss of income due to such isolation
  • Not be compensated by their employer
  • Not be compensated by private insurance
  • Not be covered by government programs, including federal Employment Insurance
  • File an application by filling out the appropriate form (available as of March 19, 2020)

Deferral of tax account payments in many Quebec municipalities

Many Quebec municipalities have decided to defer municipal tax account payment deadlines in order to reduce the burden on taxpayers. Here are the new deadlines set by some of them:

Municipalities New deadline for the next tax account payment
Montréal

July 2, 2020

Lévis

Interest on balances owing will be suspended until May 30, 2020

City of Québec

August 4, 2020

Trois-Rivières

September 8, 2020

Longueuil

May 6, 2020

Gatineau

August 31, 2020

 

Other measures taken at the federal level

$10 billion in additional support

The federal government has introduced a Business Credit Availability Program to encourage private sector financing through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) and is coordinating financing solutions and credit insurance with an additional $10 billion in support.

Helping businesses keep their workers

The government will provide eligible small employers with a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of the remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.

Businesses will be able to benefit from this measure rapidly by reducing their remittances of income tax withheld from their employees’ remuneration.

While the eligibility criteria for this measure have not yet been published, the government has indicated that corporations eligible for the small business deduction1, as well as non-profit organizations and charities, will have access to it. 

Suspension of tax audits

It is important to note that the Canada Revenue Agency has announced that it will not contact any small or medium businesses to initiate any post-assessment GST/HST or income tax audits for the next four weeks. 

For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction.

Easing of liquidity reserve requirements in financial institutions ($300 billion in additional funds)

The Office of the Superintendent of Financial Institutions (OSFI) is relaxing the rules on the reserve that banks must hold for the purpose of stability. This measure will increase the lending capacity of Canada’s major banks by $300 billion and improve access to credit for borrowers.

Buyback of Government of Canada bonds

The Bank of Canada has announced that it is expanding the scope of its Government of Canada bond buyback program to add liquidity to the market.

Employment Insurance

The federal government has established the Emergency Care Benefit for workers without paid sick leave who are sick, quarantined or forced to stay home to care for their children. This benefit provides up to $900 bi-weekly for up to 15 weeks.

Eligible persons are as follows:

  • Workers, including the self-employed, who are quarantined or sick with COVID-19 but who are not eligible for EI sickness benefits
  • Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not qualify for EI sickness benefits
  • Parents with children who require care or supervision because of school closures and are unable to earn employment income, irrespective of whether they qualify for Employment Insurance or not

The application for this benefit will be available in April 2020, and will require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility. No medical certificate will be required for quarantined persons applying.

A new toll-free telephone number for Employment Insurance inquiries is now available: 1-833-381-2725.

Persons who are unable to apply for Employment Insurance because they are in quarantine may apply at a later date and will have their Employment Insurance application backdated to cover the period.

Other measures

Several other measures will be introduced, such as an increase in the Canada Child Benefit, an increase in the maximum amount of the GST credit, a reduction of the minimum amount for withdrawals from Registered Retirement Income Funds, an extension of student loan repayments and several targeted credits.

The Lavery team is available to answer all your questions regarding the announced emergency measures and any aspect relating thereto.

 

  1. Normally, to be eligible for the small business deduction, a corporation must be a Canadian-controlled private corporation and its taxable capital (including that of its group of related corporations) must not exceed $15 million.
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