Updated June 19, 2020
Below please find a recap on the various government programs, resources and filing deadlines available for small businesses and individuals. Announcements on new programs and changes have been on a daily basis so we will attempt to keep this updated:
Tax Filing Extensions
For those not able to work or laid off
Canada Emergency Response Benefit (CERB)
Filing Extensions – Income Tax
Registered Charities with year ends between September 30 2019 to June 30 2020 - Charity Return due date extended to December 31, 2020.
Normal filing deadlines remain in place – still must file on normal due date.
However, payments of HST owing can be deferred until June 30 without interest.
Payroll Deduction Remittances
Normal filing and payment due dates for Payroll Deduction Remittances. However, may be eligible for a reduction of remittance with the 10% Temporary Wage Subsidy (below).
10% Temporary Wage Subsidy
75% Canada Emergency Wage Subsidy
Available to all businesses regardless of size, as well as non-profits, if their revenue for the month has dropped 30% from that same month in the previous year or from their Jan/Feb 2020 average.
More details on the 75% wage subsidy here.
Business Credit and Loan Programs
The government has established a Business Credit Availability Program through Business Development Bank of Canada (BDC) and Export Development Canada (EDC). BDC and EDC are working with the banks to coordinate getting this credit to small businesses. The main program for small businesses is the:
Canada Emergency Business Account (CEBA)
More information can be found here.
We have found the Canadian Federation of Independent Business (CFIB) a great resource for information for businesses dealing with this crisis – see a link to their page here.
The government today announced a number of tax filing and support measures to assist Canadians facing hardship as result of the COVID-19 outbreak. Some main measures are summarized below:
Extended Tax Filing Deadlines
For individuals, the return filing due date will be deferred until June 1, 2020. (However, the Agency encourages individuals who expect to receive benefits under the GSTC or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.) For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.
Extended Tax Payment Deadlines
An extension to allow all taxpayers (individuals and businesses) to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18th, 2020 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
For businesses and corporations - This applies for income tax only and not for your GST/HST or payroll deductions. Payroll deductions, however, may be reduced with respects with a wage subsidy discussed below.
Wage Subsidy for Small Businesses
To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of 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 immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
BDC (Business Development Bank of Canada) is also offering liquidity support for small and medium sized businesses impacted by COVID-19 with working capital loans and other financing options. See more details on their webpage.
Emergency Care Benefit
For Canadians without paid sick leave, who are sick, quarantined or forced to stay home to care their children, the Government is providing a benefit up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to:
Enhanced GST Credit
For over 12 million low- and modest-income families, who may require additional help with their finances, the Government is proposing to provide a one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC). This will double the maximum annual GSTC 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 close to $600 for couples.
Enhance Canada Child Benefit
the Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child. The overall increase for families receiving CCB will be approximately $550 on average; these families will receive an extra $300 per child as part of their May payment.
Canada’s large banks have confirmed that they may on a case by case basis allow for a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products.
Student Loan Relief
Placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.
For Seniors - Reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors’ retirement savings.
The full details and including other measures can be found the Department of Finance website here.
Brabant + Kretzschmann, Chartered Professional Accountants
Midland ON, - updated March 18/2020
Our office is open and is continuing to serve our clients during this unprecedented time. However we will be implementing procedures to hopefully limit the risk and possible spread of COVID-19 in our community.
If you have recently been out of the country, or show symptoms of fever, cough or shortness of breath, we ask that you follow Health Canada’s guidelines and self-isolate for two weeks prior to visiting our office and dropping off, or picking up your tax returns.
We are taking precautions with staff and clients health in mind to try and keep the possible spread of COVID19 minimized. This may mean arranging a specific time for you to pick up and sign your returns in order to limit the number of clients visiting the office, arranging a secure dropbox outside the door for you to drop off your tax information, reducing or limiting face to face interactions and meetings and instead arranging telephone calls to discuss specific situations or questions that you may have. We will also look at expanding electronic sharing of information in a secure manner.
On March 18th, 2020, the government made the announcement that the individual tax filing deadline will be extended to June 1, 2020. In addition, the tax payment deadline will be will be deferred to August 31 if you are owing tax. This relief would apply to income tax balances due, as well as instalments, No interest or penalties will accumulate on these amounts during this period.
We want to assure you that we will continue to do our utmost to have your tax returns prepared and completed on time as you would expect and continue to be of service to our clients.
Brabant + Kretzschmann, Chartered Professional Accountants is pleased to welcome Matthew Nault CPA CA CBV CFF to the firm!
Matt obtained his Chartered Professional Accountant (CPA CA) designation in 2010 and later specialized in business valuations, earning his Chartered Business Valuator (CBV) designation in 2014. Matt is also certified in financial forensics under the American Institute of Certified Professional Accountants. Matt originally hails from Toronto and has earned experience working at several accounting and business valuation firms in the Toronto and Hamilton areas. Matt is excited to be moving to Midland along with his better half Tonya (who is originally from Midland), his young son Calvin and a new addition to the family coming this spring!
Matt will be working closely with Dennis and Martin on all aspects of client files and will bring an additional asset to the firm with his business valuation expertise. Please join us in welcoming Matt to Brabant + Kretzschmann!
Ontario introduced its new method of calculating statutory holiday pay at the beginning of 2018. The government’s reasoning being that the existing rule was too complicated, so needed to simplify it.
Under the previous rule, stat holiday pay would be calculated by taking the last 4 weeks’ pay and dividing by 20. Complicated right? The new rules say that you now take the previous week’s pay and divide by the number of days worked in the previous week. (Note that part days are equivalent to full days.)
This has led to some head scratching results. Let’s take two examples:
Jim works full weeks on a reduced schedule in order to look after his kids before and after school. He works 4 hours per day 5 days a week (total 20hrs) and is paid $20/hr – total of $400/week. Under the old system, Jim would be paid $80 for Canada Day as a stat holiday. Under the new system, he would also be paid $80 stat holiday. The $80 holiday pay represents the typical daily pay Jim gets – 4hs @ $20.
Jane, works full days, but only 3 days a week. 7hrs on Wed and Thurs and 6hrs on Friday for a total of 20hrs/week and also earns $20/hr – total of $400/week - the same as Jim. Under the old system, she would have also received $80 stat holiday pay – same amount as Jim, which makes sense given they work the same amount of hours per week, are at the same pay rate and earn the same in a typical week.
However under the new system, Jane would now receive $133.33 of stat holiday pay, ($400 / 3 days) which is $53 more than Jim! Jim can’t be too happy about that.
In addition, Jane works at another job on Mondays and Tuesdays, 7 hrs per day for 2 days at $20/hr. Under the new rules, that employer would also need to pay Jane $140 statutory holiday pay on Canada Day. So on Canada day, Jane has earned $273, basically two full days pay. Meanwhile a typical full time worker, 35 hrs/week at $20 would get $140.
Where is the logic in this?
Our office will be closed on Friday December 8th for a staff training and professional development day.
Ontario is implementing sweeping employment changes to increase the minimum wage and other workplace rules with respects to vacation time, leaves, and shift scheduling.
Minimum Wage will increase from the current $11.60 to $14/hr starting January 1, 2018 and to $15/hr on January 1, 2019. Minimum wage changes are summarized below:
Basic Minimum Wage
Students under 18
In addition, there will be vast changes to other employment rules beginning in 2018:
3 Weeks Vacation Pay after 5 years
Employees will now be entitled 3 weeks or 6% paid vacation after 5 years service. This extends the current 2 week or 4% minimum for all employees.
Paid Personal Emergency Days plus other Leaves
Employees will be entitled 10 personal emergency leave days per year, of which 2 will be paid. Formerly this was only a requirement for employers with over 50 employees. Now it applies to all employers.
Employers will not be allowed to request a doctors note from the employee for taking personal emergency leaves.
There are also changes to unpaid leaves of absences for situations involving family medical leave, death of a child and domestic violence.
Statutory Holiday Pay
The calculation for statutory holiday pay will be simplified
Penalties for Misclassifying Employees as "Independent Contractors"
Employers who misclassify employees as "independent contractors", in order to skirt labour laws, will be subject to fines, penalties and possible prosecution.
Equal Pay for Equal Work Provisions
The legislation would ensure that casual, part-time, temporary and seasonal employees are paid equally to full-time employees when performing the same job for the same employer.
Dear Mr Stanton,
As I am sure you are already very aware, the government's proposed tax changes, that have been painted as "closing loopholes for the rich", will severely impact the majority of small business corporations - of any size and wealth, including most of our business clients here in the Midland Penetanguishene area.
Small business owners take many risks, and already pay and administer a high load of tax when you take into effect payroll taxes, WSIB, higher property tax ….the list goes on. They also take on the administration of collecting and remitting taxes on behalf of the government. And now the government paints these entrepreneurs in a negative light and says they are unfairly taking advantage of loopholes.
I feel that the proposed rules to crack down on dividend sprinkling really need to be re-thought. The proposed rules, as they stand, would be a nightmare to administer as far as the reasonability tests proposed.
These rules would unnecessarily punish local doctors, who several years ago gave up rate increases with the province in order to be allowed to incorporate as a concession to the lower rates.
These rules will unfairly impact most small business corporations who may have one spouse not as involved in the day to day business, in order to raise children, and who generally is not eligible for E.I. maternity/paternity benefits.
These rules will greatly affect those small businesses that have relied on good years to put aside some funds to cover bad years. We don't know what the impact will be for clients who have sold their business and are left with the proceeds in their corporation to be used to fund their retirement. Will they now no longer be able to live out their retirement as planned or will the high proposed tax on passive investments gobble their retirement funds up? From information we have seen on the proposals, the tax on passive income in the corporation could be as high as 70%.
Perhaps instead of picking on small business owners and painting them as tax cheats, the government can look at the issue that top earners in Ontario are paying over 53% income tax on their marginal income. When you are giving more of your earnings to the government than what you are keeping, of course you will want to look for alternatives (including leaving the country).
Also many of the complicated tax "schemes" that the government is trying to subdue, are built around the fact that spouses can not share an income, due to spousal tax attribution rules. Why not look at allowing joint income tax filing for spouses (as is done in the US)? This would certainly make the playing field fair and simplify the tax system. It may have the effect as well as allowing one parent to possibly stay home to raise their children, instead of being penalized for staying home.
I wanted to take this opportunity to have my voice heard. I am sure you have heard from many other constituents and organizations in our community of North Simcoe, and hope you can take these concerns to the house of commons. We hope Mr. Morneau and Mr. Trudeau take the small business community's input seriously and re-think these ill conceived proposals.
Martin Kretzschmann CPA CA
Chartered Professional Accountants
373 Midland Ave, Midland ON L4R 3K8
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On February 20th 2017, the Canada Revenue Agency starts accepting 2016 tax personal returns on its e-file system. This marks the official start of the tax season!
Make sure to get your returns in early to avoid the late rush. Personal tax returns should be filed before May 1, 2017 to avoid interest and penalties.
Please see our tax return checklist below for assistance in getting your information together: