Fed Budget 2021: Previously Announced Measures

Federal Budget 2021: Previously Announced Measures

Budget 2021 confirms the government’s intention to proceed with the following previously announced tax and related measures, as modified to take into account consultations and deliberations since their release:

  • Numerous proposals in respect of the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and the Lockdown Support.
  • Proposals in respect of temporary adjustments due to COVID-19 to the child care expense and disability supports deductions and the automobile standby charge.
  • Proposals released on December 16, 2020 extending timelines in respect of flow-through shares by 12 months.
  • Proposals released on December 15, 2020 relating to capital cost allowance claims for purchases of zero-emission automotive equipment and vehicles.
  • The anti-avoidance rules consultation and the income tax measures announced in the Fall Economic Statement in respect of registered disability savings plans, employee stock options and patronage dividends paid in shares.
  • Measures announced in the 2020 Fall Economic Statement regarding GST/HST relief on face masks and face shields.
  • Proposals announced on November 27, 2020 to facilitate the conversion of health and welfare trusts to employee life and health trusts.
  • Proposals announced on July 2, 2020 providing relief for deferred salary leave plans and registered pension plans during the COVID-19 pandemic.
  • Proposals released on April 17, 2020 to clarify support for Canadian journalism.
  • The income tax measure announced on December 20, 2019 to extend the maturation period of amateur athletes trusts maturing in 2019 by one year, from eight years to nine years.
  • The income tax measure announced on December 9, 2019 to increase the basic personal amount to $15,000 by 2023.
  • The income tax measure announced on August 29, 2019 to clarify the definition of a shared-custody parent.
  • Proposals released on July 30, 2019 to implement Budget 2019 income tax measures in respect of multi-unit residential properties, permitting additional types of annuities under registered plans, contributions to specified multi-employer pension plans for older members, pensionable service under an individual pension plan, the allocation to redeemers methodology for mutual funds, character conversion transactions, electronic delivery of requirements for information, the transfer pricing rules, the foreign affiliate dumping rules, and cross-border share lending arrangements.
  • Measures released on July 30, 2019 modifying previously enacted measures from the 2018 Fall Economic Statement and Budget 2019, in respect of the accelerated investment incentive, the expensing of the cost of machinery and equipment used in the manufacturing or processing of goods and the cost of specified clean energy equipment, and the expensing of the cost of certain zero-emission vehicles.
  • Proposals released on May 17, 2019 and on July 27, 2018 relating to GST/HST.
  • Measures announced in Budget 2018 to implement enhanced reporting requirements for certain trusts to provide additional information on an annual basis.
  • Measures confirmed in Budget 2016 relating to the GST/HST joint venture election.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

COVID-19 Federal Emergency Tax Changes-Summary To Date

There have been numerous Government announcements on tax measures to help individuals and assist businesses through the COVID-19 pandemic.  The following summarizes the current Federal tax measures as of March 27, 2020.  BC tax measures can be found here.

BUSINESSES

TEMPORARY WAGE SUBSIDY

See our previous post for details (now passed into law).

On March 27, 2020, the Government proposed to increase the wage subsidy from 10% to 75% of wages for eligible employers, with conditions, and effective retroactive to March 15.  Businesses are being instructed to reduce their source deductions remittances in order to claim the subsidy.  Re-hired employees will be eligible for the wage subsidy.  Details of any revised maximums per employee or employer are not yet clear; however, further details should be available soon.

CANADA EMERGENCY BUSINESS ACCOUNT (CEBA)

This measure permits banks to provide government-guaranteed interest-free loans of up to $40,000 to small businesses and not-for-profits to help cover operating costs during the period where revenues have been temporarily reduced. 

To qualify, organizations will need to demonstrate they paid between $20,000 and $1,500,000 in total payroll in 2019 (Box 14 of 2019 T4 Summary).    

25% of the loan will be forgiven where the loan is repaid by December 31, 2022. 

Applications for the loan should be available through the borrower’s financial institution.

GST/HST AND DUTY PAYMENT DEFERRAL (PROPOSED)

GST/HST and Import Duties payments can be deferred to June 2020.

OTHER BUSINESS MEASURES

PAYMENT DUE DATES AND CRA AUDITS

The deadline for businesses to pay any income tax amounts that are owing or due after March 18, 2020, and before September 1, 2020, has been extended to September 1, 2020.  No interest or penalties will accumulate on these amounts during this period.

Canada Revenue Agency will not be contacting any small or medium-sized businesses to initiate any post-assessment GST/HST or Income Tax Audits for the next four weeks. 

FEDERAL WORK-SHARING PROGRAM

This program has been streamlined as a result of COVID-19. Employers affected by a downturn in their business may want to consider whether they qualify for the Federal Work-Sharing Program (“WSP”).

The WSP program provides Employment Insurance (EI) benefits for eligible employees.  It is designed to help eligible employers avoid layoffs during temporary reductions in business activity, such as the COVID-19 pandemic.

For more information, please refer to the following website.

INDIVIDUALS

CANADA EMERGENCY RESPONSE BENEFIT

Combines the previously announced Emergency Care Benefit and the Emergency Support Benefit.

Applies to wage earners, contract workers and self-employed individuals who are not otherwise entitled to Employment Insurance (EI), and due to COVID-19 have lost their job (or losing income), are sick, quarantined, or taking care of someone who is sick with COVID-19.

The taxable benefit will be available to those who have total income of at least $5,000 in 2019 (or within 12 months of application) from employment, self-employment and/or certain EI benefits.  The individuals must have ceased working for reasons related to COVID-19 for at least 14 consecutive days within a 4 week period.

The amount of the benefit has not been specified and will be determined by the Government.  It was previously announced that that benefit will be up to $2,000 per month for up to four months (or $500 per week).

The online application portal will open in early April and funds are expected to be paid within 10 days of application.

OTHER PERSONAL TAX MEASURES

For individuals (other than trusts), the tax return filing due date is deferred until June 1, 2020.  The payment due date for 2019 taxes has been extended to September 1, 2020.  No interest or penalties will accumulate on these amounts during this period.

Reduced required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.

Increased GST credit for low-income individuals.

Increased maximum Canada Child Benefit payment.

TRUSTS

The due date for trusts with a year-end of December 31, 2019, will be deferred until May 1, 2020.  Payment of taxes for trusts can be deferred until September 1, 2020.  No interest or penalties will accumulate on these amounts during this period.

CHARITIES

The Charities Directorate has extended the filing deadline for all charities with a Registered Charity Information Return due between March 18, 2020, and December 31, 2020, to December 31, 2020.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.