COVID-19 | Governmental Measures

Last update: September 14, 2020, 3:58 p.m.

View Summary tables for Canada and Quebec – Announced Changes Personal, Trusts, Partnerships and Corporations Tax Returns, Production, Balance Due and Instalments, and Federal and Provincial Sales Taxes Announced Changes for Payments and Returns.

1. Federal and Quebec corporate income tax payments falling due from today until August 31, 2020: can be deferred until September 30, 2020 without interest nor penalties. This applies for income taxes balances owing and for installments.
2. Federal and Quebec corporate income tax returns that are due after March 18, 2020 and before June 1, 2020: can be delayed until June 1, 2020.
3. Federal and Quebec corporate tax returns due in June, July and August: can be delayed until September 1, 2020 (this applies for December to February 2020 year-ends). This was announced on May 24, 2020.
4. GST/HST/QST returns and payments for the period of March, April and May: can be delayed until June 30, 2020 as announced by Revenue Quebec in Information Bulletin 2020-5, although the Federal announcement delayed payments but was silent on the filing of federal sales tax returns.
5. Payments for Custom duty and Sales tax for importers for the statement of accounts of March, April and May:  extended to June 30, 2020.
6. Payroll deduction at source remittances: not delayed.
7. Non-resident tax withholding remittance:  not delayed.
8. Production of the NR4 forms for 2019:  extended until May 1, 2020.
9. Federal and Quebec Income Tax Returns for Partnerships:  extended until May 1, 2020.
10. Introduction of the Canada Emergency Wage Subsidy (CEWS) of up to 75% for qualifying businesses for up to 6 months retroactive to March 15, 2020 and ending November 21, 2020.
    • Businesses, large or small, are eligible if revenues have fallen by 30% (15% for the month of March) or more due to the COVID-19 situation for the months of March to June. Thereafter, for the months of July to November, any decrease in the revenues would qualify a business.
    • Not for profits and Registered Charities are also eligible.
    • For the months of March to June, the subsidy covers the first 75% of salaries up to a maximum annual salary of $58,700 (the maximum subsidy is $847 per employee per week for those earning $1,129 per week or higher). Thereafter, for the months of July to November, the base subsidy rate is a direct function of the decline in revenues – the more significant the decline in revenues, the higher the subsidy rate and vice versa. The base subsidy rate is slowly reducing (from 60% in July to 20% in November on a maximum gross salary of $1,129) as the program is approaching its end in November 2020.
    • For the months of July to November, there is an additional top-up subsidy for businesses suffering a more significant loss of revenues (50% average for the previous 3 months). The top-up subsidy may represent up to 25%.
    • Businesses can apply for the subsidy through the CRA My Business Account site.
    • The revenue test compares the monthly revenue results for March, April and May 2020 to either the same period in 2019 or to the average revenues in January and February 2020.
    • For the months of July to November, a business may elect to change the reference period for the purpose of calculating its revenue decline.
    • Enterprises can also use cash or accrual accounting to determine their revenues. However, for the months of July to November, a business cannot change the accounting approach for the purpose of calculating its revenue decline and must pursue using the same methodology than for the months of March to June 2020.
    • Not-for-profits and charities can choose to include or exclude government funding to determine their revenue reduction.
    • For the months of March to June 2020, qualifying for the subsidy in one period automatically qualifies the entity for the next period.
    • Employers may also claim contributions paid on eligible remuneration paid to furloughed employees.
    • The 75% wage subsidy overlaps with the 10% temporary wage subsidy.
    • The 4^th claiming period will follow the same rules as the first 3 claiming periods.
    • Federal Government is still assessing its options to soften the requirements for the 5^th (July 5 to August 1) and 6^th (August 2 to August 29) claiming periods. Details to be provided shortly.
11. Employers registered with a CRA payroll account on March 18, 2020, who do not qualify for the 75% wage subsidy, may qualify for the 10% temporary wage subsidy.
    • It is available to Canadian controlled private corporations with less than $15 million in taxable capital in their preceding year end, individuals, not-for-profits, registered charities and qualifying partnerships.
    • The subsidy is 10% of the wages and salaries paid between March 18 and June 19, 2020 but is limited to $1,375 per employee and $25,000 per employer.
    • The subsidy can be claimed by reducing the remittances for Federal (not Quebec) income taxes deducted at source.
12. Employment Insurance (EI) Work Sharing Program: enhanced by extending eligibility to 76 weeks, easing requirements and streamlining the application process. Provides EI benefits to workers who reduce their normal working hours due to conditions beyond control of the employer.
    See RELATED: COVID-19 EMPLOYERS FAQ below.
13. Income and sales tax audits on SMEs: postponed for 4 weeks.
14. Introduction of the Large Employer Emergency Financing Facility program (LEEFF): For large corporations with annual revenues over $300M. Government to provide bridge financing, minimum of $60M, in cooperation with the applicant’s financial institution.
15. Introduction of the Canada Emergency Commercial Rental Assistance program (CECRA): allowing a tenant to only pay 25% of their gross rent for the months of April, May, June, July, August and September 2020.
    • Tenants must have experienced a reduction of their revenues of at least 70% vs. either the comparable month in 2019 or the average for January and February 2020.
    • Tenants must have a maximum monthly gross rent of 50,000 $ and annual revenues under 20,000,000 $ to be eligible.
    • The program is administered undifferentiated for properties with mortgages, other forms of debt or no mortgages at all.
    • Property owners and tenants must enter into an agreement to reduce rent of the tenants by at least 75% for the months of April, May and June 2020. Landlords cannot evict a tenant for the duration of the agreement.
    • Tenant pays 25% of the gross monthly rent.
    • Government pays 50% of the gross monthly rent (forgivable loans if landlord complies with the program’s terms and conditions).
    • Landlords have to absorb the remaining 25% of the gross monthly rent.
    • Landlords are not compelled to opt in the program.
    • The deadline to apply is September 30, 2020.
    • The Quebec Government announced it will provide further support to landlords by compensating 50% of the gross monthly rent they have to absorb, reducing landlord’s loss to 12.5% of gross monthly rent. The details of Quebec Government’s measure have yet to be disclosed.
    • The Federal government extended the program by one month (August 2020). More details to be announced shortly.

1. The new Canada Emergency Business Account will provide interest free loans of up to $40,000 to small businesses and not-for-profits to help cover their operating costs. Eligible organizations are those who paid between $20,000 and $1.5M in total payroll in 2019 OR between $0 and $20,000 (in cases where employees are paid through dividends) as long as the applicant demonstrates having non-deferrable expenses between $40,000 and $1,500,000 in 2020. 25% of the loan to a maximum of $10,000 would be forgiven if the loan is repaid by December 31, 2022.  The loan will be provided by financial institutions and is currently available.
2. The new Co-Lending Program will allow banks and the Business Development Bank of Canada to co-loan term loans to SMEs of up to $60M for their operational cash flow requirements. Businesses should contact their financial institutions for more information.
3. Export Development Canada can provide loan guarantees to eligible businesses of up to $80M to ensure companies have access to cash.  Businesses should contact their financial institution for more information.
4. Business Credit Availability Program: the Business Development Bank of Canada and Export Development Canada will provide more than $10 billion in support and work with private sector lenders to coordinate credit solutions for businesses.
5. Businesses in Quebec, with some exceptions, also have access to the ESSOR loan program sponsored by Investissement Quebec for amounts in excess of $50,000 for businesses that are having temporary cash-flow issues due to the COVID-19.

For businesses whose liquidities are affected by the repercussions of COVID-19

This new emergency funding measure provides ad hoc and exceptional support for businesses affected by the repercussions of COVID-19.

Eligible Businesses

This financial assistance is available to businesses operating in Québec, including cooperatives and other social economy enterprises with commercial activities. Eligible businesses are those that find themselves in a precarious situation and temporary difficulty as a result of COVID-19. They must show that their financial structure offers realistic prospects for profitability.

Eligible Projects

Businesses must show that their cash flow issues are temporary and that the liquidity shortage stems from:

• A problem involving the supply of raw materials or products (goods or services)
• An inability, or a substantially decreased ability, to deliver goods, products or services

Applications will be reviewed on a case-by-case basis, according to the business’s circumstances and Investissement Québec’s management practices.

Eligible Industries

All industries are eligible, except for the following:

• Weapons manufacturing or distribution
• Games of chance and gambling, combat sports, racing and other similar activities
• Production and sale of tobacco and drugs along with services related to their use, except for projects involving pharmaceutical-grade products approved by
• Health Canada and having a DIN, or their ingredients, as well as R&D projects licensed by Health Canada
• Any activity whose main purpose is protected by the Canadian Charter of Rights and Freedoms (religion, politics, human rights advocacy, etc.)
• Any other activity that may offend public morals.

Details of Financial Assistance

• A loan guarantee is the preferred form of financing. Financing can also take the form of a loan from Investissement Québec.
• Investissement Québec aims to work in close cooperation with financial institutions and federal authorities in order to share risks
• The minimum funding amount is $50,000.
• Refinancing is prohibited.
• This measure is designed to shore up the business’s working capital.

Special conditions may apply.

1. Form T3010 “Registered Charity Information return” due between March 18, 2020 and December 31, 2020:  filing deadline extended to December 31, 2020.
2. Form TP-985.22V “Quebec Information Return for Registered Charities and Other Donees” due between March 1, 2020 and December 31, 2020: filing deadline extended to December 31, 2020.
3. The new Canada Emergency Business Account will provide interest free loans of up to $40,000 to not-for-profits to help cover their operating costs. Eligible organizations are those who paid between $20,000 and $1.5M in total payroll in 2019.  25% of the loan to a maximum of $10,000 would be forgiven if the loan is repaid by December 31, 2022.  The loan will be provided by financial institutions with the cooperation of Export Development Canada.  More details to come at a later date from the government.
4. The new 75% wage subsidy is available for Not-for-Profit and Registered Charities. See point 9 in Support for Businesses section above.
5. Not-for-profits and Registered Charities can also claim the 10% temporary wage subsidy if they do not qualify for the 75% subsidy. See point 10 in Support for Businesses section above.

1. Taxpayers to receive up to $1,200, with joint filers eligible to receive as much as $2,400 with an additional $500 for every child. Payments will be gradually phased out for individuals who make more than $75,000 and joint filers that make more than $150,000. Payments are completely phased out for individuals who make more than $99,000 and joint filers that earn more than $198,000.
2. $300 Billion for loan guarantees for small businesses
3. $150 Billion for large businesses excluding airlines
4. $50 Billion in loan guarantees for passenger air carriers, and
5. $8 Billion for cargo air carriers
6. Individuals can defer filing their 2019 personal tax returns until July 15^th,2020.
7. Individuals and corporations may defer making estimated tax payments until October15th,2020.
8. Penalties on early withdrawals up to $100,000 from qualified retirement plans for coronavirus related distributions will be waived.
9. Increased incentives for making charitable contributions in 2020.
10. Employers may defer payroll tax payments until 2021 and 2022.
11. Businesses will be permitted to carry back losses to offset against five years of prior taxable income.
12. Limitations on interest deductions will be relaxed.