COVID-19: Economic Relief Measures Announced to Date

Across Canada, governments are announcing measures to address the economic impact of COVID-19. We will track them here. 

We will update this page on a regular basis. The information below is current as of August 28, 2020.

For the latest information, please visit our COVID-19 hub[1] including our Tax summary – Relief Measures under Canada’s COVID-19 Economic Response Plan[2] and our Municipal Tax Measures Summary[3] in the McCarthy Tétrault Covid-19 Hub.

To discuss how you or your organization might benefit from one of these programs, or if you have questions about the impact of COVID-19 on your business, please contact your McCarthy Tétrault trusted advisor or one of the authors.

Use the links below to navigate the document:

Table of contents:

Canada

The federal government has announced the following economic relief measures and passed, on March 25, 2020, Bill C-13, An Act respecting certain measures in response to COVID-19 to implement the Economic Response Plan measures. For more information on Canada’s COVID-19 Economic Response Plan, announced on March 18, 2020, please visit the Department of Finance Canada’s website, here[4].

General relief measures

International income tax

  • On May 20, 2020, the Canada Revenue Agency issued guidance[5] on international income tax issues (e.g. income tax residency, carrying on business in Canada / permanent establishment, cross-border employment income, etc.) raised by the COVID-19 crisis.
  • Several countries and certain companies have implemented travel restrictions in response to COVID-19, to protect their citizens and employees. These restrictions can lead to potential tax issues in Canada. The CRA has therefore issued guidance which will apply from March 16, 2020, to June 29, 2020, at which time the CRA may extend the measures if necessary or cancel them if they are no longer needed. For example:
  • Tax Residence : In general, an individual’s residence for Canadian tax purposes is a question of fact decided according to common law criteria, which are based on the individual’s ties to Canada. In addition, an individual who is physically present in Canada for a period or periods totaling 183 days or more in a taxation year is deemed to be resident in Canada all year round. If an individual stayed in Canada only because of travel restrictions, the CRA will not take into account those forced presence days for the purposes of the 183-day limit. The CRA will take this position when an individual is a resident of another country, intends to return there, and returns there as soon as possible. Also, if an individual remains in Canada solely because of travel restrictions, the CRA will not consider this element alone to be sufficient to meet the requirements of the common law residency test.

Under the Canadian tax system, companies that were incorporated under foreign laws can be considered resident in Canada if their “central management and control” is located in Canada. Certain tax treaties decide the issue of dual residence, taking particular account of the place where the company’s affairs are actually managed. If directors of companies subject to such tax treaties are present in Canada due to travel restrictions and must attend board meetings in Canada because of these restrictions, the CRA will not consider this reason alone to be sufficient for the corporation to be considered resident in Canada. The location of the meetings of the board of directors is not the only criterion to be considered in determining the location of the central management and control; it is only one element. The CRA may conclude that a company is resident in Canada when the actual management and control takes place in Canada, even if the meetings of the board of directors have taken place elsewhere.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113

Share