COVID-19: Economic Relief Measures Announced to Date

  • As announced on March 18, 2020, the federal government’s COVID-19 Response Plan contains measures that will allow businesses to defer the payment of any income tax that becomes owing between March 18, 2020, and August 31, 2020, until September 1, 2020. Interest and penalties will not apply or be computed to these unpaid tax balances during this period.
  • This measure will apply to both monthly instalments and year-end tax balances due under Part I of the Income Tax Act (Canada).
  • The deadlines to file certain categories of tax and information returns have been extended:
    • trusts having a taxation year ending on December 31, 2019, may defer filing T3 returns until May 1, 2020;
    • partnerships and their members may defer filing T5013 returns until May 1, 2020;
    • the deadline to file NR4 information returns has been extended to May 1, 2020; and
    • the filing of information returns under Part XVIII and Part XIX of the Income Tax Act may be deferred until September 1, 2020. No interest or penalty will be assessed during this period and no penalty will apply for failure to obtain a self-certification on financial accounts opened before January 1, 2021.
  • Administrative tax actions required of taxpayers by the CRA due after March 18, 2020, can be deferred until June 1, 2020. Such actions include the filing of returns, elections, designations, and information requests.
  • The CRA has also issued the following relief measures:
    • Audits: the CRA will temporarily suspend audit interactions with taxpayers and their representatives. The CRA will also refrain from initiating any post-assessment GST/HST or income tax audits with small or medium-sized businesses for the next four weeks. However, as indicated by CRA, interaction with taxpayers will only be limited to the cases where the legal deadline to reassess a tax return is approaching, and in cases of high risk GST/HST refund claims that require some contact before they can be paid out. While the Government of Canada[49] defines a “small business” as businesses having less than 100 employees and a “medium-sized business” as having between 100-499 employees, the CRA has not yet provided further guidance on the definition of “small or medium sized businesses” in the context of this specific announcement.
    • Collections: No collection activities will be initiated on new debts until further notice, and the CRA undertakes to make flexible payment arrangements available.
    • Objections: Objections related to Canadians’ entitlement to benefits and credits have been identified as a critical service which will continue to be delivered during COVID-19 times of hardship and therefore, there should be no delays associated with the processing of these objections. The deadline to make any objection request has been extended to June 30, 2020.
    • Appeals: All TCC sittings scheduled between March 30, 2020, and July 3, 2020, are cancelled. The Court will reassess[50] on or before May 27, 2020. The Registry will contact affected parties directly. The Registry offices of the TCC are closed for all other business until further notice. Also, the period beginning March 16, 2020 and ending on the day that is 60 days after the Court and its offices reopen will be excluded from the computation of time under the TCC’s rules and from any Order or Direction of the Court. For more information, see the TCC’s Notice to the Public and the Profession[51], dated April 17, 2020.
    • Appeals of CPP/EI: Appeals in respect of decisions made by the CRA on pensionability issues under the Canada Pension Plan (CPP), and insurability issues under the Employment Insurance Act (EI Act), will only be progressed where such appeals related to cases where EI benefits are pending. These cases will be considered on a priority basis. Other appeals will be continued when normal service resumes but neither the CRA nor the Minister of National Revenue have indicated when this is expected to occur. The court will treat all notices of appeal filed during the court’s closure, and for 60 days thereafter, as including a request to extend the filing deadline due to an inability to file based on exceptional grounds due to the pandemic and the closure of the Court Registry.
    • Requirement to pay (RTP): Banks and employers do not need to comply or remit on existing RTPs.
    • Requests for information (“RFI”): Taxpayers who have received a request for information may wait until further notice before providing this information.
    • Transfer pricing documentation: Requests for contemporaneous documents issued before April 1, 2020, with a deadline of March 18, 2020, or later, are deemed to be cancelled. These requests will be re-issued at a later date and the requested documents must be submitted within three months of the re-issued request.
    • Scientific research and experimental development (“SR&ED”): New reviews or audits are not being undertaken at this time. Ongoing exams and audits will be finalized as soon as possible to help businesses get their credits faster. Applications approved during the current period may be subject to review or audit at a later date to confirm eligibility.
    • Film and media tax credits: The Canadian film or video production tax credit program will not undertake any new audits. Ongoing audits will be completed as soon as possible to help businesses receive their credits faster. Applications approved during the current period may be subject to review or audit later. Additional information can be found here[52].
    • Delays: Once the crisis has subsided, there will be a significant backlog for the CRA to deal with, and considerable delays for the foreseeable future.
  • For more information, see the Department of Finance Canada’s press release of March 18, 2020. [53]

Office of the Superintendent of Financial Institutions (OSFI)

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