Government helping you cope with the Economic Implications of COVID-19
This week, the federal and provincial governments announced a number of measures to assist Canadians during the current income insecurity and market weakness.
Three Federal Announcements:
- Worried about getting your tax return done? Concerned about your tax installments or payments due April 30th? Canadians will have one extra month to file taxes to the Canada Revenue Agency, so instead of an April 30 filing deadline, Canadians will have until June 1 to submit their income tax return to CRA. Individuals and businesses will also have more time to pay their taxes without paying any interest or penalties. The Canada Revenue Agency will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020.
- Worried about RIF Minimum requirements forcing you to sell a market-based investment when the market is down? Relief is on the way, in recognition of the impact of volatile market conditions on retirement savings. On March 18 Finance Minister Bill Morneau told reporters that the federal government would be reducing the minimum withdrawal rate for registered retirement income funds (RRIFs) by 25% for 2020. This will provide flexibility to seniors that are concerned that they may be required to liquidate their RRIF assets to meet minimum withdrawal requirements.
- Worried about your job, employment or business income? Other economic measures to help stabilize the economy include:
- Temporary Income Support through Employment Insurance benefits and Emergency Care Benefits
- Increased Good and Services Tax Credit and Canada Child Benefit
- Interest-free moratorium on repayment of Canada Student Loans
- Reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020
- Eligible small employers will be offered 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 reduce their remittances of income tax withheld on their employees’ remuneration.
- Businesses that need increased access to credit will be supported through the new Business Credit Availability Program (BCAP).
Three Ontario Provincial Announcements:
- Ontario Premier Doug Ford declared a state of emergency March 17th including the closure of most public establishments and gatherings of over 50 people. At the same time, Ontario committed over $300 million to respond to COVID-19 in the following ways:
- Increased hospital capacity
- Increased testing and screening
- Protect and support frontline workers
- Support long-term care homes, seniors in retirement homes, and residential facilities
- The Employment Standards Amendment Act (Infectious Disease Emergencies), 2020 provides job-protected leave for employees who are in isolation or quarantine due to COVID-19, or those who need to be away from work to care for children because of school or day care closures or to care for other relatives.
- Ontario is extending the validity period of driving products, services and health cards. These changes reduce the need for in-person visits to ServiceOntario, International Registration Plan offices and DriveTest centres during the COVID-19 outbreak
If any of these situations affect you, your income or your portfolios, please speak to your Financial Advisor. We are available by phone and e-mail.