The Federal economic response to COVID-19
On March 18, 2020, the Government of Canada announced a significant economic response plan to mitigate the economic impact of COVID-19 on Canadians and businesses. While this $82 billion plan contains many important measures, in this article we will highlight some of the relief this response plan provides to taxpayers. In particular, certain tax filing deadlines and tax payment deadlines have been deferred and certain audit activities by the Canada Revenue Agency (“CRA”) have been suspended.
With respect to tax filing deadlines, filing due dates for 2019 income tax returns for individuals and certain trusts have been deferred as follows:
- For individuals, the return filing due date will be deferred until June 1, 2020.
- For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.
With respect to tax payment deadlines, the CRA will allow all taxpayers (including businesses) to defer payment of certain income tax amounts (i.e. tax balances due and instalments owing under Part I of the Income Tax Act) that become owing on or after March 18, 2020 and before September 2020. It is unclear when payment on these amounts will be required, as the Government merely indicated that it will be “after August 31, 2020”. As a further measure of relief, the Government has indicated that interest and penalties will not accumulate on these amounts during this “period”. It is unclear whether this “period” will encompass the time from March 18, 2020 until August 31, 2020 or from March 18, 2020 until the ultimate due date(s) after August 31, 2020. We emphasize that this deferral only applies to payments of Part I taxes and the interest and penalties on such amounts. For example, payroll remittances and non-resident withholdings do not benefit from this relief.
With respect to audit activities, the CRA will not contact “small or medium businesses” to initiate certain GST/HST or income tax audits for the next four weeks. Further, the CRA will temporarily suspend audit interaction with taxpayers and representatives for the “vast majority of businesses”. While it is unclear what constitutes a “small or medium business” or the “vast majority of businesses”, it is clear that the CRA will be curtailing its audit activities.
This response plan also provides that the CRA will temporarily recognize electronic signatures on certain documents authorizing tax preparers to file returns on behalf of taxpayers. This is a sensible administrative concession that will help limit in-person meetings between taxpayers and their tax preparers. It is unclear how long this administrative concession will be in place.
Despite some uncertainty, these relief measures are welcome. We will provide further updates as more details on these and other tax-related measures become available.
This article is provided for general information only. If you have any questions about the above, please contact a member of our Tax Group.
Click here to subscribe to Stewart McKelvey Thought Leadership.
Archive
Perlene Morrison Prince Edward Island’s municipal legislation is being modernized with the implementation of the Municipal Government Act (the “MGA”). The legislation has now received royal assent and will be proclaimed in force at a future date.…
Read MoreJonathan Coady and Chera-Lee Gomez It’s that time of year – the moment when we look back at the year that was and chart our course for the year ahead. For many councillors, administrators and planning professionals…
Read MorePeter McLellan, QC and Michelle Black In a recent decision, R v McCarthy’s Roofing Limited, Judge Anne Derrick provided some much-needed clarity around what it means to be a “constructor” on a job site. This is critical as…
Read MoreRick Dunlop On December 13, 2016, the Government of Canada released A Framework for the Legalization and Regulation of Cannabis in Canada: The Final Report of the Task Force on Cannabis Legalization and Regulation (“Report”). The Report’s…
Read MoreBrian Johnston, QC Canadian employers are already coping with approximately 75,000 Canadians authorized to use medical marijuana. Health Canada expects that this number will increase to about 450,000 by 2024. Employers know that medical marijuana…
Read MoreJonathan Coady With its decision in Canada Post Corporation v. City of Hamilton,1 the Ontario Court of Appeal has confirmed that the placement of community mailboxes by Canada Post is a matter beyond the reach of municipalities…
Read MoreJennifer Taylor Introduction Thanks to some dirty windows, insurance lawyers have a new go-to Supreme Court case on issues of policy interpretation: Ledcor Construction Ltd v Northbridge Indemnity Insurance Co, 2016 SCC 37. The insurers in Ledcor Construction had…
Read MoreJennifer Taylor Introduction Appeal courts in Ontario1 and Nova Scotia2 have now issued decisions about Trinity Western University’s proposed law school (“TWU”) in British Columbia, and at first glance they couldn’t be more different. The Court of Appeal for…
Read MoreJoe Thorne1 and Giles Ayers2 Limitation periods serve a critical function in the civil justice system. They promote the timely resolution of litigation on the basis of reliable evidence, and permit litigants to assess their legal exposure…
Read MoreOn July 14, 2016 the Supreme Court of Canada issued a significant decision affecting federally regulated employers across Canada. In Wilson v. Atomic Energy of Canada Limited the Court held that the purpose of the unjust dismissal…
Read More