With the Canada-U.S. border closed to nonessential travel because of the coronavirus, the Canadian government has announced an C $82 billion economic support package that includes tens of billions of dollars in temporary tax relief.
“Today we’ve announced C $27 billion dollars in direct support to Canadian workers and businesses, plus C $55 billion to meet [the] liquidity needs of Canadian businesses and households to help stabilize the economy through tax deferrals,” Prime Minister Justin Trudeau said during a March 18 address.
To support workers, the government will provide low-income families with “a special top-up payment under the goods and services tax (GST) credit,” which will infuse the economy with C $5.5 billion, according to a March 18 release. The average individual beneficiary will receive C $400 and the average couple will receive C $600, according to the Canada Revenue Agency.
Finance Minister Bill Morneau held a press conference following Trudeau’s remarks and reiterated that the first phase of Canada’s COVID-19 economic response plan includes a deferral of “C $55 billion in tax revenue, leaving that money in the economy.” Together with the C $27 billion of support to individuals and business, “that’s 3 percent of GDP that would not be in the economy without these actions,” Morneau said.
“Canadians who owe personal income taxes and Canadian businesses who owe corporate income tax now only need to pay it before September 1,” thus freeing up the C $55 billion in temporary tax relief, Morneau said. “Given the extraordinary times, we’ve extended the tax filing deadline until June 1,” he added. The deadline is typically April 30. The deadline to pay tax balances for 2019 with no interest or penalties is now August 31, according to the CRA.
Other relief measures introduced March 18 include wage subsidies for small businesses, an emergency support benefit from the CRA of up to C $5 billion to support those who might be unemployed and ineligible for employment insurance, and emergency care biweekly payments of C $900 “for up to 15 weeks to provide income support to workers who must stay home and do not have access to paid sick leave,” according to the release.
On March 17 the government of Québec announced an extension of its tax return filing deadline to June 1. “For those who receive amounts from social programs such as the solidarity tax credit and the family allowance, Revenue Québec will ensure that the payments are made as planned on July 1,” despite the filing deadline delay, it said.