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Canada Emergency Response Benefit

The Canadian government has proposed legislation to establish the Canada Emergency Response Benefit (CERB). This new measure is a taxable benefit that could provide $2,000 a month, up to four months, for workers who have lost income as a result of COVID-19. The CERB is intended to be a more efficient combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

The CERB will cover Canadians who have lost their job, are sick, quarantined, and/or taking care of someone who is sick with COVID-19. It will also apply to working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. The CERB will apply to wage earners, contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).

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Ontario Mini Budget

The Ontario government announced their 2020 budget on Wednesday. With the current economic and social climate induced by COVID-19, this version of the budget is more limited than traditional budget announcements.

The provincial government may announce a more robust outline of the province’s spending for the year at a later date but, for now, a limited plan has been put forward.

Here are the highlights for both businesses and personal spending:

Some Key Points For Businesses

Employer Health Tax
The government is proposing a temporary increase to the Employer Health Tax (EHT) exemption from $490,000 to $1 million for 2020. Eligible private-eligible private sector employers with annual payrolls up to $5 million would be exempt from EHT on the first $1 million of total Ontario remuneration in 2020. The maximum EHT relief from the exemption would increase by $9,945 to $19,500 for 2020 for eligible employers.  The exemption would return to its current level of $490,000 on January 1, 2021.

Regional Opportunities Investment Tax Credit
To support business investment in regions of the province where employment growth has been significantly below the provincial average, Ontario is proposing a new 10 per cent refundable Corporate Income Tax credit. The Regional Opportunities Investment Tax Credit would be available to eligible businesses that construct, renovate or acquire qualifying commercial and industrial buildings in designated regions of the province, saving them up to $45,000 in the year.

$1.9 Billion in Workplace Safety Expenses Working in conjunction with the government of Ontario, the Workplace Safety and Insurance Board (WSIB) will allow employers to defer payments for a period of six months.

This will provide employers with $1.9 billion in financial relief.  All employers covered by the WSIB’s workplace insurance are automatically eligible for the financial relief package.

Schedule 1 employers with premiums owed to the WSIB will be allowed to defer reporting and payments until August 31, 2020. The deferral will also apply to Schedule 2 businesses that pay WSIB for the cost related to their workplace injury and illness claims. In addition, no interest will be accrued on outstanding premium payments and no penalties will be charged during this six‐month deferral period.

Some Key Points For Individuals

Parents
To help parents pay for the extra costs associated with the closure of schools and daycares during  the COVID‐19 outbreak, the government is providing a one‐time payment of $200 per child up to  12 years of age, and $250 for those with special needs, including kids enrolled in private schools.

Seniors
The Province is proposing to double the Guaranteed Annual Income System (GAINS) maximum payment for low‐income seniors, for six months starting in April 2020. This would increase the maximum payment to $166 per month for individuals and $332 per month for couples.

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Segal Recognized By CLA

Segal LLP is pleased to announce that we served as advisors to the Enthusiast Gaming/Aquilini merger which has been nominated for the Capital Markets Deal of the Year Award by the Canadian Law Awards.

We also want to extend a congratulations and a job well done to our own team from Segal who provided audit and advisory services as part of this transaction. We pride ourselves on a diverse, experienced and hard-working team and we are thrilled to be recognized.

Financial Advisory From Segal

At Segal LLP, we recognize the trust you have placed in us as your financial advisors, and in these unsettling times, we are ready to assist. Here are a few ways we can help you deal with the current climate of uncertainty:

1) Assess your current financial position. You may want to consider having some financial modelling work done to project your cash flow and financial position. With a clear understanding, you can adjust your planning accordingly. Further, we can work with your financial institution in preparing a turn-around plan to assist with financing.

2) Assist with filing your corporate taxes as soon as possible, particularly where you expect a refund of corporate instalments. An assessed tax return may also be required by a lender as part of their decision-making.

3) Prepare your annual financial statements as quickly as possible. Regardless of whether your year-end statements are typically audited, reviewed, or compiled primarily for tax purposes, these may be a key tool in obtaining short or longer-term financing as they will be one of the documents initially requested by a lender, as well as providing the basis for your annual tax filing.

4) Work with you to file your personal tax return as quickly as possible, particularly if you are expecting a tax refund. The CRA is currently assessing basic income tax returns in less than 24 hours and paying refunds in as quickly as a week of filing in some cases. Notwithstanding the extended deadlines now allowed by the CRA, this could be particularly helpful if:

  • You need a refund/cash as soon as possible or just want to have a rainy-day fund during the next few unpredictable weeks.
  • You need a Notice of Assessment so you can negotiate a lower mortgage or other purposes.
For any assistance with your financial needs, please do not hesitate to reach out to us. With a diverse team of business advisors, we can help you effectively plan your future through these uncertain times.

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Update From the Canadian Government & CRA

The Canada Revenue Agency (CRA) has just announced it will be extending the personal tax deadline as a result of COVID-19. The new tax filing deadline for personal tax returns is now June 1, 2020. The new due date for taxes payable related to the 2019 T1 tax filing is now August 31, 2020.

While the extended deadline provides much-needed relief in these hectic times, it is important that we stay diligent in filing your personal income tax returns. Please note the following:

  • It is our intention to complete all tax returns by April 30, notwithstanding the extended deadline.
  • Personal tax organizers were distributed last week. If you did not receive one, you can access it here. The personal tax organizer provides us with the information that is critical to filing your tax return in an expeditious manner.
  • Segal has debuted its new online portal for collecting documents. If you have anything to send to your Segal advisor- your tax organizer, supporting tax documents, etc.- we ask that you please scan and upload them. The portal is fast, safe and secure, and a particularly important tool to have in reducing the spread of COVID-19. Those packages sent electronically will be processed quicker than those sent as paper packages.

Some other highlights from CRA’s announcement include:

  • For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020
  • 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 March 18, 2020 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
  • CRA will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.

For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.

In addition to CRA changes, the Canadian government announced its COVID-19 Economic Response Plan, which will provide up to $27 billion in direct support to Canadian workers and businesses. We have listed some of the highlights below.

  • Temporary Income Support for Workers and Parents
  • Waiving the one-week wait period for individuals in imposed quarantine to claim Employment Insurance (EI) sickness benefits
  • Waiving the requirement to provide a medical certificate to access EI sickness benefits
  • Introducing the Emergency Care Benefit of up to $900 bi-weekly, for up to 15 weeks. This benefit provides income support to:
    • Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits
      Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but who do not qualify for EI sickness benefits
    • Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not

Income Support for Individuals Who Need It Most

  • A one-time special payment by early May through the GSTC. The payment will double the maximum annual GSTC payment amounts for the 2019/2020 benefit year. The average boost will be close to $400 for single individuals and $600 for couples.
  • An increase in the maximum annual CCB payment amounts for the 2019/2020 benefit year by $300 per child. Affected families will receive the increase as part of their May payment.
  • Additional measures include the following:
  • Providing $305M for a new distinctions-based Indigenous Community Support Fund to address the immediate needs in First Nations, Inuit and Métis Nation communities
  • Six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans
  • Reducing the required minimum withdrawals from RRIFs by 25% for 2020 in recognition of volatile market conditions
  • Providing $157.5M to the Reaching Home Initiative to continue to support people experiencing homelessness during the COVID-19 outbreak
  • Supporting women and children fleeing violence, by providing up to $50M to shelters and assault centres to help with their capacity to manage or prevent an outbreak in their facilities.

Helping Business Keep their Workers

  • To support businesses facing revenue losses and to help prevent layoffs, the government is proposing to provide eligible small employers with a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% or remuneration paid during that period, up to a maximum of $1,375 per employee and $25,000 per employer. Businesses will immediately benefit from this support by reducing their remittances of income taxes withheld on their employee’s remuneration. Businesses eligible for the small business deduction, as well as non-profit organizations and charities will be eligible for this benefit.

Ensuring Businesses Have Access to Credit

  • The Business Credit Availability Program will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10B of additional support to small and medium-sized businesses. BDC and EDC are cooperating with private sector lenders on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation and tourism. Farm Credit Canada will also provide support to farmers and the agri-food sector.
  • The office of the Superintendent of Financial Institutions is lowering the Domestic Stability Buffer effective immediately. This will allow Canada’s large banks to inject $300B of additional lending into the economy.
  • The Bank of Canada cut interest rates by 0.75% as a proactive measure in light of the impact of COVID-19 on the Canadian economy.

We encourage you to read the full report here in case you and/or your business may benefit from this.

We appreciate your continued support. If you have any questions, please do not hesitate to reach out to us. questions, please do not hesitate to reach out to us.

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