As we are all adjusting to the new reality of COVID-19, the provincial and federal government has responded with financial relief programs to help alleviate the pressures on Toronto citizens and businesses. These measures are delivered as part of the federal government’s COVID-19 Economic Response Plan, which will provide Canadian workers and businesses with up to $27 billion in direct support, in addition to, $55 billion to meet liquidity needs of Canadian businesses and households through tax deferrals.
Some of the programs include:
The Ontario government has suspended time-of-use electricity rates for homeowners in Ontario. This is one more cost that homeowners will not have to worry about. Households will be charged at off-peak rates 24 hours/day at 10.1 cents/kWh regardless of peak periods. Comparing this to what homeowners usually must pay, which is a mid-peak rate of 14.4 cents/kWh or peak rates of 20.8 cents/kWh, this is a huge relief on homeowners. Homeowners don’t need to apply for anything, the discounts will automatically be applied to their hydro bills.
Homeowners now have an extended grace period to pay property taxes and city utility bills starting on March 16th. Automatic withdrawals for these payments have been suspended for the next two months. Contact your bank if you pay your property taxes through a financial institution. If you do not reside in Toronto, check your municipality’s official website to see what your city’s relief measures for property taxes and businesses.
Perhaps one of the greatest financial burdens of a homeowner is their mortgage. Canada’s big six banks have stepped up and are working with homeowners to defer mortgage payments for up to 6 months. Although interest will still accrue during the deferral period, it provides some relief to homeowners who may be financially strained due to COVID-19. Banks are particularly sympathetic to homeowners who have lost their jobs or are earning significantly less income due to COVID-19. Residents should speak to their respective banks regarding a deferral plan.
The federal government is providing a taxable benefit of $2,000 a month for up to 4 months for residents who had to stop working due to COVID-19, are sick, quarantined or taking care of someone who is sick, working parents who have to stay home to take care of their children, and workers who are not being paid. This benefit will also be available to contract and self-employed workers who don’t normally qualify for Employment Insurance benefits. Small business owners may also qualify. Residents can apply for the Emergency Response Benefit online or by phoning in starting early April.
Canada Student Loans Moratorium
As part of a massive $82-billion aid package, students will have a six-month interest-free moratorium on the repayment of Canada Student Loans effective March 30, 2020, for individuals who are in the process of repaying these loans. Interest will not accrue during this period.
Canada Child Benefit, HST, Income Tax Extension
An additional $300 per child will be delivered in May through the Canada Child Benefit only for the 2019-20 benefit year.
An extra one-time payment of $400-600 will be paid in May through the GST Credit program for low-income families.
Income Tax deadlines have been extended – residents have until June 1, 2020, to file and until August 31, 2020, to remit any taxes owing.
To help businesses prevent lay-offs, the government is proposing a temporary wage subsidy of three months. The federal government will subsidize 75% of the first $58,700, up to $847/week for small and medium-sized businesses impacted by COVID-19 who have experienced a drop of at least 30% in revenue effective March 15, 2020. The Wage Subsidy Program will be available for up to 3 months.
COVID-19 has especially impacted the viability of small businesses and so several loan programs have been announced, including:
The Business Credit Availability Program – a loan guarantee and co-lending program administered through financial institutions. Speak with your bank to see whether or not you qualify.
Read more: Business Credit Availability Program (BCAP)
Canada Emergency Business Account – businesses qualify if they can demonstrate that they paid between $50,000 – 1 million in total payroll in 2019. This program offers interest-free loans of up to $40,000 to help businesses cover operating costs. Repaying the loan by December 31, 2022, will lead to loan forgiveness of 25%.
Income Tax Deferrals
Businesses can defer income taxes owing on or after March 18 and before September 2020 until after August 31, 2020, without penalties or interest. This relief applies to tax balances due and installments.
Read more: Temporary Payment Deferrals for Income Tax
HST Remittances Extension
HST/GST remittances can now be delayed until June 30, 2020. This includes GSP/HST remittances for February, March and April 2020 for those who file HST monthly, January 1, 2020 – March 31, 2020, for quarterly filers, and amounts collected and owing for the previous fiscal year and installments of GST/HST for the filer’s current fiscal year for annual filers.
Read more: Deferral of GST/HST Tax Remittances (COVID-19 Measures)
Reducing Required Minimum Withdrawals from RRIFs
The government recognizes that certain groups may be more vulnerable to the impacts of COVID-19 and so has reduced the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.