March 18, 2020
by Israel Foulon Wong LLP

Summary

Since our March 17, 2020 E-Bulletin, the federal government has announced an $82 billion aid package (3% of Canada’s GDP) with regard to the COVID-19 pandemic, with $27 billion in direct support to Canadians plus $55 billion in tax deferrals (a few key details are listed below):

• The federal government has announced the introduction of the Emergency Care Benefit, which will give up to 15 weeks of support, of up to $900 bi-weekly, to those who fall ill, are in quarantine, need to be self-isolate, need to care for a family member with COVID-19, or who must stay home without pay because of children who need additional care due to school closures, but do not otherwise qualify for EI.
• For the next 90 days, the federal government will provide small businesses with support of up to 10% of employees’ salary, up to a maximum of $1,375 per employee and $25,000 per employer, to encourage employers to keep staff on payroll.
• Canadians will have until June 1, 2020 to file their taxes and until August 31, 2020 to pay any income tax owing.
• The federal government will temporarily boost the Canada Child Benefit.
• In May 2020, the federal government will supplement the GST credit so that every adult who qualifies will receive $300, with $150 for each child.
• A six month interest-free moratorium will be introduced on student loans.
• The Canadian and American governments have mutually agreed to temporarily close the Canadian/American border to non-essential traffic (trade/commerce will be unaffected). Canadians will also still be permitted to return home.
• Canada’s big six banks will allow customers to defer mortgage payments for up to six months, among other changes. Individual and business customers who are facing hardship are being encouraged to contact their bank directly to discuss options that may be available.
• Allow all businesses 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. 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. This measure will result in businesses having more money available during this period.
• Increase the credit available to small, medium, and large Canadian businesses. As announced on March 13, a new Business Credit Availability Program will provide more than $10 billion of additional support to businesses experiencing cash flow challenges through the Business Development Bank of Canada and Export Development Canada.
• In order to move forward with implementing these new measures, the Government intends to introduce special legislation and seek the approval of Parliament.

Given the exceptional and unprecedented situation, we expect further developments in the coming hours and days.

Frequently Asked Questions

*The following is for general informational purposes only. We strongly encourage you to seek legal advice pertaining to your specific matter prior to taking any action.*

Q: If employees are placed on layoff and begin to collect EI, can employers recall certain employees for minimal hours while not jeopardizing employees’ receipt of EI benefits?

A: Yes (although we again encourage employers not to give definitive answers with regard to EI benefits and eligibility). According to Service Canada’s website, employees can keep 50 cents of their benefits for every dollar they earn, up to 90 percent of their previous weekly earnings (roughly four and a half days of work). Above this cap, employees’ EI benefits are deducted dollar-for-dollar. Employees are not eligible to receive EI benefits if they work a full week, regardless of the amount earned. However, this will not reduce the total number of weeks payable on employees’ claim. For more information, please refer to the following website: https://www.canada.ca/en/employment-social-development/programs/ei/ei- list/working-while-claim.html