The Government of Canada took a big step forward on March 18, 2020, to combat the economic impact of the COVID-19 pandemic.
The $107 billion Economic Response Plan provides direct and indirect aid to Canadian households and businesses to keep the economy afloat.
Read on to see how you can benefit from the economic support that will become available in the coming days.
You can also check out our recent blog on how to manage your finances during a stock market crash.
The Emergency Care Benefit and Emergency Support Benefit have been combined into the Canada Emergency Response Benefit and will now provide a taxable benefit of $2,000 per month for up to 4 months. This benefit was made available starting in April.
Canada Emergency Response Benefit
Workers without paid leave who have to stay home due to sickness, quarantine, or to take care of kids will receive up to
$900 bi-weekly for up to 15 weeks (now up to $2,000 for 4 months).
This payment is similar to what would otherwise be available via the Employment Insurance (EI) benefit. The medical certificate requirement (i.e. doctor’s note) required to qualify for EI benefits and the one-week waiting period is being waived.
Application for the Emergency Care Benefit starts in April if you meet the eligibility requirements. You can apply through your CRA MyAccount, My Service Canada Account, or by calling a toll-free number (1-800-959-2019 or 1-800-959-2041).
The Emergency Care Benefit is expected to cost up to $10 billion.
Freelancers, gig workers, and other workers who are not eligible for EI and are facing unemployment also get a reprieve via the Emergency Support Benefit.
Up to $5 billion will go towards providing support to these folks.
Canada Emergency Student Benefit
This newly introduced benefit will cater to post-secondary students and recent graduates who do not qualify for the CERB.
Eligible students will receive $1,250 every month for up to 4 months (May to August). Those with dependents (e.g. kids) or disability will receive $2,000 every month.
While on CESB, students can still work and earn up to $1,000.
Learn more about how to apply for the CESB here.
Increase in GST Credit Payment
Canadian households that qualify for the Goods and Services Tax Credit (GSTC) will receive a special bonus payment in May 2020.
This will result in low- and modest-income families getting double the amount of GST credit they would normally receive. Individuals can expect to get up to an extra $400 and for couples, the increase will be close to $600.
The GST credit increase will cost up to $5.5 billion. You can check the GST payment dates here.
Canada Child Benefits
Canada Child Benefits (CCB) payments will increase by up to $300 per child in 2020. Families can expect an extra $550 on average and payments will occur in May.
The CCB enhancements will cost an estimated $2 billion. Here are your regular CCB Payment Dates and Amounts.
Tax Return Filing Deadline Extended
The tax return filing deadline date has been pushed from April 30 to June 1. In addition, individual taxpayers can delay their income tax payments until after August 31, 2020, without interest or penalty.
Businesses can also defer their income tax payments until after August 31, 2020.
Trusts with a December 31 year-end can delay tax filing until May 1st.
If you have Federal Student Loans, you can rest easy for the next 6 months.
Until September 30, 2020, the government has paused the repayment of student loans and no interest will accrue from March 30 to September 30, 2020.
Minimum required RRIF Withdrawals have been temporarily reduced by 25%.
This is to protect seniors so they have more flexibility with their retirement income withdrawals while portfolio values are depressed.
Read more about how to withdraw retirement income from your RRSP.
Other support measures available to Canadians:
- Providing $305 million to address needs in First Nations, Inuit, and Metis Nation communities.
- Supporting those experiencing homelessness with $157.5 million through the Reaching Home Initiative.
- Providing up to $50 million to support women and children fleeing violence.
- Banks, CMHC, and mortgage insurers will work with their customers to provide relief e.g. by deferring mortgage payments for 6 months.
Support to Businesses
Canadian businesses are also facing hardship and are not left out of the federal government’s economic response plan.
Some of the measures targeting businesses include:
- Deferring income tax payments until after August 31, 2020.
- Providing a 10% wage subsidy for small businesses for 3 months up to a maximum subsidy of $1,375 per employee.
- Providing access to credit via the Business Credit Availability Program.
- Provide funding to banks and mortgage lenders.
- Increased credit availability to farmers through Farm Credit Canada
How To Apply For The Economic Benefits Package
Existing benefits like the CCB and GST credit will be paid out automatically based on your current setup. CCB and GST credit top-ups are expected in May 2020.
For the Canada Emergency Response Benefit, you can apply through your CRA MyAccount or My Service Canada Account.
There is also an option to call a toll-free number (1-800-959-2019 or 1-800-959-2041).
For basic EI sickness benefits, you can apply through the regular routes. The phone number for EI inquiries is 1-800-206-7218 and it is available Monday to Friday from 8:30 am to 4:30 pm local time.