As of March 19th,2020: Well, we are in interesting times to say the least. In response to the extraordinary circumstances that we are all facing related to Covid-19, Prime Minister Trudeau has made it clear that 'nothing is off the table' as it relates to what the government's response will be and as many of you are aware they have already implemented a number of support measures to support Canadians.
Given the broad nature of this support I thought it would be valuable to summarize some of those benefits so that you and your family are aware and can take advantage. To summarize:
For individuals tax filing deadline has been postponed to June 1, 2020, instead of the traditional filing deadline would have been April 30, 2020. For self-employed individuals the deadline remains the same which is June 15,2020.
As an additional benefit, to anyone who owes tax money CRA (Canada Revenue Agency) will allow all taxpayers to defer until September 1, 2020, the payment of any income tax amounts that are owing. There will be no penalties assessed during this time.
The government will provide for eligible small employers a temporary wage subsidy for a period of three months. The subsidy equals 10 percent of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. If you have a small business which is eligible for the small business tax rate, or a non- profit then you may be eligible for this.
i) EI Sickness Benefits Effective March 15, 2020 the government is going to waive the mandatory one-week waiting period for employees to receive EI Additionally, an Emergency Care Benefit has been announced, providing up to $900 bi-weekly, for up to 15 weeks. You may qualify for this benefit if you are a: Worker, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits. Additionally, you may qualify if you are a: Worker, including the self-employed, who are taking care of a family member who is sick with COVID-19 but do not qualify for EI sickness benefits; and 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. Application for the Emergency Care Benefit will be available in April 2020.
ii) EI Worker Benefits The government is introducing an additional Support Benefit for Canadians who lose their jobs or face reduced hours and are not eligible for EI.; and Additional announce benefits include: Canada Child Benefit (CCB) The government is proposing to increase the maximum annual CCB payment amounts by $300 per child (only for the 2019-20 benefit year).
The government is reducing required minimum withdrawals from RRIFs by 25 percent for 2020, in recognition of volatile market conditions and the impact on many seniors' retirement savings. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.
In addition to government programs the big 6 Canadian banks have also announced relief programs of their own. BMO, Scotiabank, CIBC, National Bank of Canada, RBC and TD have all announced offers of financial assistance. The support will include up to a 6-month payment deferral for mortgages and the opportunity for relief on other credit products. Customers are being asked to reach out to their banks to see what assistance is there for them. National Bank noted its measures could also include extending the amortization period of a mortgage or offer special loans to cover living expenses. BMO's program could defer loan and credit card payments with the lender.
It goes without saying that these are challenging times for everyone and especially small business owners and employees of these companies, which make up a big portion of the Canadian economy. Of upmost importance is that we all do what is necessary to get through this event. The world will go on, we will get through this and I am confident that the lessons learned will make us better but there is no doubt that the next little while is going to be difficult for many.
I believe that there is an incredible investment opportunity presenting itself right now, but I also know that this is far from the most important priority to many people in our communities right now and we must take care of people first. Hopefully these programs will help to ease some of that pain and for any one out there who has questions please don't hesitate to reach out.
- Grant White, CIM, CFP
Grant White is a Portfolio Manager/Investment Advisor at Endeavour Wealth Management with Industrial Alliance Securities Inc, an award-winning office as recognized by the Carson Group. Together with his partners he provides comprehensive wealth management planning for business owners, professionals and individual families.
This information has been prepared by Grant White who is a Portfolio Manager for Industrial Alliance Securities Inc. (iA Securities) and does not necessarily reflect the opinion of iA Securities. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Portfolio Manager can open accounts only in the provinces in which they are registered.
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