COVID-19 Economic Response Plan
Support for Canada and Saskatchewan
March 20, 2020
With the COVID-19 pandemic spreading throughout the province and the country our clients are facing unique and difficult circumstances in their businesses. The following information may be of assistance, however, it should only be acted upon in conjunction with professional advice.
Saskatchewan COVID-19 Economic Response Plan
- Self-Isolation Support Program – will provide $450 per week, for a maximum of two weeks or $900. The Self-Isolation Support Program is targeted at Saskatchewan residents forced to self-isolate that are not covered by recent federally announced employment insurance programs and other supports. The program is designed to ensure that all Saskatchewan residents are covered by either a federal or provincial program to ensure no one is faced with choosing to work instead of protecting their family and community from COVID-19 by self-isolating. The program will mostly benefit self-employed residents of Saskatchewan.
- Three Month PST Remittance Deferral – effective immediately, Saskatchewan businesses who are unable to remit their PST due to cash flow concerns will have relief from penalty and interest charges over the course of three months. Businesses that are unable to file their provincial tax return(s) by the due date may submit a request for relief from penalty and interest charges on the return(s) affected.
- Audit Suspensions – at this time, audit program and compliance activities have been suspended to allow businesses time to focus on the health and safety of their customers and staff, reduce impacts to their business operations, and minimize the spread of the virus through reduced audit travel.
- Crown Utility Interest Deferral Programs – earlier this week, the government announced a crown utility interest deferral program waving interest on late bill payments for up to six months. Effective immediately, the crown utility interest deferral program is available to all crown utility customers.
- Student Loan Repayment Moratorium – effective immediately, a six-month student loan repayment moratorium has been put in place, mirroring a similar federal provision. This provides individuals with student loans immediate relief, and comes at a $4 million cost to the provincial government.
- Business Response Team to be Established – the Government of Saskatchewan will be establishing a webpage for businesses to access information and receive timely updates on provincial support initiatives. This will be complemented by the establishment of a Business Response Team, led by the Ministry of Trade and Export Development, which will work with businesses to identify program supports relevant to particular businesses. Once the Business Response Team has been established, contact information will be communicated to the public, and to local chambers of commerce for dissemination to chamber membership.
For more details with respect to the above support measures please see the following link: Saskatchewan Financial Support
Saskatchewan Labour Standards
- Individual employee (and group) notice requirements and related information can be found at the following link: Saskatchewan Employment Standards – Layoffs and Terminations.
- Changes to Employment Standard Regulations –
The Employment Standard Regulations have been amended to:
- Ensure that during a public emergency, businesses will not have to provide notice or pay in lieu of notice when they lay-off staff if it is for a period of 12 weeks or less in a 16-week period.
- If an employer lays off employees periodically for a total of more than 12 weeks in a 16-week period, the employees are considered to be terminated and are entitled to pay instead of notice as outlined in the Act. This will be calculated from the date on which the employee was laid off.
- These amendments create a balance for employers and employees where the difficult decision may be made to lay-off employees due to public health emergencies. In this circumstance, employees would have immediate access to new federal employment insurance programs, while keeping employers financially stable to ensure employees have a job to return to.
- Legal counsel – we strongly recommend businesses consult legal counsel with respect to any layoffs as a result of COVID-19.
Ensuring Leave For Employees During Public Health Emergencies
- The Government of Saskatchewan introduced amendments to The Saskatchewan Employment Act ensuring employees have access to job protected leaves during a public health emergency.
- The proposed amendments to the Act are:
- to remove the requirement of 13 consecutive weeks of employment with the employer prior to accessing sick leave;
- to remove the provision requiring a doctor’s note or certificate; and
- introduction of a new unpaid public health emergency leave that can be accessed:
- when the World Health Organization has determined that there is a public health emergency and the province’s chief medical health officer has also issued an order that measures be taken to reduce the spread of a disease; or
- the province’s chief medical health officer has independently issued an order that measures be taken provincially to reduce the spread of a disease where it is believed there is sufficient risk of harm to citizens of the province. The orders would also be made public to ensure everyone is aware of the direction.
- The amendments to the Act would come into force retroactive to March 6, 2020.
Employment Insurance (EI) – Pre-Existing Programs
- Standard EI benefits are available after a two week waiting period.
- Supplemental Unemployment Benefit Program: Allows employers to top-up pay without impacting EI benefits. See the following link for details: Supplemental Unemployment Benefit Plan.
Canada’s COVID-19 Economic Response Plan
Since the beginning of March, restrictions and measures related to COVID-19 have rapidly escalated. While the first stages focused on public health and safety, in very short order, businesses and personal finances began to be affected. It is clear that these challenges will become worse before they get better. In an effort to combat these effects, the Government of Canada released a series of financial measures in mid-March. You can find the federal government’s document here: Canada’s COVID-19 Economic Response Plan – Support for Canadians and Businesses
This document summarizes selected government comments up to March 18, 2020.
Support for Canadians
- Service Canada will be waiving the one-week waiting period for EI sickness benefits for those individuals in imposed quarantine. This measure will be in effect as of March 15, 2020.
- The Regulations to the Employment Insurance Act provide guidance with respect to being under “quarantine”. Quarantine can include a situation where individuals are recommended to quarantine by an official of public health and were also asked by their employer. For practical purposes this could include individuals returning from travel abroad. The following link provides a technical definition of “quarantine”: Employment Insurance Regulations.
- The requirement to provide a medical certificate to access EI sickness benefits is waived for individuals in quarantine. See the following link for additional information: Employment Insurance Changes Due to COVID-19.
- Modifications to EI Work Sharing Program (including making the program easier to access). See the following link for additional information: Work Sharing Program.
- Emergency Care Benefit – For those in quarantine or suffering from COVID-19 and would not ordinarily be able to claim EI. Application will be available in April 2020. See the following link for additional information: Emergency Care Benefit.
- Goods and Services Tax Credit (GSTC) – average boost for the 2019-2020 benefit year will be approximately $400 for individuals and $600 for couples.
- Canada Child Tax Benefit (CCTB) – Increase of up to $300 per child, all extra amounts will be paid in May.
- Canada Student Loans – six month interest-free moratorium for all individuals currently repaying.
- Registered Retirement Income Funds (RRIF) – minimum withdrawals reduced by 25% in 2020.
Flexibility for Canadians
- Individual Tax Filing Deadline – extended to June 1, 2020.
- Trusts Tax Filing Deadline – extended to May 1, 2020 (for December year ends).
- Corporate and Partnership Tax Filing Deadlines – no extensions announced.
- Deferral of income tax owing, instalments due and interest owing – for individuals and corporations until after August 31, 2020. There is some uncertainty with respect to existing balances owing for which a notice of assessment has not been received by the taxpayer.
- GST, payroll withholdings or other balances owing – no deferral announced
- Electronic Signatures – effective immediately electronic signatures will be recognized as meeting the requirements of the Income Tax Act (includes T183 and T183CORP).
Role of Financial Institutions
- Minister of Finance is in constant contact with Canada’s largest banks.
- Banks are committed to flexibility – could include: up to a 6 month deferral of mortgage payments and the opportunity for relief on other credit products.
- CMHC will be providing additional tools and relief to assist home owners.
- Canada’s largest banks will be injecting up to an additional $300B into the economy.
Through discussions with lending partners in the local Saskatoon community we have been provided the following general commentary:
- Lenders are considering postponements, interest free periods and similar arrangements on a case by case basis and in most cases appear highly motivated to assist their clients through these challenging times.
- Certain industries will have more significant economic impacts on their businesses and lenders are of course taking these factors into account.
- Most lenders appear to be focusing on current client relationships as they have a pre-existing understanding of the clients business and cash flow needs.
- Business Credit Availability Program (BCAP) – BDC and EDC will provide more than $10B of additional support to small and medium sized businesses. We understand that BDC will have access to working capital loans at very attractive interest rates and repayment terms with reduced due diligence requirement in light of the immediate need for financing in the market place. Visit BDC’s website for the most up to date information.
- Near term credit for Farmers will be facilitated through FCC.
Helping Businesses Keep Their Workers
- To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months (remuneration paid on or after March 18th and before June 20th). The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
- We hope to see draft legislation in the near term as the details of this program will be extremely important for understanding eligibility for and administration of the program.
Flexibility for Businesses Filing Taxes
- No income tax or GST audits for the next four weeks.
- Audits underway will be suspended for the majority of taxpayers.
Supporting Financial Market Liquidity
- Insured Mortgage Purchase Program (IMPP) – Government will purchase $50B of insured mortgage pools through CMHC to provide long term stable funding to banks and mortgage lenders.
- Many of the federal measures listed above have only been announced recently (March 18, 2020) and are noted as requiring Royal Assent. In recent public comments, it was indicated that the opposition parties have promised their support to move these measures quickly, therefore, we can presumably expect draft legislation in the short term.
- Similarly, the Government of Saskatchewan will be providing further updates and details with respect to their support measures in the coming days and weeks.
Over the next days and weeks, the specifics on these programs will be released. Most of the details for these initiatives will be released on one of the following webpages:
Employment and Social Development Canada: https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html
Saskatchewan Government Updates: https://www.saskatchewan.ca/government/health-care-administration-and-provider-resources/treatment-procedures-and-guidelines/emerging-public-health-issues/2019-novel-coronavirus/~/link.aspx?_id=6C6BF971659346E0B8E9DE4AE3B2AFF9&_z=z
As the situation develops further, there may be additional government measures, or modifications to those already announced. Please contact our office at 306-657-8999 for any inquiries with respect to the above information.