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What Individuals Need to Know About Canada's COVID-19 Fiscal Response

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As the fight to stop the spread of COVID-19 ramps up across the country the Canadian government has implemented immediate measures to help those who may be struggling or facing financial hardship as a result. In this article we'll take a look at the support that's been announced for individuals amid the ongoing COVID-19 pandemic, while our other article will outline what measures have been put in place to help businesses.

Interim Income Support for Parents and Workers

If you are sick, quarantined, or forced to stay home to take care of your children as a result of COVID-19 and do not receive paid sick leave from your employer, the federal government will be assisting in the following ways:

  • For those who qualify for Employment Insurance (EI), the one-week waiting period to receive sickness benefits is being waived. The government is also waiving the need for a medical certificate to access these benefits. These changes went into effect March 15, 2020.

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New Emergency Care Benefit: this benefit will provide Canadians up to $900 every two weeks for up to 15 weeks. It will be doled out and overseen by the Canadian Revenue Agency (CRA) and provides income support to:

  • Workers (including the self-employed) who do not qualify for EI sickness benefits but are sick or quarantined as a result of COVID-19.
  • Workers (including the self-employed) who do not qualify for EI sickness benefits who must take care of a family member who is sick with COVID-19.
  • Parents who must take care of their children because of school or daycare closures and cannot earn employment income as a result, regardless if they qualify for EI or not.

People will be able to apply for the new Emergency Care Benefit beginning in April, 2020. They will have to attest they meet the eligibility requirements listed above and re-attest every two weeks thereafter to reconfirm they're eligible. There will be three ways to apply for the benefit:

  1. by accessing it on their CRA MyAccount secure portal;
  2. by accessing it from their secure My Service Canada Account; or
  3. by calling a toll free number equipped with an automated application process.

Need help seeing through all the financial turbulence brought upon by COVID-19? Book a free consultation with us and let us guide you through the storm.

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Long-Term Income Support for Workers

If you've lost your job or face reduced hours as a result of the COVID-19 pandemic, the federal government will be providing support in the following ways:

  • $5 billion for the new Emergency Support Benefit which will be administered through the CRA and go to those workers who are facing unemployment and not eligible for EI. More details on how this benefit will operate and how people can apply for it will hopefully be coming soon.
  • An EI Work Sharing Program that provides EI benefits to those workers who have agreed to reduce their hours as a result of developments beyond their employer's control. The program has eased eligibility requirements, streamlined the application process, and agreements can be extended up to 76 weeks now.

Other Important Measures and Support

  • Proposing a special one-time payment of the GST credit which will essentially double the maximum amount people can receive. This income boost works out to around $400 for individuals and $600 for families.
  • Proposing to increase the maximum annual Canada Child Benefit (CCB) amount by $300 per child. On average that works out to an additional $550 a year for families receiving the CCB.

When put together, the two above proposals would provide a single mother with a low to modest income and two children nearly an additional $1,500 of short-term financial support.

Tax Flexibility

  • Individuals now have until June 1, 2020 to file their taxes. If you'll be receiving the GST credit or CCB though, the government recommends not delaying your filing to make sure your entitlements for the 2020-21 year are properly determined.
  • Any money you owe for taxes will not be due until September 1, 2020. There will be no interest or penalties assessed to these amounts or installments either until then.
  • T183 forms may now be signed electronically as well, limiting the need for tax preparers and clients to meet face-to-face

Are you worried about the impact COVID-19 will have on your taxes and personal finances? Call us today at 403-605-6887 so we can walk you through all the changes and set up a sound financial plan to weather these uncertain times.

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Student Loan Moratorium

  • For those individuals currently repaying their Canada Student Loans there will be a six-month interest-free moratorium on doing so. It's estimated this should provide these individuals with an additional $160 or so per month.

Banking and Mortgages

The Government of Canada has been working closely with the big banks to institute flexible measures for those who are facing financial hardship. The banks, in return, have committed to working with customers who may be struggling due to the impacts of COVID-19. This will happen on a case-by-case basis and will include the following measures:

  • Six-month payment deferral for mortgages
  • Possible relief for other credit products

The above monumental measures implemented by the Canadian government are a testament to the unprecedented times we find ourselves in due to COVID-19. If you're concerned about the state of your personal finances or taxes in light of the ongoing pandemic, book a free consultation with one of our trusted Chartered Professional Accountants today and let us help guide you through this storm.

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