e-2683 (Taxation)

We know that across Canada, families, workers and businesses are facing uncertainty. Our Government is providing support to help Canada’s economy through this challenge and to make sure we are ready to bounce back quickly when the time comes.  In these extraordinary times, no Canadian should have to worry about paying their bills, rent or putting food on the table. Our Government will be unwavering in our commitment to support Canadians, our healthcare system and our economy.

Through Canada’s COVID-19 Economic Response Plan, we are providing immediate assistance to help Canadians and businesses get through these challenging times. Details of the Plan can be found online on the Government of Canada’s website at canada.ca/economic-response-plan. Examples of measures to support businesses include the Canada Emergency Wage Subsidy (CEWS), the proposed Canada Emergency Rent Subsidy, the Canada Emergency Business Account (CEBA), and the Business Credit Availability Program (BCAP).  

• In October 2020, the Government announced its intention to extend the CEWS until June 2021, to help businesses keep employees on the payroll and encourage employers to re-hire their workers. This measure is part of the Government’s commitment to create over 1 million jobs and restore employment to the level it was before the pandemic.
• The Government also announced in October its intention to introduce a new Canada Emergency Rent Subsidy, which would provide simple and easy-to-access rent and mortgage support until June 2021 for qualifying organizations affected by COVID-19. The rent subsidy would be provided directly to tenants, while also providing support to property owners.
• The Government also announced plans to further expand the CEBA to allow more businesses to qualify and to provide an additional loan of $20,000, based on an assessment of ongoing need. This means businesses are eligible to access a total of $60,000 in interest-free loans, $20,000 of which will be forgivable if the balance is repaid by December 31, 2022. 
• The BCAP includes several support options to access credit, including  a Loan Guarantee and Co-Lending Program for Small-and Medium-Sized Enterprises (SMEs), which offer business with loans of up to $6.25 million and $12.5 million, respectively. Interested businesses are encouraged to contact their financial institutions directly to see how they may benefit from these programs. 

In addition, tax assistance was provided to businesses by allowing them to defer, until after September 30, 2020, the payment of income tax amounts that became owing on or after March 18 and before September 2020, and to defer Goods and Services Tax/Harmonized Sales Tax (GST/HST) and customs duty payments until June 30, 2020.

The Government recognizes the importance of the cultural and arts sector to Canadians. On May 8, 2020, the Minister of Canadian Heritage announced the details of a new COVID-19 Emergency Support Fund for Cultural, Heritage and Sport Organizations. The $500 million Emergency Support Fund provides additional temporary relief to support cultural, heritage and sport organizations and help them plan for the future. The Fund will help maintain jobs and support business continuity for organizations whose viability has been negatively impacted by the COVID-19 pandemic.

Our Government also provided support to families through a special one-time $300 top-up of the Canada Child Benefit for each child, in May 2020. Additionally, for over 12 million low- and modest-income families in Canada, we doubled the GST credit in April, giving, on average, single adults close to $400 more and couples close to $600 more.

Our Government is committed to continuing to do whatever it takes to protect individuals and businesses from the economic disruption caused by the pandemic. 

A limited number of exceptions are made to the wide application of the GST/HST, which include most education services and certain children’s programs provided by public and non-profit organizations.  With respect to education, most educational services provided by a school board, college, or university are exempt from GST/HST. As part of the GST/HST relief for education, an exemption is provided for services of tutoring or instructing an individual in a course that is approved for credit or that follows a curriculum designated by a school authority, or that is a prescribed equivalent of such an approved course.  Music lessons designed to result in a progression or development of skills toward a pre-set lesson goal or objective and that involve formal instruction are also exempt as they have been prescribed as equivalent to courses that are part of a school curriculum.

In recognition of the important role that charities, non-profit organizations and other public sector bodies (PSBs) play in Canadian society, certain supplies of goods and services made by these organizations are exempt from the GST/HST. In this regard, supplies of athletic or recreational programs, including many children’s arts activities, provided to children 14 years of age or under are generally exempt when provided by a PSB.

Specific tax relief from the GST/HST is provided for low- and modest-income Canadians through the GST Credit rather than excluding more items from the tax base. The GST Credit normally provides about $5 billion in annual assistance to help offset the sales tax burden faced by low- and modest-income families and individuals, thereby ensuring that sales tax burdens are sensitive to differences in income and family type. The enhanced GST Credit for this year will provide over $10 Billion in assistance (including the regular credit as well as the special one-time COVID-19 payment).