Update on Mortgage Deferment and Key Points for Business Owners

It is imperative to understand that Lender's computer systems have not been programmed to handle this unprecedented crisis, nor do they have the staff in place to handle the overwhelming volume of calls and emails they are receiving due to the Covid-19 crisis. 

It shouldn't be a surprise to hear that processing errors will likely happen, as much of this time-sensitive work is being completed manually. If you discover an error, contact your Lender to have the situation corrected. Stay calm, be nice, and be patient as you are speaking to a fellow human being who is trying to cope like the rest of us.

Here are the key points of the updates I have received since the launch of the mortgage deferral option:

 

Filing of T2s due after March 18th, 2020 has been extended to June 1st, 2020.

Filing of T1s also extended to June 1,2020

There are no extensions to self-employed individuals – due date for these T1 returns remains June 15th, 2020

Payments on T1 and T2 (Partial only) including instalments extended to September 1st, 2020

No extension on payments of source deductions, presumably as a) 10% credit has been provided b) 75% wage subsidy available to eligible companies

 

No extension provided for filing returns although no penalties and/or interest on these until after June 30th, 2020.

Remittances on GST due after March 27th, 2020 now extended to June 30th, 2020.

 

10% reduction on source deductions for the period March 18/20 to June 19th, 2020 is available to Canadian Controlled Private Corporations (CCPC) with a taxable capital not exceeding $15M.

This reduction cannot be used to decrease the employer & employee portions of EI and CPP. This would imply that only the income tax portion can be reduced.

The max per employee is $1,375, while the employer max is $25,000.

 

This subsidy is still being worked out but this is what we know so far:

The company must show a 30% decrease or more in revenue, when compared to the same period last year for the months of March, April and May.

The monthly periods would start March 15th to April 11th, 2020. (So it would seem to be imperative at this point to capture the exact date of the transaction.)

Application is on a monthly basis thru My Business Account (CRA website) or an app which has yet to be released.

Benefit is equal to 75% of basic remuneration paid to a max per employee of $847/week and will be paid to the employer. It has been indicated that basic remuneration excludes any salary increase during this period of time.

Any claim under CEWS must be reduced by the TWS subsidy.

 

Please note – this may take several weeks to implement.

 

Canada Emergency Response Benefit (CERB) 

$2,000 per month up to 4 months

Application online through My Account or using the automated phone line starting April 6th, 2020.

 Check the CERB Website 

It is highly recommended that you sign up for direct deposit, if you have not already done so.

You can apply for the CERB online through your My CRA account, or over the phone. Starting April 6, the government is recommending that people stagger their application by birth month in order to avoid overwhelming the system.

* January, February, March: April 6, Mondays after that

* April, May, June: April 7, Tuesdays after that

* July, August, September: April 8, Wednesdays after that

* October, November, December: April 9, Thursdays after that

* People with any birth month can apply Fridays, Saturdays and Sundays.

 

An individual cannot be earning employment or self employment income if applying for CERB.

This would imply it may be best for an employer to have some employees working and some either on EI or on CERB.

 

The Finance Dept has been made aware that a number of owner/managers are remunerated via dividends. 

Discussion was held on April 3rd regarding this topic. 

Stay tuned for more info.

 

Please also remember the BC government has subsidies for individuals, i.e. namely BC Emergency Benefit which is a one time $1,000 and also rent subsidy. More information will be coming out on how these will be administered.