It’s been a roller coaster ride since last week.  New coronavirus cases are announced everyday.  

It feels like government policies are changing by the minute.  

When you are a mom working from home and you have a kid who wants to nap on you, there is only so much you can do. 🙄🙄 #gratefulmom

March break has been extended.  Canada is shutting down the border.  New death toll announced in Italy. New measures are imposed to get ahead of the curve.  

Everyone is on edge every day, waiting and hoping some better news will come out.  

Many real estate investors have been asked by tenants to provide help.  Many of us, as self-employed individuals and small business owners, are also looking for financial help from our government.  

As a fellow landlord myself, we need to know all the government support available to help our tenants through these difficult times.  I would pay extra attention to points 1, 2 and 3 to assist your tenants.  

If you are off work and staying at home, unable to earn any income, I would pay attention to points 1 through 6 below.  

As a fellow small business owner, pay attention to all the measures available, including working with the government to reduce working hours of your employees.  

  1. Increased GST credit & increased annual Canada Child Benefit payment 

The government is going to provide a one-time special payment via GST credit system by early May 2020.  

On average, this will be close to $400 for single individuals who qualify and $600 for families who qualify.  

It is worthwhile to mention that for a single individual without kids, you need to earn less than $46,649 to be entitled to GST credit.  For a single parent with 2 kids, you need to make less than $55,509 to qualify for any GST credit. 

For married couples with no children, you need to make a net family income of less than $49K to qualify.  

This increased GST credit is targeting people who are earning low and modest income.

The Government is also proposing to increase the maximum Canada Child Benefit amounts by $300 per child for qualifying parents. 

Both support measures are non-taxable. 

  1. Income support for workers & parents

Some short-term support was announced for workers & parents:

i. Emergency Care Benefit providing up to $900 bi-weekly for up to 15 weeks to: 

  • Workers and self-employed individuals who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
  • Workers and self-employed individuals who are taking care of elderly parents but can’t access the EI sickness benefits.
  • Parents with children who require care due to school closures and are unable to earn employment income.

Application is open April 1st.  You can apply via CRA MyAccount online or My Service Canada Account or a dedicated phone line.  

If you don’t have a CRA MyAccount or My Service Canada account, it is a good time to look into registering one. 

ii. EI Sickness Benefits will no longer have a one week waiting period, measure starts immediately

ii. Waiving the requirement to provide medical certificate to access EI sickness benefits

As with the longer-term support for workers, the government is providing an Emergency Support Benefit (again apply through CRA MyAccount) for people who are not eligible for EI and who are facing unemployment.  

For workers who agree to reduce their normal work hours, the CRA is implementing an EI Work Sharing Program to supplement these workers’ income.  The support will be extended to reduced work hours agreement to 76 weeks.  Details to come as to how to qualify for it.  

  1. Temporary interest-free moratorium on repayment of Canada student loans

For taxpayers and tenants who are repaying their student loan, this 6 month interest free moratorium can help ease the financial stress during this difficult time. 

  1. Extended filing deadline for individuals 

Income tax filing deadline for individual taxpayers is April 30.  This deadline has been extended to June 1, 2020.  

However, if you want to continue to receive GST tax credit benefits or the Canada Child Benefit, you would still be required to file on time by April 30 so as to avoid delay in receiving the benefit. 

It is worthwhile mentioning that the tax deadline is extended for self-employed individuals whose income tax filing deadline is June 15.  For real estate agents and other self-employed individuals, you are still required to file your return by June 15. 

  1. Income tax payable due between March 18 and August 31, 2020 can be deferred

Individual taxpayers and businesses are eligible to defer income tax payable and instalments that are owing on or after March 18, and before September 2020, without interest and penalties during this period. 

If you have income tax payable that’s accrued before March 18, 2020, your balance owing will still be subject to interest and potentially penalty as well.  

  1. HST payable is NOT deferred, but CRA will NOT start any post-assessment audit for GST/HST and Income Tax

It is worthwhile mentioning that the deferral is NOT available for any HST owing based on news released today.  

If you are a real estate agent and you owe HST, you’re still required to pay your HST owing by April 30.  

If you are a small business that charges HST on the sale of your product/services, you are still required to pay your HST balance and instalment on time.  

Only relief that we are getting is that the CRA will not start any post assessment for HST audits or income tax audits in the next 4 weeks.  They will also temporarily suspend current audits for a period of time.  

  1. Salary subsidy to help with small business owners

A temporary wage subsidy is available for small employers for a period of 3 months.  The subsidy will be equal to 10% of remuneration paid during this 3-month period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. 

If you have an employee earning $60,000 annual salary, which is equivalent to a $5K monthly salary, as an employer, you can qualify to get a subsidy for $500 for March, $500 for April and $375 for May.  

To take advantage of this subsidy, you can reduce remittances of income tax withheld on the employees’ remuneration.  

Using the same example, if you have only one employee that is earning $60K gross salary, $5K monthly salary, you’re required to remit $1,552.50 to CRA normally on a monthly basis.   With this subsidy, you simply need to remit $1,052.50 by the regular remittance deadline. 

To qualify for this benefit, corporations must be eligible for the small business deduction, or non-profit organizations and charities. 

From the limited information released, it does not seem like the subsidy is available for small business owners who are sole proprietors or partnerships.  

  1. Credit can be available to small business owners

As some of you know, we are renovating our new office space, financed by Business Development Bank of Canada (BDC), a crown corporation owned by the government. 

I am also anxious to see how this Business Credit Availability Program (BCAP) is going to deploy $10 billion additional support to small and medium sized businesses. 

Minimum information is available at this point as to how small business owners can qualify.  

As a real estate investor and small business owner myself, I welcome all the support we get from the government.  Many of these measures have great intention but may not be able to include everyone who’s in need.

Until next time, stay safe and stay a safe distance too!

Cherry Chan, CPA, CA

Your Real Estate Accountant

4 replies
  1. Norm Carr
    Norm Carr says:

    Is the relief for a realtor only going to be a 30 day reprieve if you are the target of a tax audit? It looks like we get ignored again unless we owe Rev. Canada money

    Reply
  2. Cherry Chan
    Cherry Chan says:

    Hi Norm, thanks for your message.

    You can qualify for relief under the Emergency Care Benefit if you have to stay home to take care of your kids, quarantined or take care of your elderly parents. This benefit applies to everyone including self-employed individuals.

    It is difficult for the government to come out with policies to cover everyone… what I learned from a speech done by Michelle Obama is that politics are all about compromise. It’s unfortunate but it’s true.

    If there’re any specific measures targeting self-employed individuals, I will be sure update you.

    Stay safe,
    Cherry

    Reply
  3. Monika
    Monika says:

    Thank you Cherry for these tips. I were scratching my head to be prepare answers for my tenants. I have read news that there is no benefit other than deferred mortgage payments to home owners. It is little disappointing that no shield for landlords. Just a question regarding EI benefits- people who are on work permit in Canada are laid off due to this issues. Do they qualify for EI benefits as well or no? Thank you

    Reply
    • Cherry Chan
      Cherry Chan says:

      Hi Monika, mortgage deferral, property tax deferral are available to landlord.
      I don’t really know if people with work permit would qualify – I would assume so, but please check directly with CRA by calling them at 1-800-959-8281 or Service Canada.

      If I were the person on work permit, I would just go ahead to apply for it anyway and see if I qualify.

      Cherry

      Reply

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