On November 30, 2020, Deputy Prime Minister and Minister of Finance Chrystia Freeland released the 2020 Fall Economic Statement. As anticipated, it proposes further spending and relief measures in response to the pandemic.
Subsidies and Relief
Two programs, Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS), have been enhanced. From December 20, 2020 – March 13, 2021, the CEWS maximum rate would increase to 75%, and the CERS rates will remain at up to 65% plus additional subsidy for lockdown support, where applicable. Both programs will continue in some form until June 2021, based on announcements so far.
Temporary support up to $1,200 per child under age six was also proposed for low- and middle-income families eligible for Canada Child Benefit (CCB). The $1,200 per child would apply for families with $120,000 or lower annual income. Families eligible for CCB but with higher income levels are eligible for $600 per child.
The announcement includes proposals for low-interest loans up to $1 million with terms up to 10 years for highly affected sectors, including:
- Tourism & Hospitality,
- Arts & Entertainment.
As proposed, GST/HST will expand to reflect more current economic realities, with several changes effective July 1, 2021.
GST/HST would extend as follows:
- Cross-border digital product and service sales provided by vendors with no physical presence in Canada;
- Sale of goods provided by foreign-based vendors selling through fulfillment warehouses in Canada; and,
- Platform-based short-term rental accommodation, with responsibility placed on both the property owner and the digital accommodation platform.
Income Tax Measures
Employee home office expenses for 2020 may be deductible through a simplified deduction process. This deduction allows employees working from home with ‘modest expenses’ to claim up to $400 without detailed record-keeping or signed forms from employers. Stay tuned for more details to come on this deduction.
Employee stock option changes have been announced, further to initial announcements in June 2019. These proposed changes apply beginning July 1, 2021. They limit employee stock options qualifying for the stock option deduction at $200,000 annually based on the fair market value of underlying shares when options are granted. Proposed changes took into consideration the hardships of small business or start-up employees. These rules won’t apply to employee stock options granted by a Canadian-controlled private corporation (CCPC) employer or a non-CCPC employer with annual gross revenues of $500 million or less.
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