Tax Measures Under Canada’s COVID-19 Economic Response Plan

On April 11, 2020, Bill C-14, A second Act respecting certain measures in response to COVID-19, which enacts the CEWS, received royal assent. The CEWS will be non-cumulative with the existing 10% wage subsidy.

This summary explains the above measures as well as sales tax measures for goods and services tax/harmonized sales tax (“GST/HST”) and provincial sales tax (“PST”) registrants who are directly impacted by COVID-19.

Federal Tax Measures for Canadian Businesses

10% wage subsidy

The Response Plan contains measures to help businesses retain their workers. Framework legislation enacted as part of Bill C-13 created a federal payroll deduction rebate for remuneration an eligible employer pays between March 18, 2020, and June 19, 2020. Eligible employers are individuals, non-profit organizations, registered charities, Canadian-controlled private corporations (“CCPCs”) having a business limit in the last taxation year greater than nil (i.e. eligible for the small business deduction), and partnerships whose members are comprised solely of the foregoing persons. In addition, an eligible employer must:

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