I discussed one big change that could help Canadians with their next tax return when this year started. That change was an upward adjustment to the Basic Personal Amount (BPA) that allows Canadians to pay no federal income tax up to a certain amount. Prime Minister Justin Trudeau and the ruling Liberals vowed to bring the BPA to $15,000 by 2023.
The outbreak of COVID-19 has been a global game changer. This crisis has already inspired changes in how Canadians will file in 2020. This is due to the $82 billion aid package that was pushed forward by the Canadian government. The stimulus package includes $27 million in emergency aid for workers and businesses and $55 million in tax deferrals.
Let’s look at some of the ways Canada Revenue Agency has provided relief in 2020.
Two new government programs
In response to this crisis, the federal government has rolled out two brand-new programs. The $10 billion Emergency Care Benefit will provide $450 a week for 15 weeks for workers who are quarantined or sick. It will also provide relief for parents who are forced to stay home to care for their children due to school closings.
The $5 billion Emergency Support Benefit will provide funding to recently unemployed Canadians. It targets those who do not qualify for Employment Insurance (EI). However, there are still details to be unveiled from the Canada Revenue Agency on this second program.
At this time of the year, most Canadians will have been actively preparing their tax return ahead of the April 30, 2020, deadline. The whirlwind of changes brought about by measures to contain the COVID-19 outbreak has spurred the government to grant Canadians some breathing room. Thus, the Canada Revenue Agency will defer the filing due date for the 2019 tax returns of individuals until June 1, 2020.
However, individuals who expect to receive benefits under the GSTC or the Canada Child Benefit are encouraged to avoid a delay, so they can ensure their entitlements for the 2020-21 benefit year. The CRA will allow all taxpayers to defer the payment of any income tax amounts until after August 31, 2020.
Relief for Canadian businesses
Many businesses have already been hit hard by the COVID-19 shutdowns. The government has proposed to provide eligible small employers a temporary wage subsidy for a period of three months. This subsidy will be equal to 10% of remuneration paid during the period. The total works out to a maximum of $25,000 per employer. Businesses will also benefit from the tax deferral and start payments after August 31, 2020.
Bonus: Seeking relief on the markets
The package from the government will provide some breathing room for Canadians and businesses that may be struggling right now. Investors may want to seek relief of their own in this volatile market. Fortunately, there are high-quality dividend stocks trading at a discount in the bear market.
Fortis is still one of my favourites. The company has delivered over 45 consecutive years of dividend growth. Its stock offers a quarterly dividend of $0.4775 per share, representing a 3.8% yield. Shares of Fortis possess a favourable price-to-earnings ratio of 13 and a price-to-book value of 1.3 at the time of this writing.
Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you. Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.
Fool contributor Ambrose O'Callaghan owns shares of FORTIS INC.