The COVID-19 pandemic and the ensuing lockdown and physical distancing restrictions have dealt a major blow to businesses across Canada.
While the federal government has put in place a number of economic programs to help out Canadian businesses, the Ontario government, too, has introduced several financial relief measures to support businesses in the province through this tough time.
Interest and penalty relief
On March 25, the Ontario government provided a five-month relief period for Ontario businesses that are not in a position to file or remit certain provincial taxes on time due to the COVID-19 crisis.
While tax filing and remittance deadlines remain unchanged, no penalties or interest will be levied on Ontario businesses between April 1, 2020, and August 31, 2020, for missing these deadlines.
The provincial taxes included in the relief period are as follows:
- Employer Health Tax
- Tobacco Tax
- Fuel Tax
- Gas Tax
- Beer, Wine & Spirits Tax
- Mining Tax
- Insurance Premium Tax
- International Fuel Tax Agreement
- Retail Sales Tax on Insurance Contracts and Benefit Plans
- Race Tracks Tax
This relief complements the existing federal measures available to businesses. But it doesn’t include businesses with outstanding taxes, interest or penalties due to the government from previous filing periods.
Workplace Safety and Insurance Board (WSIB) financial relief package
This measure allows businesses to defer WSIB payments for up to six months.
All Ontario businesses covered by the WSIB’s workplace insurance are automatically eligible for this package.
Schedule 1 businesses that owe premiums to WSIB are permitted to defer reporting and payments until August 1, 2020. Schedule 2 employers who individually pay the total costs of WSIB benefits for their injured workers, may defer reporting and payments until August 31, 2020.
No interest will accumulate on outstanding premium payments and no penalties levied during the deferral period. WSIB will not change premium rates for 2020.
Affordable electricity bills
Residential, farm and small business time-of-use customers in Ontario will be charged the lowest rate — 10.1 ¢/kWh — 24 hours a day.
This rate will be applied to bills from March 24, 2020, to May 8, 2020.
Employer Health Tax Relief
The Ontario government has increased the Employer Health Tax exemption for 2020 from $490,000 to $1 million.
This temporary doubling of Employer Health Tax exemption will be retroactive to January 1, 2020, and will return to $490,000 on January 1, 2021.
Please note that the eligibility for exemption, tax rates and all other details remain the same.
You can start paying instalments after your payroll has exceeded the new $1 million exemption level.
If the increased exemption amount relieves you from making instalment payments, you are not required to notify the Ministry of Finance. In case you have already filed a final or special return for 2020, the Ministry will review all 2020 Employer Health Tax returns and correct them for the new exemption level.
Need support navigating business issues related to the COVID-19 pandemic?
Whether you are struggling to sustain cash flow or update HR policies, we can help you get through this crisis. To get advice on how to maintain your business during the COVID-19 pandemic, call our experts today: 1 (833) 247-3652.