Written by Thomas Bauer, Greg Johnson, Ed Kroft, Darcy Moch and Taylor Page
Since March 18, 2020, the following updates have been released by the Government of Alberta and the Canada Revenue Agency (CRA) regarding their respective economic relief plans to help mitigate the effects of the COVID-19 outbreak on individuals and businesses.
Alberta's COVID-19 Economic Response Plan
On March 18, 2020, the Government of Alberta announced its plan to protect Alberta's families and economy, containing a number of provincial measures to help manage the financial hardships Albertans are experiencing during the COVID-19 outbreak.
Selected tax-related measures from the plan are summarized below.
Corporate Income Tax Deferral
The Government of Alberta will permit corporate income taxpayers to defer payment of their income tax balances and instalment payments, due after March 19, until August 31, 2020.
The plan does not expressly address whether tax balances owing by individuals will likewise be deferred. It also does not expressly address whether the above extensions apply to tax elections by individuals and trusts that are required to be filed by the filing-due date for their 2019 income tax returns.
The plan does not specify whether relief from interest and penalties will be granted during this payment deferral period.
The plan does not include any extension of the filing-due date for partnership information returns. Such returns should be filed within the regular prescribed statutory time limits.
Banking and Credit Union Support Measures
Provincial banking and credit unions will implement measures to assist individual and small business customers to mitigate the impact of the COVID-19 outbreak.
ATB Financial customers affected by COVID-19 will benefit from the following measures:
- Personal banking customers can apply for a deferral on their ATB loans, lines of credit, and mortgages for up to six months.
- Small business customers, in addition to payment deferrals on loans and lines of credit, will be provided access to additional working capital.
- For other business and agriculture customers, ATB will work with customers on a one-on-one basis and further solutions are being considered at this time.
Customers of Alberta credit unions affected by COVID-19 will also have access to a variety of programs and solutions designed to ease difficulties with loan payments and short-term cash flow. The particulars of these programs and solutions are not currently available, but individual and business members are encouraged to contact their credit union directly to begin working out a plan to meet their personal needs.
Other Financial Support Measures
- Residential, farm, and small commercial customers will be able to defer utility bill payments for the next 90 days to ensure no one will be cut off from these services during this period of financial strain.
- Utilities covered by this measure will include electricity and natural gas, regardless of the service provider.
Updates to the CRA COVID-19 Measures
Following the Department of Finance's announcement on March 18 regarding Canada's COVID-19 Economic Response Plan, the CRA has released further practical guidance regarding collections, audits, and appeals.
With regard to collections, the CRA has announced the following:
- Collections activities on new debts will be suspended until further notice, and flexible payment arrangements will be available for existing debts.
- If a taxpayer is prevented from making a payment when due, filing a return on time, or otherwise complying with a tax obligation because of circumstances beyond their control, they can submit a request to cancel penalties and interest using Form RC4288, Request for Taxpayer relief.
- Due to measures taken surrounding the COVID-19 virus, the CRA's Debt Management Call Centre service is not currently available.
With regard to audits, the CRA has announced the following:
- The CRA will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks.
- For a majority of taxpayers, the CRA will temporarily suspend audit interaction with taxpayers and representatives. Interaction with taxpayers will be limited to those cases where the legal deadline to reassess a tax return is approaching, and in cases of high risk GST/HST refund claims that require some contact before they can be paid out.
With regard to objections and appeals, the CRA has announced the following:
- As objections related to taxpayer benefits and credits have been identified as a critical service, this service will continue to be delivered during the COVID-19 outbreak. As a result, the CRA does not expect any delays associated with the processing of these objections.
- With respect to objections related to other tax matters filed by individuals and businesses, the CRA is currently holding these accounts in abeyance. No collection action will be taken with respect to these accounts during this period of time.
- With respect to appeals before the Tax Court of Canada (TCC), on March 16, 2020, the TCC has ordered the extension of all timelines prescribed by the rules of that Court while it is closed for business until March 30, 2020.
The Bennett Jones Tax team will continue to provide updates as further details are released. We remain available during this period to answer questions and provide advice regarding how these measures might impact your business interests, including any tax audits, disputes and litigation.