Legislative Costing Notes

Waiving Part I Broadcasting Licence Fees and Providing Equivalent Funding to CRTC

Providing the Canadian Radio-television and Telecommunications Commission (CRTC) with funding to offset the revenue loss from waiving the Part I Broadcasting Licence Fees for the 2020-21 fiscal year.

Introduction of the Canada Emergency Business Account

The Canada Emergency Business Account provides interest-free loans of up to $40,000 to small businesses and not-for-profits, to help them cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus.

Loan Guarantee Program for Small and Medium Sized Enterprises (SMEs)

Export Development Canada (EDC) guarantees 80% of new loans to SMEs, up to $6.25 million, with a total program envelope of $20 billion.

Canada Emergency Response Benefit (CERB)

Canada Emergency Response Benefit (CERB) is a taxable benefit that would provide $500 a week for up to 16 weeks for workers who lose their income due to reasons related to COVID-19. This includes Canadians who have lost their job, are sick, quarantined, taking care of someone who is sick with COVID-19 as well as working parents who must stay home without pay to care for children who are at home because of school and daycare closures. Workers are defined as anyone who received at least $5,000 in the previous 12 months in employment income, self-employment income, Employment Insurance benefits, or other provincial benefits as outlined in Bill C-13. Workers are eligible for four weeks of CERB for every two weeks they are unable to earn income.

A Moratorium on the Repayment of Canada Student Loans

Automatically pausing the repayment of Canada Student Loans (CSL) and Canada Apprentice Loans (CAL) for six months, starting March 30, 2020 until September 30, 2020. Interest will not accrue during this time.

Financial support for Canada’s Air Transportation Sector

Waiving rents paid on ground leases for the 21 airport authorities that form part of the National Airport System and for PortsToronto which operates Billy Bishop Toronto City Airport for March 2020 through December 2020.

Extended deadlines to file income tax returns and pay income taxes

For individuals, the deadline to file a tax return will be deferred until June 1, 2020. For corporations that would have a filing due date between March 18 and June 1, 2020, the filing due date will be deferred until June 1, 2020. For trusts with a tax year end date of December 31, 2019, the filing due date will be deferred until May 1, 2020. For trusts that would have a filing due date in April or May, the filing due date will be deferred until June 1, 2020.

For these taxpayers (individuals, corporations and trusts), the payment of any income tax balance due or tax installments after March 18 will be deferred until September 1, 2020. No interest or penalties will accrue on these amounts.

Co-Lending Program for Small and Medium Sized Enterprises

The fiscal impact of this cost estimate reflects the net interest income from issuing these additional loans, while accounting for provisions for credit losses and additional operational/administration expenses.

To complete this cost estimate, PBO used financial data from BDC’s recent annual reports (FY 2014-15 to 2018-19). PBO calculated the average net interest income, less provisions for credit losses and additional administration expenses, as a percentage of outstanding loans receivables, averaged over 5 years.

PBO used this average profitability ratio to calculate the incremental income earned on the additional $20 billion. PBO assumed that the entire loan amount would be distributed in 2020-21.

Additional Lending Capacity for Farm Credit Canada (FCC)

Increasing the lending capacity of Farm Credit Canada by an additional $5 billion.

GST Credit special payment

Doubling the maximum Goods and Services Tax Credit claimable for tax filers for the 2019-20 benefit year. A one-time special payment will be provided by early May 2020.

Insured Mortgage Purchase Program (IMPP)

Dans le cadre du PAPHA, le gouvernement achètera jusqu’à 150 milliards de dollars de blocs de prêts hypothécaires assurés par l’entremise de la Société canadienne d’hypothèques et de logement (SCHL). Ce programme vise à soutenir la liquidité des marchés financiers afin que les entreprises et les particuliers puissent continuer à obtenir des prêts. Il a été utilisé pour la dernière fois en 2008-2010.

Increase to the maximum annual Canada Child Benefit (CCB) payment amounts

Increasing the Canada Child Benefit by $300 per child for the month of May 2020. The benefit for children under the age of six will increase from $6,639 to $6,939 and the benefit for children ages six to seventeen will increase from $5,602 to $5,902.

Decreasing the minimum withdrawal rate from Registered Retirement Income Funds by 25%

Registered Retirement Income Fund (RRIF) holders are required to withdraw a prescribed percentage of their RRIF each year. The prescribed amounts are determined by the holder’s age, or optionally the age of their spouse. This policy calls for the reduction of the prescribed minimum withdrawal rates from RRIFs by 25% across all ages. This would be in effect for the 2020 calendar year only.

Cost Estimate of Bill C-221, An Act to amend the Income Tax Act (oil and gas wells)

The bill establishes an income tax credit for qualifying corporations equal to the corporation’s general rate reduction percentage for the taxation year multiplied by the total of all expenses incurred by the corporation in that taxation year for the closure of an oil or gas well. This tax credit applies to expenses incurred after 2019 and before 2026.

A qualifying corporation is defined as a corporation that owns one or more oil or gas wells in Canada which, for a taxation year, produced on average a total quantity of oil or gas that is less than 100,000 barrels of oil equivalent per day. To be considered for this tax credit the oil or gas well must be plugged and capped, surface structures and associated infrastructure dismantled, and the surface restored to its previous condition.

Cost Estimate of Increasing the Basic Personal Amount Tax Credit

In December 2019, the government announced its intention to increase the Basic Personal Amount (BPA) beginning in 2020. The BPA is an indexed non-refundable tax credit available to all residents of Canada. Individuals can also claim an equivalent amount if they have a dependent or partner, net of their dependents’ and partner’s net income.