An Act respecting further COVID-19 measures (S.C. 2020, c. 11)
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Assented to 2020-07-27
An Act respecting further COVID-19 measures
S.C. 2020, c. 11
Assented to 2020-07-27
An Act respecting further COVID-19 measures
RECOMMENDATION
Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act respecting further COVID-19 measures”.
SUMMARY
Part 1 amends the Income Tax Act to revise the eligibility criteria for the Canada Emergency Wage Subsidy (CEWS) in order to support those employers hardest hit by the coronavirus disease 2019 (COVID-19). It also extends the CEWS to November 21, 2020, with the ability to extend the CEWS by regulation to no later than December 31, 2020, and provides a revised calculation of the CEWS for the fifth and subsequent qualifying periods. Finally, it makes amendments to the Income Tax Act and the Income Tax Regulations to ensure that the CEWS operates effectively.
Part 2 amends the Pension Act, the Department of Veterans Affairs Act, the Children’s Special Allowances Act and the Veterans Well-being Act to authorize the disclosure of information for the purpose of the administration of a program to provide a one-time payment to persons with disabilities for reasons related to COVID-19. It also amends the Income Tax Act to authorize the use by officials, or disclosure to Government of Canada officials, of taxpayer information solely for the purpose of that one-time payment. Finally, it provides that any amount payable in relation to the administration of the program to provide that one-time payment is to be paid out of the Consolidated Revenue Fund.
Part 3 enacts the Time Limits and Other Periods Act (COVID-19) which addresses the need for flexibility in relation to certain time limits and other periods that are established by or under Acts of Parliament and that are difficult or impossible to meet as a result of the exceptional circumstances produced by COVID-19. In particular, the enactment
(a) suspends, for a maximum of six months, certain time limits in relation to proceedings before courts;
(b) temporarily enables ministers to suspend or extend time limits and to extend other periods in relation to specified Acts and regulations for a maximum of six months; and
(c) provides for the transparent exercise of the powers it confers and for Parliamentary oversight over the exercise of those powers.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
PART 1Income Tax Act and Income Tax Regulations
R.S., c. 1 (5th Supp.)Income Tax Act
1 (1) Subsection 87(2) of the Income Tax Act is amended by adding the following after paragraph (g.5):
Marginal note:COVID-19 – wage subsidy
(g.6) for the purposes of section 125.7, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation unless it is reasonable to consider that one of the main purposes of the amalgamation is to cause the new corporation to qualify for the deemed overpayment under subsection 125.7(2) or to increase the amount of that deemed overpayment;
(2) Subsection (1) is deemed to have come into force on April 11, 2020.
2 (1) The definition baseline remuneration in subsection 125.7(1) of the Act is replaced by the following:
- baseline remuneration
baseline remuneration, in respect of an eligible employee of an eligible entity, means the average weekly eligible remuneration, excluding any period of seven or more consecutive days for which the employee was not remunerated, paid to the eligible employee by the eligible entity during the period that
(a) begins on January 1, 2020 and ends on March 15, 2020; or
(b) if the eligible entity elects,
(i) begins on March 1, 2019 and ends on May 31, 2019, in respect of a qualifying period described in any of paragraphs (a) to (c) of the definition qualifying period,
(ii) begins on March 1, 2019 and ends on June 30, 2019, in respect of a qualifying period described in paragraph (c.1) of the definition qualifying period, unless the eligible entity elects to use the period that begins on March 1, 2019 and ends on May 31, 2019 for that qualifying period, or
(iii) begins on July 1, 2019 and ends on December 31, 2019, in respect of a qualifying period described in any of paragraphs (c.2) to (d) of the definition qualifying period. (rémunération de base)
(2) The definition eligible employee in subsection 125.7(1) of the Act is replaced by the following:
- eligible employee
eligible employee, of an eligible entity in respect of a week in a qualifying period, means an individual employed in Canada by the eligible entity in the qualifying period, other than, if the qualifying period is described in any of paragraphs (a) to (c.1) of the definition qualifying period, an individual who is without remuneration by the eligible entity in respect of 14 or more consecutive days in the qualifying period. (employé admissible)
(3) The definition current reference period in subsection 125.7(1) of the Act is amended by striking out “and” at the end of paragraph (c) and by adding the following after that paragraph:
(c.1) for the qualifying period referred to in paragraph (c.1) of the definition qualifying period, June 2020;
(c.2) for the qualifying period referred to in paragraph (c.2) of the definition qualifying period, July 2020;
(c.3) for the qualifying period referred to in paragraph (c.3) of the definition qualifying period, August 2020;
(c.4) for the qualifying period referred to in paragraph (c.4) of the definition qualifying period, September 2020;
(c.5) for the qualifying period referred to in paragraph (c.5) of the definition qualifying period, October 2020;
(c.6) for the qualifying period referred to in paragraph (c.6) of the definition qualifying period, November 2020; and
(4) Paragraphs (a) and (b) of the definition eligible entity in subsection 125.7(1) of the Act are replaced by the following:
(5) Paragraph (a) of the definition prior reference period in subsection 125.7(1) of the Act is amended by striking out “and” at the end of subparagraph (ii) and by adding the following after subparagraph (iii):
(iv) for the qualifying period referred to in paragraph (c.1) of the definition qualifying period, June 2019,
(v) for the qualifying period referred to in paragraph (c.2) of the definition qualifying period, July 2019,
(vi) for the qualifying period referred to in paragraph (c.3) of the definition qualifying period, August 2019,
(vii) for the qualifying period referred to in paragraph (c.4) of the definition qualifying period, September 2019,
(viii) for the qualifying period referred to in paragraph (c.5) of the definition qualifying period, October 2019, and
(ix) for the qualifying period referred to in paragraph (c.6) of the definition qualifying period, November 2019;
(6) Subparagraphs (b)(i) and (ii) of the definition prior reference period in subsection 125.7(1) of the Act are replaced by the following:
(i) on March 1, 2019, the eligible entity was not carrying on business or otherwise carrying on its ordinary activities and the qualifying period is referred to in any of paragraphs (a) to (c.1) of the definition qualifying period, or
(ii) the qualifying period is referred to in any of
(A) paragraphs (a) to (c.1) of the definition qualifying period and the eligible entity elects for all of the periods set out in paragraphs (a) to (c) of that definition, or
(B) paragraphs (c.2) to (d) of the definition qualifying period and the eligible entity elects for all of the periods set out in those paragraphs; and
(7) Paragraph (a) of the definition qualifying entity in subsection 125.7(1) of the Act is replaced by the following:
(a) it files an application with the Minister in respect of the qualifying period in prescribed form and manner, before February 2021;
(8) The portion of paragraph (c) of the definition qualifying entity in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(c) if the qualifying period is described in any of paragraphs (a) to (c.1) of the definition qualifying period, its qualifying revenues for the current reference period are equal to or less than the specified percentage, for the qualifying period, of
(9) Paragraph (d) of the definition qualifying entity in subsection 125.7(1) of the Act is replaced by the following:
(d) it meets either of the following conditions:
(i) it had, on March 15, 2020, a business number in respect of which it is registered with the Minister to make remittances required under section 153, or
(ii) it is the case that
(A) on March 15, 2020,
(I) it employed one or more individuals in Canada,
(II) the payroll for its employees was administered by another person or partnership (referred to in this subparagraph as the “payroll service provider”), and
(III) the payroll service provider had a business number in respect of which it is registered with the Minister to make remittances required under section 153,
(B) the payroll service provider used its business number to make the remittances referred to in subclause (A)(III) in respect of the employees of the eligible entity, and
(C) the Minister is satisfied that the conditions in clauses (A) and (B) are met. (entité admissible)
(10) The definition qualifying period in subsection 125.7(1) of the Act is amended by striking out “or” at the end of paragraph (c) and by replacing paragraph (d) with the following:
(c.1) the period that begins on June 7, 2020 and ends on July 4, 2020;
(c.2) the period that begins on July 5, 2020 and ends on August 1, 2020;
(c.3) the period that begins on August 2, 2020 and ends on August 29, 2020;
(c.4) the period that begins on August 30, 2020 and ends on September 26, 2020;
(c.5) the period that begins on September 27, 2020 and ends on October 24, 2020;
(c.6) the period that begins on October 25, 2020 and ends on November 21, 2020; or
(d) a prescribed period that ends no later than December 31, 2020. (période d’admissibilité)
(11) The definition qualifying revenue in subsection 125.7(1) of the Act is amended by adding the following after paragraph (b):
(b.1) in the case of an eligible entity prescribed in paragraph (f) of the definition eligible entity that would be described in paragraph (c) or (d) of that definition if it were not a public institution, subparagraphs (a)(i) and (ii) apply to an eligible entity that would be described in paragraph (c) of that definition and subparagraphs (b)(i) and (ii) apply to an eligible entity that would be described in paragraph (d) of that definition;
(12) Paragraph (b) of the definition institution publique in subsection 125.7(1) of the French version of the Act is replaced by the following:
b) une école, un conseil scolaire, un hôpital, une autorité sanitaire, une université publique ou un collège. (public institution)
(13) Subsection 125.7(1) of the Act is amended by adding the following in alphabetical order:
- base percentage
base percentage, of an eligible entity for a qualifying period, means
(a) for the qualifying period referred to in paragraph (c.2) of the definition qualifying period,
(b) for the qualifying period referred to in paragraph (c.3) of the definition qualifying period,
(c) for the qualifying period referred to in paragraph (c.4) of the definition qualifying period,
(d) for the qualifying period referred to in paragraph (c.5) of the definition qualifying period,
(e) for the qualifying period referred to in paragraph (c.6) of the definition qualifying period,
(f) for the qualifying period referred to in paragraph (d) of the definition qualifying period, a percentage determined by regulation in respect of the eligible entity. (pourcentage de base)
- revenue reduction percentage
revenue reduction percentage, of an eligible entity for a qualifying period, means the result (expressed as a percentage) of the formula
1 − A/B
where
- A
- is the eligible entity’s qualifying revenue for the current reference period for the qualifying period; and
- B
- is the eligible entity’s qualifying revenue for the prior reference period for the qualifying period – or, if the prior reference period is January and February 2020, the amount determined by the formula in subparagraph (c)(ii) of the definition qualifying entity – or a period prescribed by regulation in respect of the eligible entity for the qualifying period. (pourcentage de baisse de revenu)
- top-up percentage
top-up percentage, of an eligible entity for a qualifying period, means the lesser of 25% and the percentage determined by the formula
1.25 × (A − 50%)
where
- A
- is the entity’s top-up revenue reduction percentage for the qualifying period. (pourcentage compensatoire)
- top-up revenue reduction percentage
top-up revenue reduction percentage, of an eligible entity for a qualifying period, means the result (expressed as a percentage) of the formula
1 − A/B
where
- A
- is the average monthly qualifying revenue of the eligible entity for the last three calendar months that ended prior to the current reference period for the qualifying period; and
- B
- is the average monthly qualifying revenue of the eligible entity for
(14) The description of A in subsection 125.7(2) of the Act is replaced by the following:
- A
- is the total of all amounts, each of which is for an eligible employee in respect of a week in the qualifying period,
(a) if the qualifying period is described in any of paragraphs (a) to (c.1) of the definition qualifying period in subsection (1), equal to the greater of
(b) if the qualifying period is described in any of paragraphs (c.2) to (d) of the definition qualifying period in subsection (1),
(i) if the eligible employee is not on leave with pay for that week and the qualifying period is described in paragraph (c.2) or (c.3) of the definition qualifying period in subsection (1), the greater of
(ii) if the eligible employee is not on leave with pay for that week and the qualifying period is described in any of paragraphs (c.4) to (d) of the definition qualifying period in subsection (1), the amount determined by the formula
(E + F) × G
where
- E
- is the qualifying entity’s base percentage for the qualifying period,
- F
- is the qualifying entity’s top-up percentage for the qualifying period, and
- G
- is the least of
(A) the amount of eligible remuneration paid to the eligible employee by the qualifying entity in respect of that week,
(B) $1,129, and
(C) if the eligible employee does not deal at arm’s length with the qualifying entity in the qualifying period, the baseline remuneration in respect of the eligible employee determined for that week,
(iii) if the eligible employee is on leave with pay for that week and the qualifying period is described in paragraph (c.2) or (c.3) of the definition qualifying period in subsection (1),
(iv) if the eligible employee is on leave with pay for that week and the qualifying period is described in any of paragraphs (c.4) to (d) of the definition qualifying period in subsection (1), the least of
(15) The description of D in subsection 125.7(2) of the Act is replaced by the following:
- D
- is
(a) nil, if the qualifying period is described in any of paragraphs (c.2) to (d) of the definition qualifying period in subsection (1), unless
(b) in any other case, the total of all amounts, each of which is for an eligible employee in respect of a week in the qualifying period, if the eligible employee is on leave with pay for that week and the amount is
(i) an amount payable by the qualifying entity
(A) as an employer’s premium under the Employment Insurance Act, or
(B) as an employer’s contribution under the Canada Pension Plan or under a provincial pension plan as defined in section 3 of the Canada Pension Plan, or
(ii) an amount payable by the qualifying entity as an employer’s premium under the Act respecting parental insurance, CQLR, c. A-29.011.
(16) Paragraph 125.7(4)(e) of the Act is replaced by the following:
(e) an eligible entity may make an election, which must apply for all qualifying periods, to determine its qualifying revenues based on
(17) Section 125.7 of the Act is amended by adding the following after subsection (4):
Marginal note:Asset sales — conditions
(4.1) Subsection (4.2) applies to an eligible entity in respect of a qualifying period if
(a) the eligible entity acquired assets (referred to in this subsection and subsection (4.2) as the “acquired assets”) of a person or partnership (referred to in this subsection and subsection (4.2) as the “seller”) during the qualifying period or at any time before that period;
(b) immediately prior to the acquisition, the fair market value of the acquired assets constituted all or substantially all of the fair market value of the property of the seller used in the course of carrying on business;
(c) the acquired assets were used by the seller in the course of a business carried on in Canada by the seller;
(d) it is reasonable to conclude that none of the main purposes of the acquisition was to increase the amount of a deemed overpayment under subsection (2); and
(e) the eligible entity elects in respect of the qualifying period and files the election in prescribed form and manner with the Minister or, if the seller is in existence during the qualifying period, the eligible entity and the seller jointly elect in respect of that period and so file with the Minister.
Marginal note:Asset sales — application
(4.2) If this subsection applies to an eligible entity in respect of a qualifying period,
(a) the amount of the qualifying revenue of the seller for the prior reference period, or the current reference period, for the qualifying period that is reasonably attributable to the acquired assets (referred to in this subsection as the “assigned revenue”) is to be included in determining the qualifying revenue of the eligible entity for its prior reference period or current reference period, as the case may be, for the qualifying period;
(b) the assigned revenue is to be subtracted from the qualifying revenue of the seller for its prior reference period or current reference period, as the case may be, for the qualifying period;
(c) if a portion of the assigned revenue is from a person or partnership that did not deal at arm’s length with the seller and that person or partnership deals at arm’s length with the eligible entity throughout the current reference period, then that portion of the assigned revenue is deemed to not be derived from persons or partnerships not dealing at arm’s length for the purposes of paragraph (d) of the definition qualifying revenue in subsection (1); and
(d) if the seller meets either of the conditions in paragraph (d) of the definition qualifying entity in subsection (1), the eligible entity is deemed to meet that condition.
(18) Paragraph 125.7(6)(b) of the Act is replaced by the following:
(b) it is reasonable to conclude that one of the main purposes of the transaction, event, series or action in paragraph (a) is to
(i) cause an eligible entity to qualify for the deemed overpayment under subsection (2) in respect of that qualifying period, or
(ii) in respect of qualifying periods described in any of paragraphs (c.2) to (d) of the definition qualifying period in subsection (1), increase the amount of a deemed overpayment under subsection (2).
(19) Paragraph 125.7(7)(a) of the Act is replaced by the following:
(a) for the purposes of subsection (2) and subsections 152(3.4) and 160.1(1), to be a taxpayer; and
(20) Subsections 125.7(8) and (9) of the Act are replaced by the following:
Marginal note:Prescribed amounts
(8) For the purposes of the definition base percentage in subsection (1), the following may be prescribed:
Marginal note:Deeming rules — revenue decline tests
(9) If, absent the application of this subsection,
(a) an eligible entity meets the conditions in paragraph (c) of the definition qualifying entity in subsection (1) in respect of a particular qualifying period described in any of paragraphs (a) to (c) of the definition qualifying period in subsection (1), then the eligible entity is deemed to meet the conditions of that paragraph in respect of the immediately following qualifying period; or
(b) a lower revenue reduction percentage is determined in respect of an eligible entity for a particular qualifying period described in any of paragraphs (c.2) to (d) of the definition qualifying period in subsection (1) than for the immediately preceding qualifying period, then the revenue reduction percentage in respect of the eligible entity for the particular qualifying period is deemed to be equal to its revenue reduction percentage for the immediately preceding qualifying period.
(21) Subsections (1) to (20) are deemed to have come into force on April 11, 2020, except that, in respect of the periods described in paragraphs (a) and (b) of the definition qualifying period in subsection 125.7(1) of the Income Tax Act, paragraphs (a) and (b) of the definition eligible entity in subsection 125.7(1) of that Act, as enacted by subsection (4), are to be read as follows:
- Date modified: