The economic impact of the COVID-19 pandemic to both individuals and businesses has been devastating. With job losses and unemployment levels at an all-time high, no one could have predicted the level of pain and sacrifice we have all had to endure.
To answer this dire need, all levels of government have stepped up to help, offering a multitude of stimulus packages aimed at providing aid to both businesses and individuals alike – but the almost daily announcements from the various governments has only made matters more difficult to navigate. With every release of a new relief package, it would be easy to miss important information that could provide you and your business with timely help.
While the provincially run Employer Health Tax (EHT) and Workplace Safety and Insurance Board (WSIB) are not the sexiest of tax statutes, they certainly can have a significant impact on the daily operations of businesses. Provincial announcements about the relaxing of rules surrounding these taxes as a result of COVID-19 could be easily glossed over, however the Indirect Tax team at Baker Tilly Windsor has reviewed these changes and summarized them for you so you can better service your clients.
Ontario EHT
On March 27, as a part of the provincial government’s COVID-19 Action Plan, it was announced that in order to provide immediate financial relief to employers affected during this time, the government has retroactively raised the EHT exemption limit from $490,000 to $1 million for 2020. Note that this is temporary measure and the exemption will return to its current level of $490,000 on January 1, 2021.
Increasing the exemption limit to $1 million provides additional EHT relief of up to $9,945 per eligible employer. With this extra relief, eligible employers could benefit up to $19,500 in total EHT relief. The government has estimated that about 57,000 private-sector employers would pay less EHT, including about 30,000 who would not pay any EHT at all in 2020 as a result of these changes.
In addition, it was announced that beginning April 1, 2020, penalties and interest will not apply to Ontario’s businesses that miss any filing or remittance deadlines. This will continue for a period of five months, until August 31, 2020.
The provincial government estimates that this measure will help support the needs of about 100,000 Ontario businesses. It is expected to save them up to $25 million from interest and penalties waived during the grace period.
British Columbia (B.C.) EHT
The B.C. provincial government announced that employer health tax returns and final payments due for the 2019 calendar year has been extended to September 30, 2020. Furthermore, employers that declare bankruptcy or cease to have a permanent establishment in B.C. in 2020 on or before September 29, 2020 are not required to file their employer health tax returns or pay the tax until September 30, 2020.
Finally, employers that are required to make installment payments will not need to make them until after September 30, 2020. Future installment payment due dates will be determined later.
Ontario WSIB
Premier Doug Ford announced that the province is making $1.9 billion available by the WSIB to cover worker compensation premiums, allowing employers to defer their payments for up to six months or until August 31, 2020. Similar to the EHT, no interest will be accrued on outstanding premium payments and no penalties will be charged during this six-month deferral period.
How we can help
Baker Tilly Windsor now has a dedicated specialist in EHT and WSIB matters, and if you have clients that need any assistance with understanding these changes or require help in filing their returns in order to take advantage of these changes, please reach out to our new Indirect Tax senior manager, Mark Bloch.
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