Federal government releases Fall Economic Statement

On November 30, 2020, the Government of Canada released the 2020 Fall Economic Statement, Supporting Canadians and Fighting COVID-19. Key tax and related changes include the following:

• Canada Emergency Wage Subsidy (CEWS) rate increased. Due to the second wave of the pandemic, the government is proposing to increase the maximum CEWS rate to 75 per cent for the period beginning December 20, 2020, until March 13, 2021. 
• Canada Emergency Rent Subsidy (CERS) rates maintained. The government is proposing to maintain the current CERS rates for an additional three periods, from December 20, 2020 to March 13, 2021. The Lockdown Support rate will also be maintained at 25 per cent for the same period. 
• Update on form T2200 and home office expenses. It was announced that “the CRA will allow employees working from home in 2020 due to COVID-19 with modest expenses to claim up to $400, based on the amount of time working from home, without the need to track detailed expenses, and will generally not request that people provide a signed [T2200] form from their employers.”
• GST/HST on digital and other supplies made by non-residents. To level the playing field, the government proposes that foreign-based vendors selling digital products or services to consumers in Canada be required to register for, collect and remit the GST/HST on their taxable sales to Canadian consumers. Other transactions involving non-resident suppliers will also be subject to GST/HST. These changes are effective July 1, 2021.
• Digital Services Tax update. The government has proposed a tax on corporations providing digital services, effective on January 1, 2022. More details will be announced in Budget 2021. The tax would apply until such time as an acceptable multilateral approach to tax digital profits comes into effect.
• Stock option rules to move forward. The previously announced restrictions on employee stock options will move forward and will apply to options granted on or after July 1, 2021.
• Consultation on anti-avoidance rules. The government will launch consultations in the coming months on the modernization of Canada’s tax anti-avoidance rules and the General Anti-Avoidance Rule in particular.
• Canada Emergency Business Account (CEBA) deadline extended. The previously announced enhancements to CEBA will proceed and the deadline for CEBA loan applications has been extended to March 31, 2021.

Canada Child Benefit payments for young children. Benefits under the Canada Child Benefit will be increased for families with young children.