Government economic response to COVID-19

To keep you informed of recent developments in our federal and provincial/territorial governments’ economic response to COVID-19, we will be providing you updates of key government announcements that may impact you or your business.

April 20, 2021 update

Our updates are provided on Tuesdays and Thursdays, and on days when there are significant announcements. Information is accurate as at 3:00 p.m. EDT. Information may be affected by subsequent announcements.

Links to government announcements follow at the end of the update.

Tax updates:

  • Canada - 2021-22 budget released: The federal government released its budget for 2021‑22, forecasting a deficit of $154.7 billion for 2021‑22, down from the $354 billion deficit for 2020‑21, and gradually declining to a deficit of $30.7 billion in 2025‑26. The budget: (i) extends existing COVID‑19 emergency business supports to September 25, 2021 and introduces a new Canada Recovery Hiring Program; (ii) provides immediate expensing of up to $1.5 million per taxation year of capital property acquisitions by Canadian‑controlled private corporations (CCPCs); (iii) provides further details of a proposed digital services tax, to be effective January 1, 2022; (iv) reduces corporate tax rates on eligible zero‑emission technology manufacturing and processing income; (v) limits the deductibility of interest by corporations, trusts and partnerships to a percentage of tax‑basis EBITDA; (vi) enhances the Canada Workers Benefit; (vii) amends and clarifies proposals on the application of Goods and services tax/Harmonized sales tax (GST/HST) to e‑commerce; and (viii) proposes a new tax on the unproductive use of Canadian housing by foreign non‑resident owners. For more information, see our 2021 Federal Budget analysis. Other budget measures include: (i) introducing a Canada‑wide early‑learning and childcare plan; (ii) establishing a $15/hr federal minimum wage; (iii) extending the Canada Recovery Benefit by an additional 12 weeks (4 weeks at $500/week and 8 weeks at $300/week), to a maximum of 50 weeks; (iv) extending the Canada Recovery Caregiving Benefit by an additional 4 weeks (at $500/week), to a maximum of 42 weeks; and (v) enhancing Employment Insurance sickness benefits from 15 to 26 weeks.

Other updates:

  • British Columbia - Paid leave for workers to get COVID-19 vaccine: The provincial government has introduced amendments to the Employment Standards Act that, if passed, will provide workers with up to three hours of paid leave to get each dose of their COVID‑19 vaccine.

  • Manitoba - Dine-in Restaurant Relief Program extended: The Manitoba government announced $2 million of additional funding for the Dine‑in Restaurant Relief Program. The program is also being expanded to allow rural restaurants and catering businesses without delivery service to benefit from the program.

  • Manitoba - Additional public health restrictions: Effective April 20, 2021: (i) all households may have a maximum of two visitors; (ii) all outdoor gatherings are limited to 10 people; and (iii) religious gatherings are limited to the lesser of 25% capacity or 50 people, except weddings and funerals which are limited to 10 people. Effective April 21, 2021, retail stores will be limited to the lesser of one-third capacity or 333 people and malls will be limited to 33% capacity. These measures will be in effect until May 12, 2021.

  • Manitoba - Essential Worker Cross-Border Vaccination Initiative (EWCBVI): the Manitoba government announced a joint initiative with the North Dakota government - the EWCBVI - where North Dakota will administer COVID‑19 vaccinations to Manitoba-based truck drivers transporting goods to and from the United States.

  • Nova Scotia - State of emergency extended: The state of emergency in Nova Scotia is extended until May 2, 2021.

  • Nova Scotia - Increased travel restrictions: Effective April 22, 2021, non-essential travel into Nova Scotia by residents of any province or territory other than Nova Scotia, Prince Edward Island, or Newfoundland and Labrador is prohibited, unless the travel is essential. Individuals returning from a work rotation outside of Nova Scotia must self-isolate until a negative COVID‑19 test result is received.

  • Ontario - Additional public health restrictions: The provincial state of emergency and stay-at-home order have both been extended for an additional two weeks. Effective April 17, 2021: (i) non‑essential travel into Ontario from Quebec or Manitoba is prohibited; (ii) all outdoor gatherings (except of members of the same household) are prohibited; (iii) all non‑essential construction workplaces must close; (iv) capacity in stores that primarily sell food and pharmacies is reduced to 25%; and (v) religious gatherings, including weddings and funerals, are limited to 10 people indoors or outdoors.

  • Prince Edward Island - Increased travel restrictions: Effective April 19, 2021 until at least May 17, 2021: (i) everyone arriving in PEI from outside of Atlantic Canada must self-isolate for 14 days and comply with COVID‑19 testing requirements; (ii) individuals entering PEI for work require negative COVID‑19 tests before departing and upon arriving; and (iii) individuals, including truck drivers, returning from work outside of Atlantic Canada must self-isolate until a negative COVID‑19 test result is received.

  • Quebec - Support for livestock farmers: The federal and Quebec governments jointly announced $21.8 million in funding to support the additional costs incurred by livestock producers due to capacity shortages at slaughterhouses.

  • Quebec - Travel restrictions: Effective April 19, 2021, travel into Quebec from Ontario is prohibited, except for essential work, transport of goods, transiting through the province, or travelling to a residence in Quebec.

Links to government announcements:

Contact us

Dean Landry

National Tax Leader, Toronto, PwC Canada

+1 416 815 5090

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Shawn Reain

Partner, Canadian Markets Leader, Tax, Calgary, PwC Canada

+1 403 509 6373

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Kent Smith

Partner, Ottawa, PwC Canada

+1 613 755 8742

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Éric Labelle, LL.L.

Greater Montreal Tax Leader, Montreal, PwC Canada

+1 514 205 5063

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Julien Lassonde

Partner, PwC Associates, National Incentives Leader, Montreal, PwC Canada

+1 418 997 4019

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Liam Fitzgerald

Competency, Innovation & Legal Tax Leader, Toronto, PwC Canada

+1 416 869 2601

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