Alberta’s provincial government has recently announced several support measures to mitigate some of the damaging effects being felt locally as a result of the global COVID-19 pandemic. Recognizing the extreme strain that businesses are under, and the uncertainty being faced by the local economy, the provincial government has deferred several payments as a way of increasing short-term cash flow.
Corporate tax payments
All provincial corporate tax balance and instalment payments will be deferred from March 19 to August 31, 2020.
This is in line with changes made at the federal level, and, while no change to corporate tax filing deadlines have been announced, by deferring payment requirements many corporations with December 31 fiscal year-ends will be able to defer any taxes payable on their December 31, 2019 corporate tax filing to September. The provincial government has also indicated that they will waive any penalties and interest that would otherwise be payable in respect of these amounts.
Property tax payments
Education property tax rates will now be frozen at 2019 amounts, reversing the 3.4% increase announced in February’s 2020 provincial budget. Furthermore, businesses will also be able to defer their non-residential education property tax amounts for 6 months, until October 2020. It should be noted that this is a deferral—which would need to be repaid in future tax years—with repayment plans currently under development.
Recognizing that many businesses may not be property owners, commercial landlords are being encouraged to pass this savings on to their tenants through reduced or deferred payments. We would therefore encourage business owners to reach out to their landlords to discuss their lease agreements and any possible reduction in payments.
Widespread relief of WCB premiums has also been announced for Alberta businesses. All 2020 premiums will now be deferred until 2021, with additional support being provided to small and medium-sized businesses.
Businesses with $10 million or less in insurable earnings for 2020 will be classified as small and medium-sized private sector employers and will be eligible for a 50% reduction in their 2020 premiums when they become payable in 2021.The remaining 50% will be covered by the provincial government.
Any large businesses with insurable earnings over $10 million will be required to repay the deferred premiums in 2021.
Any premiums that have already been paid by businesses will be refunded to them automatically; there is no need to call and request either the deferral or the refund. It is also worth noting that interest will not be incurred on any deferred amounts and that neither future premium rates nor employee coverage will be affected.
Small commercial customers, as well as residential and farm customers, may also be eligible for a 90-day deferral of certain utility payments. This deferral is targeted towards those experiencing financial hardship as a result of COVID-19, but there is no indication that any specific requirements (i.e. self-isolation) need to have been met in order to access the deferral. Further information can be obtained through your natural gas or electricity provider.
Provincial credit unions, as well as the Alberta Treasury Branch will also be providing support to business owners.
These announcements come after the federal government announced last week that it would be working with Canada’s banks to provide businesses and individuals with deferral of mortgage payments for up to 6 months, as well as by providing $10 billion in addition financing through Export Development Canada and the Business Development Bank of Canada, with a large portion of funding being directed towards small and medium-sized businesses.
Business members of credit unions are being encouraged to contact their credit union directly to work out a personalized plan, while ATB Financial’s small business customers can apply for a payment deferral on loans and lines of credit for up to 6 months, as well as obtain access to additional working capital. Further support may also be provided on an as-needed basis so we would encourage business owners to speak with their banks to determine what support may be available based on their personal situation.
Additional support for individuals
Government support is also being provided to employees who are required to self-isolate, or who are caring for a dependant who is required to self-isolate. This support will come in the form of a one-time payment of $1,146 and is intended to bridge the gap until federal emergency payments begin in April. It is expected that Albertans will be able to apply for this support later this week through alberta.ca.
Albertans with provincial student loans will also see a 6-month pause to their loan repayments beginning March 30, 2020. The pause will be automatic, and interest will not accrue during the 6-month period.
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We understand that you want to be agile and responsive as the situation unfolds. Having access to experts, insights and accurate information as quickly as possible is critical—but your resources may be stretched at this time. We’re here to support you as you navigate through the impacts of coronavirus on your business and your investments.