Deferring GST/HST Remittances in Response to COVID-19

March 21, 2020

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David Dodge, Serge Dupont and Michael Horgan say that as Canada's federal government responds to the COVID-19 pandemic, the next target — one that would help businesses of all sizes across the country — should be GST/HST remittances. They appear in a column written by Bill Robson, President and CEO of the C.D. Howe Institute. The economic boost from deferring GST/HST remittances would be big, widespread, and immediate. Bill's column says:

The federal government should let businesses defer net monthly and quarterly GST/HST remittances, starting with payments owed on or after March 31. No interest would accrue until the new due dates for the payments, whenever they might be. As things stand, businesses have to remit GST/HST when they invoice their customers. Even in good times, it’s not unusual that they wait weeks for payment. Under current circumstances they may not receive payment for months. Relief on remittances would be a lifeline for many of them.

The immediate positive impact would be huge. Suppose the deferral lasted until the end of 2020, and that the economic impact of COVID-19 — mitigated by the deferrals — reduced the GST and federal portion of the HST by 10 per cent year-over-year in the second quarter of 2020 and by five per cent year-over-year in each of the third and fourth quarters. Total remittances might be some $30 billion lower. That is cash that businesses would still have in hand to pay their employees and their bills. The government could even turbo-charge the measure by refunding remittances businesses made in the first quarter — a further $10 billion.

Bill Robson's full column is available here.

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