Canada Revenue Agency: 2 Big COVID-19 Tax Changes to Be Aware of

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The Canada Revenue Agency has joined the government’s effort to combat the effects of COVID-19 on the economy. The agency is helping launch the Canada Emergency Response Benefit (CERB) for those who are out of work due to to pandemic. The agency has also increased existing benefits to help citizens in steering through this challenging financial time.

The CRA has also announced tax extensions that will interest investors particularly. Let’s look at the tax reliefs rolled out in response to COVID-19.

You have until June 1 to file taxes

If you haven’t filed your taxes yet, you don’t have to worry about penalties, because now you have one extra month to file without getting hit by a fine. If you’re self-employed, you still have until June 15 to file your taxes.

You have until September 1 to pay taxes

The deadline for tax payment has also been deferred to September 1, and it is applied across the board. You can benefit from this tax payment extension whatever the source of your income.

A TFSA investor isn’t affected by these new CRA rules as long as they are adhering to the contribution limits.

It’s a tricky time for a TFSA investor to pick stocks. Right now, the best choices for stocks are those that will likely be around in 30 years. Case in point: Enbridge (TSX:ENB)(NYSE:ENB). The ongoing oil price war, coupled with the coronavirus pandemic, has hit Enbridge’s operations badly. Since mid-February, Enbridge’s stock has been down by over 30%.

Enbridge operates a crude oil and natural gas supply chain in North America with its pipeline network and cargo services. Lying at the midstream of the oil landscape makes Enbridge less sensitive to fluctuating oil prices than an oil producer.

This is the primary reason why Enbridge survived the 2008 recession as well as the 2014 crude price shock. However, we can’t compare the ongoing crisis with the past ones. For starters, oil transport volume has also taken a hit this time due to the massive drop in demand at the downstream caused by lockdowns and travel restrictions.

Moreover, if the oil price war between Saudi Arabia and Russia stretches out for long, it will hit the Canadian high-cost oil projects and affect Enbridge’s balance sheet. We have seen it before with the way entities struggle in generating cash flow despite having an investment-grade status, and Enbridge is no exception.

A bet on oil price war

The future of Enbridge greatly depends on how the ongoing oil price pans out. If Saudi Arabia is determined to keep oil prices low until other countries start rolling back high-cost oil projects, it may turn out badly for Enbridge. If you are going to add Enbridge to your TFSA portfolio, it might be better if you complement it with any other low-cost/low-risk stock.

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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.