Highlights of the 2020 Federal Fall Economic Statement | Additional $20,000 CEBA loan available now

On November 30, Finance Minister Chrystia Freeland provided the government’s fall economic update. The fall economic update provided information on the government’s strategy both for dealing with the COVID-19 pandemic and its plan to help shape the recovery. We’ve summarized the highlights for you.

Corporate Tax Changes

Information on several subsidy programs was included in the update. These changes apply from December 20, 2020 to March 13, 2021.

  • The government has provided an increase in the Canada Emergency Wage Subsidy (CEWS) to a maximum of 75% of eligible wages.

  • If you are eligible for the Canada Emergency Rent Subsidy (eligibility is based on your revenue decline), you can claim up to 65% of qualified expenses.

  • The Lockdown Support Subsidy has also been extended – if you are eligible, you can receive a 25% subsidy on eligible expenses.

Also, there were two other significant corporate tax changes:

  • Starting January 1, 2022, the government plans to tax international corporations that provide digital services in Canada if no international consensus on appropriate taxation has been reached.

  • The tax deferral on eligible shares paid by a qualifying agricultural cooperative to its members has been extended to 2026.

Personal Tax Changes

The following personal tax changes were included in the update:

  • The update confirmed the government’s plan to impose a $200,000 limit (based on fair market value) on taxing employee stock options granted after June 2021 at a preferential rate. Canadian-controlled private corporations (CCPCs) are not subject to these rules.

  • If you started working from home due to COVID-19, you could claim up to $400 in expenses.

  • The Canada Child Benefit (CCB) has temporarily been increased to include four additional payments. Depending on your income, you could receive up to $1200.

  • Additional modifications were proposed to how the “assistance holdback” amount is calculated for Registered Disability Savings Plans (RDSP). The goal of these modifications is to help RDSP beneficiaries who become ineligible for the Disability Tax Credit after 50 years of age.

Indirect Tax Changes

GST/HST changes impacting digital platforms were included in the update. They will be applicable as of July 1, 2021:

  • Foreign-based companies that sell digital products or services in Canada must collect and remit GST or HST on their taxable sales. Also, foreign vendors or digital platform operators with goods for sale via Canadian fulfillment warehouses must collect and remit GST/HST.

  • Short-term rental accommodation booked via a digital platform must charge GST/HST on their booking. The GST/HST rate will be based on the province or territory where the short-term accommodation is located.

And some good news on a GST/HST removal! As of December 6, and until further notice, the government will not charge GST/HST on eligible face masks and face shields.

The Takeaway

A lot of changes came out of the fall update – and you may be feeling overwhelmed. But help is at hand!

Contact us to learn more about how these changes could impact your personal and business finances.


Canada Emergency Business Account (CEBA) $20,000 expansion available now

The Government of Canada website has been updated with the new CEBA requirements and deadlines:

  • As of December 4, 2020, CEBA loans for eligible businesses will increase from $40,000 to $60,000.

  • Applicants who have received the $40,000 CEBA loan may apply for the $20,000 expansion, which provides eligible businesses with an additional $20,000 in financing.

  • All applicants have until March 31, 2021, to apply for $60,000 CEBA loan or the $20,000 expansion.

Apply online at the financial institution your business banks with:

To get the full details:

Applications for Canada Recovery Benefit now open!

The Canada Recovery Benefit (CRB) is now open for applications.

As described on the Canada.ca website, the CRB gives income support to employed and self-employed individuals who are directly affected by COVID-19 and are not entitled to Employment Insurance (EI) benefits. The CRB is administered by the Canada Revenue Agency (CRA).

This program replaces the Canada Emergency Response Benefit (CERB) and, if eligible, provides $1,000 ($900 after taxes withheld) for a 2-week period.

If your situation continues past 2 weeks, you will need to apply again. You may apply up to a total of 13 eligibility periods (26 weeks) between September 27, 2020 and September 25, 2021.

Eligibility

To be eligible for the CRB, you must meet all the following conditions for the 2-week period you are applying for:

  • During the period you’re applying for:

    • you were not working for reasons related to COVID-19 OR

    • you had a 50% reduction in your average weekly income compared to the previous year due to COVID-19

  • You did not apply for or receive any of the following:

    • Canada Recovery Sickness Benefit (CRSB)

    • Canada Recovery Caregiving Benefit (CRCB)

    • short-term disability benefits

    • workers’ compensation benefits

    • Employment Insurance (EI) benefits

    • Québec Parental Insurance Plan (QPIP) benefits

  • You were not eligible for EI benefits

  • You reside in Canada

  • You were present in Canada

  • You are at least 15 years old

  • You have a valid Social Insurance Number (SIN)

  • You earned at least $5,000 in 2019, 2020, or in the 12 months before the date you apply from any of the following sources:

    • employment income (total or gross pay)

    • net self-employment income (after deducting expenses)

    • maternity and parental benefits from EI or similar QPIP benefits

  • You have not quit your job or reduced your hours voluntarily on or after September 27, 2020, unless it was reasonable to do so

  • You were seeking work during the period, either as an employee or in self-employment

  • You have not turned down reasonable work during the 2-week period you’re applying for

You need all of the above to be eligible for the CRB.

CERB Extended | Business Owners who did not qualify previously – expanded CEBA starts June 19th

CERB Extended 2 more months

Great news for Canadians out of work and looking for work. The CERB will be extended another 8 weeks for a total of up to 24 weeks.

As the country begins to restart the economy, the Federal government will be making changes to the program to encourage Canadians receiving the benefit to get people back on the job. From Prime Minister Justin Trudeau’s website:

“The Government of Canada introduced the CERB to immediately help workers affected by the COVID-19 pandemic, so they could continue to put food on the table and pay their bills during this challenging time. As we begin to restart the economy and get people back on the job, Canadians receiving the benefit should be actively seeking work opportunities or planning to return to work, provided they are able and it is reasonable to do so.

That is why the government will also make changes to the CERB attestation, which will encourage Canadians receiving the benefit to find employment and consult Job Bank, Canada’s national employment service that offers tools to help with job searches.”

More small businesses can apply for CEBA $40,000 no-interest loans

Applications for the expanded Canada Emergency Business Account (CEBA) will be accepted as of Friday, June 19th, 2020. Small businesses that are:

“… owner-operated small businesses that had been ineligible for the program due to their lack of payroll, sole proprietors receiving business income directly, as well as family-owned corporations remunerating in the form of dividends rather than payroll will become eligible this week.”

Apply online at the financial institution your business banks with:

There are restrictions on the funds can be used. From their website https://ceba-cuec.ca/:

“The funds from this loan shall only be used by the Borrower to pay non-deferrable operating expenses of the Borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.”

$1,000 BC Emergency Benefit for Workers applications start May 1st

On May 1st, the BC Government will start taking applications online for the BC Emergency Benefit for Workers. Telephone applications will start on May 4th but it is strongly recommended that you apply online as they anticipate high call volumes. This benefit provides a one time payment of $1,000 to residents of BC whose ability to work has been affected due to COVID-19.

Eligibility

The BC government website states:

“To be eligible for the emergency benefit, you must:

  • Have been a resident of British Columbia on March 15, 2020

  • Meet the eligibility requirements for the Canada Emergency Response Benefit (CERB)

  • Have been approved for the Canada Emergency Response Benefit, even if you haven’t received a federal benefit payment yet

  • Be at least 15 years old on the date you apply

  • Have filed, or agree to file, a 2019 B.C. income tax return

  • Not be receiving provincial income assistance or disability assistance

If you receive a payment and we later determine that you are not eligible for it, you may be required to repay it with penalties and interest.”

What you need to apply

You will need the following information:

  • Social Insurance Number (SIN)

  • Individual Tax Number (ITN) OR

  • Temporary Tax Number (TTN)

As well as your direct deposit information for your bank.

Expanded eligibility for Canada Emergency Response Benefit (CERB) & Boosted wages for Essential Workers

From his speech this morning (April 15th), Prime Minister Justin Trudeau announced:

“Today, we’re announcing more help for more Canadians. This includes topping up the pay of essential workers. At the same time, we’ll also be expanding the Canada Emergency Response Benefit to reach people who are earning some income as well as seasonal workers who are facing no jobs and for those who have run out of EI recently. Expanding the CERB to include people who earn up to $1,000 per month. Maybe you’re a volunteer firefighter, or a contractor who can pickup some shifts, or you have a part-time job in a grocery store.”

Eligibility for CERB

On eligibility for CERB, the Prime Minister stated:

“If you earn $1,000 or less a month, you’ll now be able to apply for CERB.

If you were expecting a seasonal job that isn’t coming because of COVID-19, you’ll now be able to apply.

If you’ve run out of EI since January 1st, you can now apply for CERB as well

And for others who still need help, including post secondary students and businesses worried about commercial rent, we’ll have more to say to you very soon.”

Wage Boost for Essential Workers

On topping up wages for Essential Workers, PM Justin Trudeau said:

“Our government will work with the provinces and territories to boost wages for essential workers who are making under $2,500 a month, like those in our long-term care facilities”

The government website is being updated with the new qualifications, for full details and to apply click below: