Applications for the Canada Emergency Business Account starts TODAY!

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The new Canada Emergency Business Account (CEBA) is available starting TODAY and is available through major banking institutions: TD, Scotiabank, BMO, CIBC, RBC, National Bank, HSBC and Canadian Western Bank.

The CEBA will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced until December 31, 2022. Up to $10,000 of that amount will be eligible for loan forgiveness if $30,000 is fully repaid on or before December 31, 2022.

Eligibility

Organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019

How do I apply?

Prior to applying, please make sure you have this information readily available:

  • Canada Revenue Agency Business Number (BN 15 digits)

  • 2019 T4 Summary of Remuneration Paid (T4SUM)

Apply online at the financial institution your business banks with:

Rules changed to allow more struggling business owners access to CERB, Wage Subsidy. Summer jobs program increased to 100%

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Accepting Applications starting April 6th – Canada Emergency Response Benefit (CERB)

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The sheer volume of applications for the Canada Emergency Response Benefit (CERB) will likely overwhelm the system. If you or someone you know need to apply for this benefit, we suggest you prepare TODAY before the applications begin:

  • Double check your myCRA account username and password

  • Direct Deposit is setup

    • 3 – 5 days via Direct Deposit vs 10 days via cheque in the mail

You should double check your myCRA username and password by signing in at:

CRA website

If you do not have direct deposit setup with CRA, you can set it up TODAY at:

setup direct deposit with cra

To help manage the volume, the CRA has setup specific days for you to apply based on month of birth.

If you were born in the month of:

  • January | February | March: Mondays – Best day to apply is April 6th

  • April | May | June: Tuesdays – Best day to apply is April 7th

  • July | August | September: Wednesdays – Best day to apply is April 8th

  • October | November | December: Thursdays – Best day to apply is April 9th

  • Fridays, Saturdays and Sundays are open for any birth month

Eligibility

The benefit will be available to workers:

  • Residing in Canada, who are at least 15 years old;

  • Who have stopped working because of COVID-19 and have not voluntarily quit their job or are eligible for EI regular or sickness benefits;

  • Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and

  • Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment or self-employment income.

BC Hydro customers to get 3 months bill relief | ICBC providing Autoplan payment deferral

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BC Hydro customers to get 3 months bill relief

For residential customers

If you or your spouse/partner have lost employment or have become unable to work due to COVID-19, you may be eligible for three months of bill credit based on your average consumption.

To be eligible for the COVID-19 Relief Fund for residential customers:

  • You need to be a residential account holder and have had your account prior to March 15, 2020

  • You need to meet the eligibility criteria of the B.C.Emergency Benefit for Workers

  • You or your spouse/partner have lost your job or have become unable to work (including self-employment) since March 15, 2020. Examples of being unable to work:

    • Being quarantined or sick with COVID-19

    • Taking care of a family member who is sick with COVID-19

    • Having children who require care or supervision due to school or daycare closures

  • You must be able to upload verification of eligibility, such as a copy of your application or approval for the Canada Emergency Response Benefit, Emergency Benefit for Workers, federal Employment Insurance or Record of Employment

There is a maximum of one COVID Relief Fund bill credit per household.

BC Hydro COVID-19 Relief Fund for Residential

For small businesses

If you own a small business that needed to close due to COVID-19, you may be eligible to have your business’ electricity use charges waived for up to three months.

BC Hydro COVID-19 Relief Fund for Residential

Application form to open the week of April 13

The application is not open yet, but we expect it to open the week of April 6. Once it opens, there is no rush to apply. Eligible business customers can apply any time before June 30, 2020 to have their business’ bills waived for April, May and June.

ICBC providing Autoplan payment deferral

For customers that have been financially impacted by COVID-19, ICBC will provide some relief during this challenging time. Customers on a monthly Autoplan payment plan, who are facing financial challenges due to COVID-19, can defer their payment for up to 90 days with no penalty. Payment deferral is also available for fleets.

Apply for ICBC payment plan deferral

Tax Loss Selling

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Over the last few weeks, the financial market has taken a downturn amidst fears over Coronavirus.

Understandably, you are concerned with your portfolio, it’s important to stay level-headed to avoid making financial missteps. However, staying level-headed doesn’t necessarily mean you sit there and do nothing. In fact, one consideration you can look is taking an active tax management approach.

Tax loss selling is a strategy to crystallize or realize any capital losses in your non-registered accounts so it can be used to offset any capital gains. There is no benefit to selling in your tax free savings account (TFSA) or registered retirement savings plan (RRSP).

You can apply capital losses back 3 years or carry them forward indefinitely, therefore we’ve outlined several situations that make sense for tax loss selling.

To better understand how tax-loss selling works, imagine a scenario in which someone invests $100,000, putting $50,000 in “Investment A” and $50,000 in “Investment B.”

At the end of one year, Investment A has risen by $10,000 and is now worth $60,000. Investment B has declined by $10,000 and is now worth $40,000.

Without tax-loss selling, the investor has a realized gain of $10,000 from Investment A, and has a potential tax bill of $1,500 (assuming he or she sells the shares and pays the 15% capital gains tax on the profit).

On the other hand, with tax-loss selling, selling Investment B to offset gains from Investment A. At the end of the year, instead of paying a $1,500 tax, the investor only has a potential tax bill of $0, for a potential tax savings of $1,500.

With the investor’s tax liability reduced by $1,500, that savings becomes money that can be invested back in the portfolio, used to maximize RRSP contributions, pay off debt, or spend as one pleases. 

What Situations make sense for tax loss selling?

  • If you have an investment with a considerable capital gain, review through your current investments to see if there are any investments to sell at a loss.

  • Receiving a tax refund for a previous year. Keep in mind, you can apply capital losses back 3 years, therefore if you sold a property within the last 3 years for a considerable gain and paid the tax. This year, you could sell other investments at a loss and apply them back and get some tax paid back.

  • For tax deferral, with tax losses you can apply these losses back 3 years or carry them forward indefinitely, therefore you may want to trigger a loss today because if you are planning to sell that property in the next year or so, it may rebound and therefore you will lose the chance to offset the gains.

  • Lastly, you may have an investment in your portfolio that’s a dud. It might be time to move on and put your money into a different investment so that you can apply the loss in the future.

Tax Loss Selling is Complicated

There are specific conditions required by CRA that must be met in order for this strategy to work such as making sure your loss is not declared a “superficial loss” (these rules are very restrictive). A superficial loss is when you sell and trigger a capital loss, you cannot deduct the loss if you or an affiliate purchase an identical security within 30 days before or after your settlement date.

Another condition is that the sale of assets is prior to the year-end deadline (this varies by calendar year). You also need to make sure you have accurate information on the adjusted cost base (ACB) of your investment. When you file your taxes, any losses must be first used to offset capital gains in the current tax year, then any remaining losses can be carried back.

Before engaging in tax loss selling, you should contact us directly so we can make the strategy works for you.

Do I Qualify for the Canada Emergency Response Benefit & EI?

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To help Canadians through this difficult time, the Federal Government created the Canada Emergency Response Benefit (CERB) and made changes to the Employment Insurance Program (EI). For those whose employment has affected by the Coronavirus, we have created a chart to help you figure out which program you qualify for and provide links to apply for each program.

The Federal Government has already made numerous changes to these programs so we will be updating this document whenever a change to the program is made.

Stay home and stay safe.

Help for Small/Medium Businesses & Entrepreneurs – 75% wage subsidy, $40,000 interest-free loan & more

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March 27, 2019 – Prime Minister Justin Trudeau announced programs and measures focused on helping Small & Medium Sized Businesses and Entrepreneurs cope with the economic consequences caused by the COVID-19 pandemic.

“With these new measures, our hope is that employers being pushed to laying off people due to COVID-19 will think again,” Trudeau said. “And for those of you who have already had to lay off workers, we hope you will re-hire them.”

Wage Subsidy increased to 75%

The Prime Minister has been under pressure from the small business community to boost the wage subsidy beyond the 10% initially announced to help keep people employed. Today, Mr. Trudeau announced the government will increase the wage subsidy from 10% to 75% to help keep employees on the payroll. This increase will be backdated to Sunday, March 15th.

“It is clear we have to do more, much more so we are bringing that percentage up to 75 per cent for qualifying businesses”

– Prime Minister Justin Trudeau

Canada Emergency Business Account (CEBA)

The CEBA will allow banks to offer $40,000 loans that will be interest-free for the 1st year which will be guaranteed by the government. If you meet certain conditions, $10,000 of the loan can be forgivable.

“To help you bridge to better times, we are launching the Canada Emergency Business Account. With this new measure banks will soon offer $40,000 which will be guaranteed by the government”

Defer GST, HST, Duty

The government will defer GST & HST payments, as well as duty and taxes owed on imports until June 2020.

“This is the equivalent of giving $30-billion of interest free loans to businesses”

Bank of Canada Rate Cut

Bank of Canada slashed its key overnight interest rate to 0.25%.

Full details and qualification requirements will be available on Monday.

Why provide an employee benefits plan?

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Business owners are increasingly recognizing the key importance of implementing employee benefit plans in their organization and this is an area that has grown considerably in recent decades. Employee benefits comprise all of the additional things that you offer to your employees on top of their regular salary, which could include pension contributions, health cover / insurance policies, training and education programs etc. Employees are more and more interested in the total benefits package that a potential employer can offer them, rather than just being focused on a binary salary figure and recognizing and understanding this cultural shift in the modern working world is crucial to maintain your ability to recruit and retain the right talent for your business.

Many employees value the benefits that their employer offers, considering them an integral part of their take home pay, none more so than health cover. This benefit can provide financial and emotional security to your employees and their families, without the need for them to complete any health requirements to be on the plan. They are likely to benefit from a preferable level of cover and the plan may even provide them with insurance products such as long-term disability cover, which can be harder to gain outside of a group plan. What’s more, group plans often offer out-of-country emergency healthcare for employees which has the potential to save them money on personal travel insurance products.

Not only do these benefits provide a sense of security to your employees, they can also help them to feel valued as part of your organization, which may in turn foster higher morale and increased motivation within their roles. It is therefore worthwhile for business owners to encourage their teams to recognize the fact that the benefits package that you offer should be considered as an integral part of their take home pay, alongside their actual salary.

Talk to us, we can help.

Accessing Corporate Earnings

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One of the financial planning issues that business owners face is how to access their corporate earnings in a tax efficient way.

There are 5 standard methods:

  • Salary

  • Dividend

  • Shareholder Loans

  • Transfer Personal Assets

  • Income Splitting

There are also unique ways utilizing life insurance and critical illness insurance to access your retained earnings. Please contact us to learn how we can get more money in your pocket than in the government’s.