Federal Budget 2023: Other Measures

Small Business Credit Card Fees

Budget 2023 announced that commitments had been obtained from Visa and Mastercard to lower fees for small businesses. More than 90% of credit card-accepting businesses are expected to see their fees reduced by up to 27%.

Automatic Tax Filing for Low-income Canadians

Budget 2023 announced that the number of Canadians eligible for CRA’s automatic File My Return service will be increased to 2 million by 2025, almost tripling the number of currently eligible Canadians. In 2022, 53,000 returns were filed using this service. In addition, a new pilot project will be implemented to assist vulnerable Canadians in applying for benefits even if they do not file tax returns.

Student Benefits

Budget 2023 proposes increasing Canada student grants by 40%, raising the interest-free Canada student loan limit from $210 to $300 per study week, and waiving the requirement for mature students (aged 22 or older) to undergo credit screening in order to qualify.

Dental Care for Canadians

The Canadian dental care plan would provide coverage for all uninsured Canadians with an annual family income of less than $90,000 (the Canada dental benefit only provided benefits for children under 12) by the end of 2023. The plan will be administered by Health Canada with support from a third-party benefits administrator. Benefits are reduced for families with income between $70,000 and $90,000.

Protecting Federally Regulated Gig Workers

Budget 2023 proposes to amend the Canada Labour Code to strengthen prohibitions against employee misclassification for federally regulated gig workers such that they will receive protections and benefits including EI and CPP.

Ensuring the Integrity of Emergency COVID-19 Benefits

Budget 2023 proposes to provide $53.8 million in 2022-23 to Employment and Social Development Canada to support integrity activities relating to overpayments of COVID-19 emergency income supports.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein. Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

JULY 27, 2020 UPDATE: Canada Emergency Wage Subsidy (CEWS)

On July 27, The Federal Government passed Bill C-20, which provides significant changes to the CEWS for claim periods beginning July 5, 2020. The changes are aimed to support more businesses that have been negatively impacted by the COVID-19 pandemic.  

The extended CEWS introduces changes to the base subsidy and provides for a top-up subsidy for certain employers.

CEWS: Base Subsidy

The updated CEWS applies a specified rate based on eligible remuneration of up to a maximum of $1,129 per week for each employee. The base rate will depend on the amount of the revenue drop.

As illustrated in Table 1, if an eligible employer experiences a revenue decline of more than 50%, the employer would be eligible to apply a maximum subsidy rate of 60% in Periods 5 and 6. This rate would gradually be reduced to 20% by claim Period 9.

Employers who experience a revenue drop of less than 50% will apply a multiplier of 1.2 in Periods 5 and 6. For claim Periods 7-9, multipliers of 1.0, 0.8, and 0.4, respectively, will be applied to the percentage of the revenue drop to determine the base CEWS rate.

This is outlined in Table 1 and will result in a reduced subsidy rate. It should be noted that the objective of the new rate structure is to allow all eligible employers with a revenue drop to qualify. 

TABLE 1: Rate Structure of The Base CEWS

  • In Periods 5 and 6, employers who are better off in the CEWS design of Periods 1-4 will be eligible for a 75% wage subsidy if they have a revenue drop of 30% or more. Please refer to the Safe Harbour rules for Period 5 and 6 below.

As was done for Periods 1-4, eligible employers will be required to assess their revenues for each relevant reference period as it relates to the specified claim period. For example, for claim Period 5, an employer will compare its July 2020 revenues to its July 2019 revenues.

Also, employers will have the option to assess the revenue drop of the preceding month compared to the same month in the prior year. Eligible employers can then choose the higher the revenue drop of the two reference periods. For example, for claim Period 5, ABC Co. experienced a revenue drop of 30% in July 2020 as compared to July 2019. Furthermore, the business realized a revenue drop of 52% in June 2020 as compared to its revenues in June 2019.

Therefore, ABC Co. will have the option to choose 52% as its revenue drop and qualify for the maximum subsidy rate of 60%.

An alternative approach is also available, whereby the employer can assess the revenue drop of the relevant month or the preceding month and compare that to the average monthly revenues of January and February 2020. The employer can then choose the higher of the decrease.

Please refer to Table 2 for the reference periods as they pertain to their specified claim periods.

TABLE 2: Reference Periods For The Base CEWS

CEWS Top-Up Subsidy

For employers who have experienced a revenue drop of more than 50% on a 3-month average, the updated CEWS provides a “top-up” subsidy up to an additional 25%. The calculation of the top-up subsidy is outlined in Table 3.

Table 3: Calculation of The Top-Up Subsidy

To qualify for the top-up subsidy, eligible employers will be required to assess the average decline in revenues of the preceding 3 months and compare the results to the same 3 months of the prior year.

An alternative approach is available, where the eligible employer can compare the average decline in revenues of the preceding 3 months to the average monthly revenues of January and February 2020. The reference periods for the top-up CEWS is further outlined in Table 4 below.

Safe Harbour Rules for Periods 5 & 6

The updated CEWS includes “safe harbour” rules for claim Periods 5 and 6. The rules allow for eligible employers entitled to the 75% subsidy, previous to the update, to use the rules that were in place for Periods 1-4 (ie. the “old rules”).  

In other words, for claim Periods 5 and 6, employers with a revenue drop of 30% or more can receive the higher of the “old rules” and the “new rules” outlined above.

Furloughed Employee

There is to be no changes in claim Periods 5 and 6 as it pertains to furloughed employees. The subsidy would be the greater of 75% of the amount of remuneration paid to a maximum of $847 per week or 75% of the pre-crisis weekly remuneration to a maximum benefit of $847 per week, whichever is less.

For claim Period 7-9, the CEWS for furloughed employees would be adjusted to align with the benefits provided through the Canada Emergency Response Benefit (CERB) and/or Employment Insurance (EI).

Other Changes

Eligible Employees

In claim Periods 1 – 4, employees who were without pay for 14 or more consecutive days were excluded from the calculation of the CEWS. However, effective July 5, 2020, the eligibility criteria will no longer exclude these employees in an eligibility period.

For more information regarding the definition of an eligible employee, click here.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Coping With Stress - Avisar Charter Professionals

6 Simple Ways To Cope With “New Normal” Stress

We can all agree that adapting to the changes brought by the coronavirus has been stressful for all of us. But what does it mean when we acknowledge that we are “stressed out”? And what can we do to cope as we continue to navigate these unusual times?

For almost a year now, we’ve had to rearrange our schedules, homeschool our children, isolate from our loved ones and deal with empty store shelves. The most stressful part is likely living with the fear that our loved ones could be harmed by this virus.

Of all the things the pandemic has taught us, we’ve learned that what is most important to us as human beings is our health and well-being. And while we’ve been adjusting to keep ourselves and our families safe, we’ve had to endure an incredible amount of stress along the way. How does that affect our health?

Let’s paint a picture … imagine you’re camping, and you encounter a grizzly bear. Your family is in the tent, but you’re outside making a fire before the sun goes down. You lock eyes with that grizzly bear, and your body immediately releases the stress hormones adrenaline and noradrenaline, and the more critical measure of stress, cortisol – lots of it. Your heart races, your breathing quickens, your pupils dilate, and you focus on nothing else but the situation at hand.

Your automatic response will be one of two things: Stand your ground and scare off the grizzly, or slowly back away and get the heck out of there with your family. This response is what is commonly known as the “fight or flight” response. Now, that’s an extreme example, but that same physiological response is triggered on a lesser scale when you encounter daily stressors. When that becomes chronic, your body is constantly in fight-or-flight mode, which can lead to a slew of health problems down the line. There is a reason stress is called “the silent killer.”

How Stress Manifests Day-to-Day

You might be thinking, “I can handle my life. I don’t feel stressed out.” The problem with chronic stress is that it manifests in small ways that we become so used to, that we don’t even realize it’s happening! Here are some ways you can tell you’re battling chronic stress:

ENERGY

  • You wake up feeling unrefreshed.
  • You have difficulties getting out of bed in the morning (even after 8-plus hours of sleep).
  • You have difficulties falling and/or staying asleep.
  • You find yourself unable to keep up with work the way you used to.
  • You are experiencing “brain fog.”
  • Exercise makes you more tired.

NUTRITION AND DIGESTION

  • You often crave salty or sugary foods.
  • You have difficulty digesting your food.
  • You often have heartburn or reflux.
  • You are constipated and/or have loose stools.

PHYSICAL AND MENTAL HEALTH

  • You are gaining or losing weight (without trying).
  • You are less interested in sex.
  • You often get sick or acquire infections.
  • You are becoming more irritable and impatient.
  • You are starting to experience more physical pain.
  • You are experiencing low moods, making it difficult to find joy in life.
  • You are having panic attacks.

If any of these seem familiar to you, you could be dealing with symptoms of chronic stress and maybe even burnout. The response I talked about earlier – the release of adrenaline, nor-adrenaline and cortisol – is an adaptive response that helps us survive.

The problem is, when we are chronically stimulating the release of cortisol, it affects how our bodies function by influencing changes in our hormones, the function of our gut (think: gut-brain connection) and changes in the neurotransmitters in our gut and brain. This negatively affects our mood, our energy, our sleep quality, our blood sugar and blood pressure, our digestion and so much more.

What Can You Do To Ease Your Stress?

Taking a step back from daily duties to allow yourself to heal would work wonders; but, as a professional, I know that’s nearly impossible. Gathering with loved ones, going out for a social outing, or travelling are usually great stress relievers for people, but these, too, are near-impossible in the world’s current climate.

But there are some measures you can take that are proven to decrease stress and help get you back as much normalcy as possible:

  • Meditate! If you haven’t yet tried it, or are skeptical, it can be difficult to get into. However, studies have proven that meditation can decrease cortisol levels. As a stress-relief method, it’s both effective and free!
  • Try a cortisol-managing supplement. Just remember to always first get advice from a naturopathic doctor (ND) on which supplement is right for you. Each supplement marketed for stress will affect your cortisol levels in different ways.
  • Decrease your caffeine intake. I know, I’m sorry. Caffeine can mimic the symptoms of stress and anxiety. Try to keep it to just one cup of dark roast, black or green tea per day.
  • Have a regular bedtime. Melatonin, the hormone that helps you fall asleep, works on an opposite cycle with cortisol: When melatonin is high, cortisol is low, and vice versa. Try wearing some blue light-blocking glasses to get that melatonin flowing every evening!
  • Do nothing for 15 minutes per day. And I mean nothing. Don’t eat, clean, read or use your phone. Find a spare 15 minutes to allow your mind to rest. This is an alternative if you’re resistant to meditation.
  • Exercise. Unless you are at the point where exercise exhausts you, 30 minutes of exercise per day is a proven way to decrease your cortisol levels and help manage your stress. You can combine this with the previous 15-minutes tip – go for a walk and, instead of listening to music or a podcast, let your thoughts keep you company.

While we cannot change many of the factors that are causing us stress, these small lifestyle adjustments are still within reach.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Tax Implications COVID 19

Federal Government Support Related To COVID-19: Tax Implications You Can Expect in 2020

The COVID-19 pandemic is imposing unprecedented strains on our economy and on our personal financial situations. The federal government continues to modify its programs that offer targeted support for individuals, businesses and other organizations.

If you have received any of these benefits, there may be personal and corporate tax implications to you. Here is an update as of October 9 on these programs and what they might mean to your 2020 income tax return.

For individuals

Some Programs Ended

The Canada Emergency Response Benefit (CERB) provided financial support to employed and self-employed Canadians who were directly affected by COVID-19. It covered the period from March 15 to September 26, 2020. The benefit was $2,000 per four-week period, with a maximum of seven four-week periods.

The Canada Emergency Student Benefit (CESB) was available to post-secondary students and recent graduates of high school, college and university programs. Applicants received $1,250 for each four-week period to a maximum of four four-week periods between May 10 and August 29, 2020. Disabled students and those with dependants received an additional $750 per period.

Both the CERB and the CESB payments will be included in the individual’s taxable income for 2020 and, unlike income from employment and Employment Insurance (EI) payments, no income tax was withheld at source from these payments.

New Programs Now Available

These programs have ended and were replaced by three new benefit programs that are also taxable but, unlike the CERB and the CESB, income tax is being withheld from these payments at a rate of 10%.

The Canada Recovery Benefit (CRB) is for those who are unable to work and who are not eligible for EI. Payments are $1,000 every two weeks, with $100 withheld for income tax, for a maximum of 13 two-week periods between September 27, 2020 and September 25, 2021. In addition, if your total income for 2020 (excluding the CRB) exceeds $38,000, you will be required to pay back $0.50 of the CRB for every dollar by which other income exceeds the $38,000 threshold.

The Canada Recovering Caregiving Benefit (CRCB) is designed to support those who are unable to work because they must care for their child under 12 years old or a family member who needs supervised care if their school, regular program or facility is closed because of COVID-19 or because they are sick, self-isolating or at risk of serious health complications due to COVID-19.

Payments are $500 per week, with $50 withheld for income taxes, for a maximum of 26 weeks between September 27, 2020, and September 25, 2021.

The Canada Recovery Sickness Benefit supports those who are unable to work because they are sick or need to self-isolate due to COVID-19. Payments are $500 per week, with $50 withheld for income taxes, for a maximum of two weeks between September 27, 2020, and September 25, 2021.

Calculate your Owings in Advance

In the absence of income tax withholding on the CERB and the CESB, as well as relatively low withholding rates on the three new benefits, any EI payments or any withdrawals from Registered Retirement Savings Plans (RRSPs) may lead to some unexpected and unpleasant news when the 2020 tax returns are prepared.

You can estimate what you owe by first adding up all your sources of income in 2020, including pre-COVID-19 employment income, the CERB and other COVID-19 related benefits, EI payments and any other sources of income, then you estimate the income taxes that are owed on that amount, and compare that to the total income tax that was withheld from your employment income, EI or the newer COVID-19 benefits.

Tools such as the EY online personal tax calculator can be very useful to estimate the taxes payable in your province or territory (assuming that you only qualify for the basic personal amount credit).

Certain COVID-19-related benefits are not taxable and do not have to be reported on your tax return. These include the doubling of the Goods and Services tax credit and the one-time payments to seniors and individuals with disabilities. Seniors received $300 in September 2020; those who received the Guaranteed Income Supplement received an additional $200 for a total of $500. Individuals with disabilities, other than seniors, will receive one-time payments of $600 at the end of October 2020. Disabled seniors will receive “top-up” payments of either $300 or $100 to bring their one-time senior benefits noted above up to the total of $600.

For Businesses

Programs still available, new ones proposed

The Canada Emergency Wage Subsidy (CEWS) covers a portion of an employee’s wages for eligible employees to allow employers to re-hire their employees or avoid layoffs. It is available to Canadian employers who have seen a decrease in revenue due to COVID-19 and is taxable for the qualifying period to which it relates, not when it is received. On October 9, it was proposed that the CEWS will be extended through June 2021.

The Canada Emergency Business Account (CEBA) provides interest-free loans of up to $40,000 to small businesses and not-for-profit organizations. Repaying the balance of the loan on or before the end of 2022 will result in 25% of the loan being forgiven. On October 9, the federal government proposed that an additional $20,000 interest-free loan would be available, with half this amount being forgivable if the loan is repaid by the end of 2022.

The Canada Revenue Agency has confirmed that the forgivable portion of the CEBA must be included in taxable income in the year that it is received. If the forgivable portion has to be repaid (e.g., if the loan is not repaid by the end of 2022) the forgivable portion can be deducted when the loan is repaid.

The Canada Emergency Commercial Rent Assistance (CECRA) provided relief for small businesses experiencing financial hardship due to COVID-19. Over the course of the program, property owners reduced rent by at least 75% for the months of April through September for their small business tenants.

The CECRA provided a forgivable loan for 50% of the rent otherwise payable, with the tenant paying up to 25% and the property owner forgiving at least 25%. As with the CEBA, the CECRA should be included in taxable income when it is received, with an offsetting deduction if and when it is repaid.

On October 9, the federal government proposed a new Canada Emergency Rent Subsidy (CERS). This will provide rent and mortgage support directly to tenants, unlike the CECRA which provided forgivable loans to landlords.

It will be available to businesses, charities and non-profit organizations that have experienced drops in revenue by subsidizing rent and mortgage expenses from September 27 to December 19, 2020, on a sliding scale up to a maximum of 65% of eligible expenses. There is also a top-up available for organizations that are temporarily closed by a mandatory public health order.

It is anticipated that these payments would be taxable for the qualifying period to which they relate, similar to the treatment of the CEWS.

These government benefits have played a critical role in supporting individuals and corporations through the challenges posed by the pandemic, and it is important to understand the tax treatment of these benefits so that you are not unpleasantly surprised when you file your 2020 tax returns.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

All About The Canada Emergency Rent Subsidy

The new Canada Emergency Rent Subsidy (“CERS”) is now available. The program replaces the Canada Emergency Commercial Rent Assistance (“CECRA”), which ended September 30, 2020. The subsidy will benefit qualifying renters and property owners.

Eligible Entities

Eligible entities for the CERS include businesses (proprietorships, partnerships), taxable corporations and trusts, non-profit organizations, and registered charities.

All eligible entities must have either one of the following:

  • a CRA payroll account in March 15, 2020, or
  • a CRA business number on September 27, 2020.

Qualifying Properties

To qualify for CERS, the property must meet all of these conditions:

  • Located in Canada,
  • Rented or owned by the eligible entity
  • Used by the entity in the course of its ordinary activities
  • Not a place of residence used by the entity or a non-arm’s length person (nor land subjacent or contiguous to such residence).

Determination of Revenue Drop

Eligible entities must calculate a revenue drop percentage of either the current or the prior claim period. Table 1 outlines the reference periods pertaining to each claim period (coinciding with the CEWS claim periods). An eligible entity may choose between a general approach or an alternative approach in comparing revenues.

Base Rent Subsidy

The maximum rent subsidy that can be claimed is 65% for eligible entities that experience a revenue drop of 70% or higher. The calculation of the base rent subsidy for periods noted in Table 1 is shown in Table 2 below.

Qualifying Expenses

Once the base rent subsidy is determined, the rate is applied to qualifying expenses pertaining to each qualifying property.

Qualifying expenses are limited to expenses paid or payable pursuant to a written agreement that was entered into before October 9, 2020 (or continuation of those agreements).

Qualifying expenses for renters include the following:

  • Commercial rent,
  • Amounts required to be paid under a net lease agreement are considered as rent. These may include the following:
    • Base rent,
    • Property insurance,
    • Utilities,
    • Common area maintenance, and
    • Property taxes

Qualifying renters cannot include GST, damages, and interest or penalties for unpaid amounts. Additionally, tenant insurance and leasehold improvements are not considered as eligible expenses.

Qualifying expenses for owners of a qualifying property include the following:

  • Property taxes, including school and municipal taxes
  • Property insurance,
  • Interest on commercial mortgages

Qualifying owners are required to subtract any subleasing revenues from their eligible expenses.

Eligible expenses will be capped at $75,000 per location with an overall cap of $300,000 for a qualifying period that is to be shared amongst affiliated entities.

Lockdown Support

Entities required to reduce business activities or are forced to close due to a public health order, may qualify for lockdown support if their revenue drop exceeds 25% as a result of the reduced activities or closure. The lockdown support is calculated to be 25% of the qualifying expenses and is pro-rated for the number of days the property was subject to a public health order during the claim period.

Table 3 below shows the reference periods in claiming the Lockdown Support.

How to Apply for the CERS

Eligible entities must apply for CERS through My Business Account on the CRA website.

For further information on the CERS please click here.

For assistance with the CERS, please contact our office.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

CEWS update

UPDATE: Canada Emergency Wage Subsidy (CEWS)

CEWS Extended to June 2021

On November 19, 2020, the CEWS was extended to June 2021. The maximum base subsidy rate for periods 8 to 10 (September 27 to December 19, 2020) will remain at 40% of the remuneration paid.

Application Deadlines

The deadline to apply for the CEWS for claim periods 1 to 5 is January 31, 2021. The deadline to apply for qualifying periods thereafter is 180 days from the last day of the claim period.

Top-up Subsidy

Starting from claim period 8 (September 27 – October 24, 2020), eligibility for the top-up subsidy will be calculated by comparing the revenue for the claim period against the revenue for the same period in the prior year. Revenues must have dropped by more than 50% to qualify for the top-up subsidy. Employers who have chosen to use the average revenues of January and February 2020 to calculate their base subsidy amounts will use the same approach to determine their eligibility for the top-up subsidy.

For claim periods 8 to 10, using the current month’s revenues to determine the revenue drop (as explained above) is optional. Employers may continue to calculate the revenue drop using the average revenues of the previous 3-months or they can change to the method of comparing the current period’s revenue to that of the same period in the prior year, the latter is the method prior to the November change. The original calculation method is explained in our July 27, 2020 – CEWS update.

Furloughed Employees

Payments made to employees who are on leave with pay are no longer eligible for full subsidy under the CEWS. Starting on October 25, 2020, the wage subsidy for furloughed employees was adjusted to align with the benefits provided through employment insurance (“EI”).

The wage subsidy calculation for a furloughed employee is now the lesser of:

  • The amount of eligible remuneration paid in respect of the week; and
  • The greater of:
    • $500, and
    • 55% of pre-crisis remuneration for the employee, up to a maximum subsidy amount of $573.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Canada Emergency Business Account

Canada Emergency Business Account (CEBA)

What Is CEBA?

Introduced on April 9, 2020, CEBA is a government program administered by a number of financial institutions across Canada, based on directions from Export Development Canada.

This program was launched to support businesses and non-profits that have experienced diminished revenues due to Covid-19 by providing partially forgivable interest-free loans. Its intention is to help businesses safely navigate a period of shutdown, and better positioning themselves to resume normal business operations after Covid-19.

The application deadline for this program is March 31, 2021.

HOW MUCH CAN YOU BORROW?

When CEBA first came out, the maximum loanable amount was up to $40,000. As of December 4, 2020, CEBA applicants can now receive up to a $60,000 loan.

CEBA applicants who previously qualified for the initial $40,000 CEBA loan may still apply for the additional $20,000 expansion at the financial institution that provided the initial loan, even if it has already been repaid.

WHO QUALIFIES?

To qualify, the CEBA applicant must:

  • be a Canadian operating business in operation as of March 1, 2020;
  • have an active CRA Business Number;
  • have an active business chequing/operating account with its primary financial institution;
  • not have previously used CEBA (except in the case where you had previously been approved for the initial $40,000 loan and would like to apply for the $20,000 expansion – that is allowable) and will not apply for support under CEBA at any other financial institution;
  • acknowledge its intention to continue to operate its business or to resume operations; and
  • participate in post-funding surveys conducted by the Government of Canada or any of its agents.

CEBA applicants may choose one of two streams to obtain their CEBA loan. The amounts that can be loaned under these streams are the same.

CEBA has undergone a few changes since its initial introduction and the requirements we list above may change without prior notice. If you would like to determine your eligibility for CEBA based on the latest requirements, an online Pre-Screen Tool is available. We would also recommend that you visit your primary financial institution’s website as they may have their loan applications available online which could provide insights as to requirements not on the CEBA website.

WHAT CAN I SPEND THE CEBA FUNDS ON?

Funds are required to be spent on non-deferrable eligible expenses (as defined on the CEBA website) incurred during 2020.

This program is not defined by legislation or regulations; therefore, participants should treat it as they would any business contract and carefully review the terms of their loan before agreeing. Restrictions, if any, may still slightly differ between financial institutions therefore CEBA applicants should carefully review the terms of their loan agreement and take due care in ensuring that funds are spent accordingly.

Repaying The Loan

Repayments can be made any time after October 1, 2020. If the CEBA applicant cannot fully repay the loan by December 31, 2022, the loan is converted into a 3-year term loan with interest fixed at 5%/year. The payment frequency of such interest will be determined by your financial institution and the full principal of the converted loan will be due on December 31, 2025.

However, if you “fully” repay the loan by December 31, 2022, a portion of the loan will be forgiven as follows:

  • If you borrowed $40,000 or less, 25 percent of the loan will be forgiven (up to $10,000), or
  • If you borrowed more than $40,000 and up to $60,000, $10,000 of the first $40,000 of the loan will be forgiven plus 50 percent of the amounts above $40,000 and up to $60,000 (up to an additional $10,000).

The forgivable portion of CEBA is taxable when received, and if and when repaid would be deductible. Please contact us or a tax professional if you have any questions.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

6 Workplace Safety Tips For COVID

6 Pandemic Workplace Tips For Your Workplace This Winter

As the weather gets colder and Canadians start to move indoors, an increase in COVID-19 case numbers – maybe even a second wave – is likely. Whether or not there will be further shutdowns, there is little doubt that the cold and flu season is on its way. As many of those symptoms are similar to those of COVID-19, your business will need to be ready for increased absences.

6 Tips For Preparing Your Workplace This Winter

This need to self-isolate will impact not just the individual workers, but their families as well. Many parents may be keeping their children home from school to both avoid spreading the virus and to keep children who have symptoms from potentially bringing COVID-19 to their school or childcare. So, given these concerns, what can organizations do to prepare?

1. Review Company Policis Related To COVID-19

Under occupational health and safety legislation, employers have an obligation to take all reasonable precautions to ensure their workplace is safe. As well, many organizations should be mindful of potential legal obligations to the public at large. As such, if you have not done so already, your organization should review its policies and how they relate to the COVID-19 pandemic.

In particular, make sure that everyone in your workplace is made aware of the symptoms of COVID-19 and what they should do if they exhibit them. What is your policy on sick leave? What about remote work? Employees should know what is expected of them should they wake up with a runny nose or start to feel ill while working 

2. Don’t Forget What You’ve Learned

Many lessons learned in the early stages of the pandemic will be helpful in navigating the coming months.

Some businesses may have the mindset of getting everyone back in the physical workspace as quickly as possible. Although this may be the long-term goal, we may still be a while yet from reaching it.

If your business has been able to adapt to employees working remotely, it is advisable to keep this option open. There will inevitably be some employees who are able to work but cannot come into the office for health reasons, but there will also be those that must stay home to take care of dependants, even just temporarily; a flexible approach to remote work is a key tool that employers will need to get through the coming months.

Keeping it as an option can help protect those in your workplace from the virus while providing a way to maintain productivity during the absence.

3. Be Ready For Those Who Might Take Advantage

There may be some that see that runny nose as a ticket to a day off, even if they might be capable of working remotely. This will be difficult to police, and employers should be mindful of employees’ privacy rights as well as potential human rights concerns related to undisclosed illnesses.

Even with this in mind, employers can monitor patterns in absences and have their policies address culpable absenteeism and the related consequences. 

4. Be Flexible

Although putting policies in place or cementing existing ones may sound to some like the employer “laying down the law,” it cannot be overstated how important it is to be flexible in such policies.

With the pandemic impacting every aspect of our society, there will inevitably be employee absences due to family responsibilities. Employers should also not lose sight of the fact that, in many jurisdictions, they not only must provide time off to workers to care for dependants; they also have an obligation under human rights legislation to make accommodations for family status rights just shy of the standard of “undue hardship” to the employer.

As such, there will be the need for some flexibility in the rules. Employers will need to be ready for such things as remote work and different start and end times, and they will also need to be ready to be as flexible as possible on scheduling not only to meet legal obligations but also to adapt to increased absences.

5. Layoffs May Be Needed

Even with a comprehensive policy in place, there may still be shutdowns and layoffs ahead of us yet. Employers should be mindful of their legal obligations and carefully review the statutory requirements in their jurisdiction, seeking legal advice where necessary.

It is also important to be aware that layoffs are a creature of statute, but even if the layoff meets statutory requirements, an employer may have contractual and/or common law notice obligations to the employees they lay off.

Moreover, even if the layoff is only intended to be temporary, an employee could challenge it, saying that it amounts to a constructive dismissal. Before you move ahead, make sure to review any employment agreements you have and get some legal advice about what the risks and potential liabilities may be.

6. Communication Is Key

As with the policy and preparatory points above, communication is key. Handled well, it may help to mitigate against potential claims.

  • Make sure to communicate any changes in policy to your employees, giving them an opportunity to ask questions.
  • Have your employees sign off to affirm that they have received and understand the policy.
  • Even without policy changes, remember how important it is to communicate with your employees. For example, if you intend for a layoff to be temporary, be sure to clearly communicate this to the employee and, where possible, keep laid-off employees up to date on the situation.

And do not forget that you have obligations of good faith to your employees. Clearly-documented communication can help mitigate allegations by laid-off employees of employers not living up to their good faith obligations. As the saying goes: “an ounce of prevention is worth a pound of cure.”

We may not be able to stop what is coming, but there are steps your organization can take to get ready. And as we have seen, the more you can include your workers in the process as you carry out those steps, the more prepared the entire organization will be to adapt to what potentially lies ahead.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

COVID 19 Update Canada

COVID-19 UPDATE: Federal Government Support

As was covered in the last issue, the COVID-19 pandemic has resulted in unprecedented strains on our economy and our personal financial situations. The federal government announced several programs offering targeted support for individuals, businesses and other organizations. The following outlines the updates and amendments to these programs from May 13 to July 1.

COVID-19 Update For All Individuals

The government had extended the filing deadline for most personal tax returns from April 30 to June 1; on May 25, it announced that it will not assess late filing penalties if those returns are filed by September 1, which is also the date by which any balances due must be paid.

Extending the deadline for filing personal tax returns would normally mean delays in the 2020/21 Goods and Services Tax credit, Canada Child Benefit and Guaranteed Income Supplement (GIS) payments, which all start in July 2020 and are based on net income reported on the 2019 tax return. However, estimated payments based on the 2018 reported net income will continue until the end of September 2020. If you are eligible for these benefits,  file your 2019 tax returns as soon as possible to avoid an interruption in these benefits.

The previously-announced Canada Emergency Response Benefit (CERB) provides $500 per week for up to 16 weeks to eligible workers who have stopped working or whose work hours have been reduced because of COVID-19. The federal government announced in June that these payments will be extended by an additional eight weeks to August 29. The draft legislation released on June 10 included additional flexibility, e.g., for a short-term loss of employment, as well as restrictions intended to encourage those receiving the benefit to seek employment.

The Canada Revenue Agency (CRA) released guidance on international tax issues raised by the crisis. For example, while residency for income tax purposes is normally a question of fact, a “sojourner” who is physically present in Canada for 183 days or more in any taxation year will be deemed resident throughout the year and is therefore taxable in Canada on their worldwide income.

When an individual has remained in Canada and is unable to return to their country of residence solely because of the COVID-19 travel restrictions, the CRA will not count those days towards the 183-day limit for deemed residency. The CRA may apply similar flexibility to corporate residency issues on a case-by-case basis, and to whether a corporation is carrying on a business or has a permanent establishment in Canada.

Students

The Canada Emergency Student Benefit (CESB) opened for applications on May 15. It provides support to students and new graduates who are not eligible for the CERB or Employment Insurance benefits, or who are unable to work due to COVID-19; from May to August 2020, the CESB will be $1,250 per month for eligible students or $2,000 per month for eligible students with dependents or a disability. Students can earn up to $1,000 during each four-week period without affecting their CESB eligibility. Applications for the new Canada Student Service Grant (CSSG) opened on June 25 to students who choose to do national service and serve their communities. It will provide grants of between $1,000 and $5,000 based on the number of hours they serve.

Seniors and People with Disabilities

Seniors who are eligible for the Old Age Security pension (OAS) will receive a one-time tax-free payment of $300 in early July; those who also receive the GIS will receive an additional $200.

Individuals who hold a valid Disability Tax Credit certificate as of June 1 will also receive a one-time tax-free payment of $600; if they also receive both the OAS and GIS, they will receive an additional $100, while those who receive only the OAS will receive $300.

COVID-19 Update for Small business

The CRA has further extended the due date to September 1 for corporations to file a T2 tax return and for trusts to file a T3 tax return, which would have been due in June, July or August. The government also announced support for the new Business Resilience Network operated by the Canadian Chamber of Commerce, which provides financial planning advice and information about tax rules and government programs to small- to medium-sized businesses, not-for-profit organizations and charities.

Support to Fill Wage Gaps

The Canada Emergency Wage Subsidy (CEWS) enables eligible employers to re-hire their employees and avoid layoffs. Since it was first announced, the program has broadened its definition of “eligible employees” and been extended from a June 6 to an August 29 end date, along with other amendments to increase access and clarify eligibility requirements.

Small Businesses, Not-For-Profit & Commercial Property

The federal government provides interest-free loans of up to $40,000 for small businesses and not-for-profit organizations through the Canada Emergency Business Account (CEBA). To qualify, the organization must have had 2019 payroll expenses of between $20,000 and $1.5 million. In June, access to the CEBA was extended to businesses with payroll of less than $20,000 and eligible non-deferrable expenses of between $40,000 and $1.5 million; this makes the program accessible to sole proprietors earning business income directly and to family-owned corporations that remunerate through dividends rather than payroll.

The Canada Emergency Commercial Rent Assistance (CECRA) program provides support to commercial property owners who forgive a portion of the April, May and June rent of eligible small business tenants. Applications opened in late May. On June 30, it was announced that the CECRA would be extended for the month of July. Businesses located on federal lands, such as national parks and historical sites, will also be eligible for rent relief on terms similar to those of the CECRA.

Programs for Other Circumstances

Previous articles identified targeted programs to meet the needs of organizations that do not qualify for other COVID-19 programs or that are considered to need more support.

  • Additional support has been announced through the Women Entrepreneurship Strategy Ecosystem Fund.
  • A new Emergency Processing Fund will provide funding for up to 50% (25% for larger enterprises) for eligible COVID-19 response and strategic investment expenditures incurred by small- and medium-sized enterprises in the agricultural food processing or manufacturing industries. Applications must be processed by July 31.
  • Support will be also be available to fish, seafood and aquaculture processors through the Canada Seafood Stabilization Fund, and to the tourism industry through the Atlantic Canada Opportunities Agency and through Canada Economic Development for Quebec Regions.

As these programs are being updated or amended frequently, please check www.canada.ca for the most current information.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Firm News Update COVID 19

Commitment To Service During COVID-19

Our COVID-19 operating procedures will stay in place for the foreseeable future and we continue to enhance them in order to keep everyone safe and to support our employees in this new reality.  In fact, maintaining robust health and safety measures is now more crucial than ever as restrictions are eased and as Canadians venture outside of their homes with greater frequency.  For the restart of our economy to be successful, we must each play a role and maintain the discipline we have shown over the last two months.

While this is by no means a return to business as usual, and circumstances remain extremely challenging for so many, we believe this is a step in the right direction.

That is why we are practicing and enforcing best practices for physical distancing, personal hygiene and self-isolation in the midst of COVID-19.  Rest assured that we are doing our best to keep you informed and taking every precaution to ensure Avisar’s office continues to be a safe environment.

This means we are asking you to work with us through digital channels as much as possible and encouraging remote meetings with virtual tools instead of in-person visits to Avisar’s office, limiting invitations and face-to-face in-office appointments.

We are encouraging all of our clients to continue to interact with our team of professionals via email, telephone, and even video chat if that is your preference.  It is our hope that you are continuing to follow physical distancing rules and that you will refrain from coming to Avisar’s office unless you absolutely have to.  We also encourage that you:

  • Scan your information, or use Office Lens to take pictures with your phone or tablet and convert them to a readable PDF;
  • Submit your information using our secure client portal;
  • Receive your accounting and tax packages via RightSignature, our secure electronic signature service, as much as possible this year.  We appreciate your understanding and receptiveness to this option if it is not something that you would normally consider. Signing a document through RightSignature is a simple process that any of our administrators can assist you with if required.  We are confident that our secure electronic tools will make submitting and receiving your tax and accounting information easier than you thought and look forward to working together to meet your goals and deadlines. 

Avisar’s office is open to the public and the following guidelines are in place to maintain a safe environment for you and our employees:

  • Appointments will be managed to allow for physical distancing between appointments and to reduce the number of people in common areas at any one time (occupancy limits have been posted);
  • Your movement will be restricted within Avisar’s office to the reception and boardroom areas;
  • We have introduced a new seating plan in our reception and boardroom areas that will provide sufficient distance between each client and our employees;
  • Social distancing signage and floor decals clearly identify 2-metre physical distancing within the office;
  • We ask that you arrive no more than 10 minutes prior to your scheduled appointment and that you wash/sanitize your hands before and after your visit;
  • Face masks may be worn if you feel more comfortable but are not required;
  • You will be asked some screening questions and to provide contact information prior to your scheduled appointment;
  • Contact-less payment transactions are accepted with a limit of up to $250.

In addition to our normal rigorous cleaning standards, we have increased the frequency of disinfecting high-touch surfaces throughout the office.

  • We have increased the frequency of cleaning of all areas in the office, including reception and boardrooms, door handles, tabletops.
  • The building’s janitorial service cleans and disinfects all high traffic touchpoints on a nightly basis since the outbreak of COVID-19.   The building’s restrooms are cleaned and disinfected and floors are mopped on a daily basis using disinfectant solutions.
  • All clients and employees are regularly reminded of handwashing and hygiene protocols (user guidelines attached).  You will be asked to wash your hands or use the hand sanitizer provided upon arrival to our office.
  • We are following the recommendations of the BC and federal governments to avoid all non-essential travel.  We ask that Employees and clients limit travel based on BC’s Restart Plan and on the Public Health Agency of Canada’s website and self-quarantine for 14 days before coming to Avisar’s office if required. 

To help us ensure the safety of our office space and employees, we ask that if you are feeling unwell that you choose to reschedule your appointment with us for another time.

We are working diligently to adapt to new circumstances while planning for the future.  We are grateful to you, your ongoing support, and that you are doing your part to flatten the curve.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.