Canadian Emergency Rent Subsidy

CANADA EMERGENCY RENT SUBSIDY NOT JUST FOR RENTERS

We have entered the second wave of the COVID-19 virus.  2020 has been a constant challenge for all businesses and individuals with no indications of a let up in the foreseeable future until a vaccine is developed and distributed. We would like to express our admiration for how everyone is facing these challenges head on and offer all support required to ensure the continued and future prosperity of our community.

We encourage you to reach out to us whether it be concerning government programs, projections, forecasting, taxation issues or as a confidant to bounce ideas off or to vent to.  You are not in this alone and as business owners it is an incredibly stressful time. Make sure you are taking care of yourself so that you can take care of your business, staff, family and community.

Below is information on the Canada Emergency Rent Subsidy (CERS).  This program is very similar to the Canada Emergency Wage Subsidy (CEWS) regarding revenue and subsidy calculations. 

It can’t be stressed enough this program is not just for renters, but also for owners of qualifying property.  The main information you will require to gather is below:

 

Tenants

-          Monthly revenue from October 2019 to December 2020

-          Monthly rent paid for October 2020 and onwards

 

Property owner

-          Monthly rental revenue from October 2019 to December 2020

-          Property taxes for the year

-          Insurance for the year

-          Commercial mortgage interest per month

 

Instead of providing the technical information on the program we have attached the link below from the CRA website, and current claim periods.  Following this section will be examples of general situations in that the subsidy may or may not apply.  If you are unsure of if you qualify, or how to calculate the subsidy please reach out for further information.

https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-rent-subsidy.html

Claim Periods

Current claim periods for these rules are:

Claim period 1 – September 27 to October 24, 2020 (NOW OPEN)

Claim period 2 – October 5 to November 21, 2020

Claim period 3 – November 22 to December 19, 2020

Further periods will be extended until June 2021

Examples

I operate a retail business that has suffered a revenue decline without being officially shut down by a government entity due to the COVID-19 pandemic.  I rent my only location at $5,000 per month.

Yes, you would qualify for the CERS base subsidy.

I operate a contracting business that has seen revenues increase and rent a space for $5,000 per month as my head office.

No, you would not qualify for the CERS, but it is important to continually monitor your situation in future months. 

I own several commercial real estate properties in town, and three tenants have gone out of business decreasing my revenues by 20%.

No, you would not qualify for the CERS, the properties are used primarily to generate rental income and thus do not qualify for the subsidy.

I operate a fitness facility that was recently forced to close for two weeks, and revenues have decrease by 10%.  I rent my facility at a cost of $10,000 per month. 

Yes, you would qualify for the CERS base subsidy, as well as the lockdown support subsidy. 

My restaurant was forced to limit the capacity of diners, and revenues are down by 40%.  My rent is based on percentage of sales.

Yes, you would qualify for the CERS base subsidy, but not the lockdown support subsidy.

My restaurant was forced to close the dining room, but can offer delivery and takeout, and revenues are down by 40%.  My rent is based on percentage of sales.

Yes, you would qualify for the CERS base subsidy, and potentially the lockdown support subsidy.

I opened my business on February 14, 2020 and pay rent of $5,000 per month to my landlord.  My opening two weeks were excellent, but business has slowed. 

Yes, within the program provisions have been made to use the February revenues as a comparative revenue when calculating a potential revenue decline.

My company ABC Inc. owns a qualified property that rents only to my consulting company XYZ Inc.  My consulting company has continued to pay rent to the ABC Inc. but has had a revenue decrease of 20%.

Yes, within the program there are elections that ABC Inc. could qualify for the CERS base subsidy.

My company ABC Inc. owns a qualified property that rents 10% of the building space to my consulting company XYZ Inc. and the remaining 90% of the building is rented a law firm.  My consulting company has continued to pay rent to the ABC Inc. but has had a revenue decrease of 20%.

No, the primary purpose of the building is for rental income and thus doesn’t qualify for the CERS.

My company ABC Inc. owns a qualified property that rents 90% of the building to my consulting company XYZ Inc. and 10% of the building is rented to a law firm. My consulting company has continued to pay rent to the ABC Inc. but has had a revenue decrease of 20%.

Yes, the primary purpose of the building is related to the consulting business and within the program there are elections that ABC Inc. could qualify for the CERS base subsidy. 

 

COVID-19 Economic Response Update

CANADA EMERGENCY WAGE SUBSIDY (CEWS)

The government has announced that the program will continue until June 2021, however the details beyond December 19, 2020 have not been released.

On October 14, 2020 has recommended changes to the subsidy for Period 8 (September 27 to October 24, 2020) onward.  Instead of using the current three-month revenue decline test for the top-up subsidy, both the base and top-up would be determined by the change in monthly revenue, year-over-year, for either the current or previous calendar month.  This would allow businesses that have a sudden drop in revenues to maximize the subsidy in that specific month when impacted the most.  You can currently apply for Period 8, but we would recommend waiting until the online spreadsheets have been updated with CRA to avoid having to resubmit based on the proposed changes. 

T4 REPORTING REQUIREMENTS

The CEWS will have to be reported on employees T4’s on a per period basis.  CRA has introduced several new boxes for T4 reporting.  It is important to know that the income report in these boxes will be the gross employment income, not the subsidy received. 

  • Code 57: Employment income – March 15 to May 9
  • Code 58: Employment income – May 10 to July 4
  • Code 59: Employment income – July 5 to August 29
  • Code 60: Employment income – August 30 to September 26

Each period, which aligns with periods relating to COVID-19 benefit eligibility, pertains to the day the employee was paid and not necessarily the period of work the payment covered. For example, a payment made May 14, for the pay period of April 25 to May 8, would be reported under Code 58.

With program extensions there may be additional codes introduced before year end. This may require significant extra work in completing T4’s for 2020.

10% TEMPORARY WAGE SUBSIDY (TWS) FOR EMPLOYERS

The 10% wage subsidy program is related to wages and salaries earned between March 18, 2020 and June 19, 2020.  If you have not yet claimed this subsidy, you can still wait until T4 filing time to claim the refund at that time. 

Form PD27, 10% Temporary Wage Subsidy Self-Identification Form for Employers can be found online or submitted through my business account to report the subsidy claimed to CRA.  This form will allow CRA to reconcile your source deductions remitted on your final T4 Summary.  The form should be filed by those who claimed the TWS, intend to claim the TWS or have claimed the CEWS.  If you elected at zero regarding the CEWS you must still complete the form. 

CANADA EMERGENCY BUSINESS ACCOUNT (CEBA)

On October 26, 2020 eligible businesses that currently operate through a personal bank account will be able to apply for CEBA, previously you had to have a separate business bank account.  This could provide significant relief for sole proprietors. 

It was also announced an expanded CEBA from $40,000 to $60,000, which will be available to all eligible previous and new CEBA applicants.  Half of the additional $20,000 financing would be forgivable if repaid by December 31, 2022, providing potential $20,000 in forgiveness on the total $60,000 loan.  Our expectation is the $20,000 will require some combination of revenue drops or providing evidence similar to the non-deferred expenses approach for the $40,000.

The application deadline has been extended to December 31, 2020.   

CANADA EMERGENCY RENT SUBSIDY

The new rent subsidy would be provided directly to tenants until June 2021 for qualifying organizations impacted by COVID-19.  The subsidy would be based on a sliding scale of revenue decreases to a maximum of 65 percent of eligible expenses until December 19, 2020 and organizations would be able to make claims retroactively for the period that began September 27 and ends October 24, 2020.  The periods would match up with the CEWS.

A top-up Canada Emergency Rent Subsidy of 25 percent for organization temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65 percent subsidy. 

It is important to note this has not been passed in Parliament yet, and we are waiting on more details around non-arm’s length arrangements (holding company renting to operating company) and for the definition of “mandatory shutdown”.

THE TOURISM ACCOMMODATIONS REAL PROPERTY TAX REBATE PROGRAM

The Province of Nova Scotia has implemented this program which is a 25% rebate to help hotels, motels, and inns with their 2020-21 commercial property tax.  The operator would need to have incurred a year-over-year revenue loss from room accommodation revenue of at least 30% for the period April 1, 2020 to October 31, 2020.

Eligible accommodations

  • must meet the definition of a roofed accommodation in the Tourist Accommodations Registration Act
  • have five or more rooms available for rent to the public
  • be assessed as a commercial property
  • not be in arrears of any real property taxes, up to and including 2020-2021 real property taxes

Applications for this rebate open on November 16, 2020.

TAXATION AND TIMING - CEWS

For income tax purposes, CEWS is considered government assistance included in income when received. However, the legislation deems CEWS to be received at the end of the CEWS period to which it relates. These period end dates are set out below.

  • Period 1: April 11, 2020;
  • Period 2: May 9, 2020;
  • Period 3: June 6, 2020;
  • Period 4: July 4, 2020;
  • Period 5: August 1, 2020;
  • Period 6: August 29, 2020;
  • Period 7: September 26, 2020;
  • Period 8: October 24, 2020;
  • Period 9: November 21, 2020; and
  • Period 10: December 19, 2020.

As these dates will not match the typical business selection of a month-end date, this may create differences between accounting and taxable income for corporations and other entities with years ending between April and November 2020. 

Claims can be filed as late as January 31, 2021 under the changes included in Bill C-20. Even if these claims are filed subsequent to year-end, the benefits are still deemed received, and taxable, at the end of each CEWS period.

INCOME TAX TREATMENT – CEBA

The CEBA program provides a forgivable loan to program participants.  Absent special legislation, it appears the forgivable portion loans under CEBA being included in income when the loan is advanced. In the event the terms of the forgiveness are not met, a deduction is available when the loan is repaid.

An election can be filed to exclude the payment from income and instead offset a related expense (Subsection 12(2.2)) or the cost of a related asset acquired (Subsection 13(7.4)). Where the non-deferrable expenses paid with CEBA funds are not incurred until the following fiscal year, such an election may permit the income to be deferred to match the expense.

 

 

COVID-19 April 8, 2020 Government Programs Update

UPDATE as of APRIL 8, 2020

To view the document in PDF format click here

COVID-19 – FINANCIAL RELIEF FOR CANADIANS

Since the beginning of March, restrictions and measures related to COVID-19 have rapidly escalated. On March 18, 2020, the Government of Canada announced a series of measures designed to support the finances of individuals, businesses, charities, and non-profit organizations. Since then, on an almost daily basis, new possibilities have been introduced, and old ones have been adjusted. This document aims to provide a consolidated summary of support in their most current state of affairs, as of April 8, 2020.

BUSINESSES

As Canada struggles with the COVID-19 pandemic, the federal government has implemented a number of measures to assist businesses improve their cash flow such that they can survive over the coming months. They can be sorted into three primary categories: payroll support, financing, and deferrals of tax payments. While sole proprietors are eligible for many of these measures, some additional measures will be discussed in the Individuals section of this newsletter.

Payroll Support

There are generally three payroll programs available: the 10% Temporary Wage Subsidy (10% WS), the 75% Canada Emergency Wage Subsidy (75% WS), and the Employment Insurance (EI) Work-sharing Program. In general, the 75% WS is available to a wide variety of entities whose revenue has dropped by at least 30%. The 10% WS is available only to smaller businesses, but does not require a revenue decline. In cases where employers are entitled to both, amounts received under the 10% WS will reduce the amounts receivable under the 75% WS.

The EI Work-sharing Program is different in that it enables the employees and employer to agree to reduce working hours by 10% to 60%. This reduces the employer’s payroll costs, while the employees receive EI payments directly for the reduction in their hours. While the Work-sharing Program can be used in combination with a subsidy, the government has specifically noted that receipts under the 75% subsidy will be eroded by the EI received by the employee. The legislation implementing the 10% subsidy does not provide for any similar reduction.

Read More

COVID-19 April 1, 2020 Government Programs Update

 BelliveauVeinotte tag

Updated April 1st, 2020

On March 25th Canada enacted Bill C-13 An Act respecting certain measures in response to COVID-19. This Bill confirmed many measures previously announced by the Government in the March 18th COVID-19 Economic Response Plan. Below is summary of the key items, their eligibility, and application process.

Emergency Response Benefit (ERB)

The Emergency Response Benefit legislation combines the previously announced “Emergency Care Benefit” and the “Emergency Support Benefits” as previously described in the COVID-19 Economic Response Plan (ERP).  While continuing to focus on those not eligible for traditional employment insurance (EI) the actual legislation now provides coverage to a broader group of people than originally announced. 

Eligibility

Previously the ERP described that the payments would support those who are infected, in isolation, are caring for a family member who is sick, or are required to care for children due to school closures but are not eligible for EI sickness benefits, a March 25, 2020 Department of Finance update notes that it is also now available for: workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work; and wage earners and self-employed individuals, including contract workers, who are not eligible for conventional EI benefits. 

The legislation requires the applicant to be an “eligible worker”, which means that they must be:

  • at least 15 years of age;
  • resident in Canada; and
  • for 2019 or in the 12-month period preceding the day on which they make an application had a total income of at least $5,000 from
  • employment;
  • self-employment;
  • certain EI benefits (maternity and parental benefits); and
  • allowances, money or other benefits paid to the person under a provincial plan because of pregnancy or in respect of the care by the person of one or more of their new-born children or one or more children placed with them for the purpose of adoption.

The worker, whether employed or self-employed, must cease to work for reasons related to COVID-19 for at least 14 consecutive days within the four-week period in respect of which they apply for the payment. For the period of cessation of work, the applicant cannot receive income from the sources listed above, and cannot receive any other EI benefits. Further, workers that quit voluntarily are not eligible.

Benefits

Applicants will receive $500 a week for a maximum of 16 weeks. This is paid every 4 weeks.  These payments are not subject to law relating to bankruptcy or insolvency and are not garnishable.

Application process

A worker may apply for an income support payment for any four-week period falling within the period beginning on March 15, 2020 and ending on October 3, 2020 (payments are made every four weeks). Canadians would begin to receive their payments within 3-5 days of application, if registered for direct deposit. Applicants can begin applying the week of April 6th through their CRA My Account. The specific application date depends on the applicant’s birth month, please see below:

If you were born in the month of

Apply for CERB on

Your best day to apply

January, February, or March

Mondays

April 6

April, May, or June

Tuesdays

April 7

July, August, or September

Wednesdays

April 8

October, November, or December

Thursdays

April 9

Any month

Fridays, Saturdays, and Sundays

 


If you have already applied for EI benefits after March 15th there is no need to reapply for this benefit, your application for EI will automatically transfer to this benefit. If you applied for EI benefits before March 15th you will continue to receive your EI benefits. If those end prior to October 3rd you will then be able to apply for the Emergency Benefit, as long as your reason for continued unemployment is COVID-19.

Canada Emergency Wage Subsidy

Eligibility

Eligible employers who suffer a drop in gross revenues of at least 30% in March, April or May, when compared to the same month in 2019, would be able to access the subsidy. Eligible employers would include employers of all sizes and across all sectors of the economy, with the exception of public sector entities.

Benefits

The Government will cover up to 75% of an employee’s salary on the first $58,700 that they earn. That means up to $847 a week per employee. Businesses will not be required to pay the 25% above the 75% that the government will be subsidizing, although an eligible employer’s entitlement to this wage subsidy will be based entirely on the salary or wages actually paid to employees. All employers would be expected to at least make best efforts to top up salaries to 100% of the maximum wages covered.

Application process

Eligible employers will be able to apply for this through the CRA online portal. Further details on this will be released shortly. Funds will be available by early May. The business will need to confirm that they have suffered at least a 30% reduction in gross revenues due to COVID-19.

Other notes

Those organizations that do not qualify for the Canada Emergency Wage Subsidy may continue to qualify for the previously announced wage subsidy of 10% of remuneration paid from March 18 to before June 20, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.

Additional One-Time GST Credit

Eligibility

Any individual eligible for the quarterly GSTC based on their 2018 personal income tax filings will be eligible for an additional payment in May, 2020.  Some others may be entitled to a one-time payment, even if their income is too high to receive quarterly payments. 

Benefits

As is the case with the regular GSTC, the one-time payment will depend on family composition (whether the recipient is married or single; number of children in the household):

  • $290, for a single individual with 2018 net income below $9,413;
  • $443, for a single individual with 2018 net income exceeding $24,712. For single individuals with income between $9,413 to $24,712, the one-time HST credit is increased from $290 by 1 cent on each dollar of 2018 income earned;
  • $580, for a couple (including common-law partner); and
  • Extra $153 for each child under the age of 19 and residing with the individual.

Application process

Like the quarterly GSTC, this benefit is managed under the income tax system. No special application is required as the payment will be calculated by CRA based on income tax returns filed for 2018.

Other notes

Families not presently receiving the GSTC may wish to confirm that CRA has a record of all minor children in their custody to ensure the calculations reflect these individuals.  Taxpayers registered with CRA’s MyAccount service can view the children CRA shows under their custody online. The legislation provides that this shall be paid in May, 2020, or such earlier month as may be designated by the Finance Minister, so it is possible that these payments will be released in April, 2020. 

Additional Canada Child Benefit Amount

Eligibility
All families eligible for monthly CCB benefits based on their 2018 personal income tax returns will receive an extra

benefit as part of their May, 2020 benefit payment. Some other families with children under age 18 who do not receive

monthly benefits will be eligible for a one-time benefit in May.

Benefits

For families receiving monthly benefits, the May benefit will be enhanced by $300 per child under age 18.  Families receiving no monthly benefits may receive a portion of this enhancement, depending on their income levels.

Application process

Like the monthly CCB, this benefit is managed under the income tax system.  No special application is required as it will be based on income tax returns filed for 2018.

Other notes

Individuals or families with children under age 18 who are not presently receiving the CCB may want to confirm that all the children in their custody are reflected on CRA’s records, to ensure the appropriate payment is computed.  Taxpayers registered with CRA’s MyAccount service can view the children CRA shows under their custody online.

25% reduction in RRIF Minimum Amount for 2020

In recognition of the substantial recent value declines in the investment markets, the minimum withdrawal from a RRIF or a money purchase pension plan for 2020 will be reduced by 25%.  No similar reduction is available for defined benefit individual pension plans.

Other – not in the Bill: Income Tax Filing and Tax Payment Extensions

COVID Deadline extensions

Canada Revenue Agency - Helping Canadians with the economic impact of the COVID-19 Pandemic

March 19, 2020

Article Source: Canada Revenue Agency Website> Helping Canadians with economic impact of the COVID-19 Pandemic

The Canada Revenue Agency (CRA) has developed a page on their website to provide updates on the fiscal measures taken by the Agency to help Canadians manage their tax and benefit affairs as this situation evolves. This page will be updated as new information is available. For more information on COVID-19, Public Health Agency of Canada’s page provides general updates and health information.

Link to webpage: Helping Canadians with economic impact of the COVID-19 Pandemic

TIME TO PRESS THE RESTART BUTTON - COVID-19 and your Business

Prime Minister Trudeau announced an $82B aid package for individuals and businesses ($27B in direct support, $55B in tax deferrals). Details provided by the government on this can be found here.

Time to Press the Restart Button

Our world, our country, our community, our business and our family have been exposed to an occurrence which has not happened before in current times. We have read about plagues in historical times and were not really expecting that a like occurrence could take place in our modern times. Whether we expected it or not we now have to deal with the impact of the COVID-19 on our lives. This is not an event which is happening in another part of the world, it is impacting the whole world and accordingly requires a whole world response.

In the ensuing months many of our clients and ourselves will be working to return to a normal world of commerce, recreation activity and enjoyable living. How long that takes to happen depends on how we deal with restricting the spreading of the virus. Assuming we get to that point, we would like to summarize for you some attitudes and actions you should consider turning these darkened days to days of brightness.

Attitude and Awareness:

All of us have probably not spent so little time with our friends, co-workers and clients. During this crisis we have been spending a lot of time with family and no schedules. Hopefully this is the silver lining in this cloud.

We will be adopting new practices once we are freed to meet with friends, co-workers and clients. How we approach them will be different and for a while we will be more aware of our surroundings and where the people, we are meeting have been.

As leaders we will have to be cognizant of the stresses our families, employees, clients and suppliers are under. We will have to be better listeners, more patient and in some situations facilitators of solutions to issues we have never dealt with before. If you do not have the ability or the answer, seek assistance from someone who can help. At the end of the day, as leaders we must always remember we are human.

For those in business, this is a simulated restart or going back to the beginning days of our businesses. It is as if we have bought a turn key operation with employees already on hand. This is the opportunity to consult with your employees and family to move ahead. Some employers when confronted with a problem sometimes find that if they listen, their employees may have the answer. Remember it is in the best interest of everyone to see businesses come out of this situation as strong or stronger than they were before. As positive as we would like to make this plan apply to everyone, there will be casualties and we should try to identify early on what may not be salvageable. Be open minded.

Operation considerations:

We would like to share with you a list of considerations for you to add to the list you probably already have.

The primary assessment you should perform is to determine how your company fits in the new economy over the next few months during the period of transition back to normalcy and how it then fits into the normalized economy. What will you be selling and to who? Is there a change in your market? Those are your primary questions which then require you to consider the following.  

You should prepare a status report as accurately as possible considering at least the following:

  • What is the balance of your cash and bank account?
  • What is the balance in your receivables their aging and collectability?
  • Inventory aging of what you have and how long it will keep you in business.
  • Capital asset and their condition. Are some of the capital assets redundant or disposable or should they be replaced. Planned and committed expenditures.
  • Investments and the stock market.
  • Accounts payable aging and ranking of who you would consider to be essential to keeping your business open and those you will pay but be a lower priority.
  • Credit card balances.
  • Government amounts owing.
  • Bank loans, lines of credit and payment commitments.
  • Status of IT software, hardware and ability to use.
  • Insurance policies (Life, critical illness, business interruption, other)
  • Signing Officers and other banking matters, Power of Attorney, wills, etc .
  • Family time.

Cash and bank account:

We encourage you to be aware of what you have available for cash and bank balance and plan how it will be utilized and replenished. You should project your cash flow on a weekly or monthly basis considering inflows such as collection of receivables, sales, etc. and outflows such as purchases, loan payments, etc. You should review your standing withdrawals from your bank accounts to determine if they should be changed or stopped.

Accounts Receivable:

During times like this managing receivables is essential. If customers, consider you not to be a critical supplier to their existence they may delay paying you to pay someone else or there will be

companies who do not survive this temporary turndown. You may have to consider being more aggressive in your collection process. You should also be more diligent at reviewing credit limits and abiding by the limits and credit terms you agree to with your customers. This is an opportunity to review your customer list to see who is there, whether you want them or not and who is not there and why not.

Inventory:

A review and aging of your inventory should be done to ensure you are properly stocked for the new economy and if necessary, dispose of old or non saleable stock to generate cash and space for good saleable stock. This may be a good time to review whether you should take on new lines or cease lines you have.

Capital Assets:

You should review the list and condition of your capital assets. There may be government programs to restart the economy and some bank financing may be at lower than normal rates. If you have redundant assets which you will never use, perhaps you should consider selling off. If you have made decisions to buy new equipment, you should review to ensure the same decision is still the proper one.

Investments:

The downturn in the stock market may have reduced the value of your company which may be a good time to do some restructuring. You should also review this to determine if a repositioning of investments should be done. There may be tax reasons to trigger losses if you have any or it may be an opportunity to get out of a stock you were going to and get in another one at a low cost. A review is in order.

 

Accounts Payable:

You should review a complete list of payables to ensure you will be able to manage their payments in a manner which would not be counterproductive to the company. A close review may also cause you to review the list and assess how and where you are spending your money. You should also project what payables will be in the next few months for inventory, expenses, etc.

Credit card Balances:

Credit cards can be a saviour to a company or the beginning of the end. You should review the balance on credit cards, rates and usage. Often credit cards are a last resort for financing and accordingly have a very high rate. With the bank leniency which will be taking place over the next few months, you may be able to do a refinancing at a reasonable rate to deal with credit cards.

Government Balances owing:

The Government of Canada is working to assist Canadians during this rough period and deferring the requirement for some payments. The key word is deferring the payment. We encourage you to manage these accounts keeping in mind these balances will have to be paid and also that directors will still be responsible for unpaid balances in the future.

Banks loans, lines of credits and payment commitments:

Indications are that the banks are prepared to assist business during this tough time. However, they would likely be looking at deferrals like CRA. It may be possible to look at refinancing and perhaps banks will be more flexible in waiving penalties or the government may assist. You may also be in the middle of refinancing or obtaining loans for new purchases. You should review the current economy to ensure this is still the right decision. Leasing may become an alternative for you to look at. Whatever your plans are, it would be good to keep your banker informed and current. You may need their support.

Employees:

The most valuable asset of any successful company is usually its employees. Many of our employees are preoccupied with issues such as childcare for school age children, worry about elderly parents or themselves. Employers are probably going to have to be flexible to accommodate the needs of their employees but on the flip side, employees should be aware of all the issues the employer is facing.

The government is in the process of laying out plans to deal with people being laid off etc. You and your employees should review the programs being rolled out to determine how you can benefit from them if need be. This is a time for employers and employees to collaborate and develop solutions which are good for the company and ultimately the security of the business owner and employee. Creative use of vacation time, scheduling, revision of business hours are examples of change which may be beneficial.

IT Software and hardware:

This is a time to take advantage and implement IT. Retailers currently prefer the use of Debit or Credit cards versus the handling of cash. Debit card costs are not significant, but the use of credit cards can be significant to the merchants. Many companies will start to use electronic transfer or e- transfer of funds, have invoices emailed instead of mailed, perhaps have more phone in orders or use online sales, etc. Many of our clients have bought the technology to improve their operations but are not using it. Many companies have younger staff who are eager to start using the technology that is available. Now is their time to shine.

A review of passwords, who has them and what they are needed for should also be done. If there have been no disruptions over the years it is not uncommon for people to not know where these are kept and for what. Annual review would be good.

Insurance Policies:

A pandemic can bring out the worst in an insurance policy. You find out what is not covered. This is an opportune time to review all your insurance to determine how adequate it is. If you had been away when the outbreak happened, what coverage would you have out of country? Do you have business interruption insurance and what does it cover? Critical illness and how does it apply in times like this, plus what coverage you have on other assets.

Signing Officers and other banking matters, Power of Attorney, wills, etc.

As part of your review you should confirm with your bank who signing officers are, what your credit facilities are, what guarantees you have, what is pledged as security, etc. A meeting with your banker to update this information may be in order.

You should also check how current your Power of Attorney and Will are. You may want to prepare a personal document checklist to update and review all of this personal information.

It may seem odd to put these in the same category but in reality, the characteristic of a person who ignores all three of these are probably the same. (Sometimes the solution people have for being the sole signing authority is to pre-sign cheques or instead of having a will, tell people what their wishes are.)

Family time:

During this time of limited public gatherings and elimination of activities, school, etc. people have become reunited with their families. Hopefully it has been a positive experience. Sometimes it takes a critical event to bring people together. Continue with the good times and become better acquainted with your family. If you show them a good balance of work and life, you may home grow your successor.

We hope you find the above to be thought provoking in helping you to develop a strategy, prepare projections, prepare a business plan or basic cash flow schedule. Having an understanding of the above and how they and timing impact on your operation are critical. If our firm can be of assistance, please reach out to us.  

CRA Media Room- Tax Tip: Don't get scammed

January 14, 2020

Article Source: Canada Revenue Agency Website> Tax Tip: Don't get scammed!

Did you get a suspicious email, phone call, letter, or text message from someone claiming to be us? Scammers pretending to be Canada Revenue Agency (CRA) employees often contact Canadians to trick them into paying fake debts.

To protect yourself from scams, it's important to know when and how the CRA might contact you. Here are some tips on how to identify if the CRA is trying to reach you:

The reasons we may call

The CRA may call if we previously wrote to you, or in any of these situations:

  • If you owe tax or money to a government program – a collections officer may call you to discuss your file and ask you to make a payment. In this case, you may need to provide some information about your financial situation.
  • If you did not file your income tax and benefit return – we may call you to ask for the missing return.
  • If you did not file your GST/HST return.
  • If we have questions about the tax and benefit documents you sent.
  • If you operate a small business, we may call to offer free tax help through our Liaison Officer program.
  • If we have questions about your new business registration.
  • If we have questions regarding a limited review of your Corporate Return.

Make sure the caller is a CRA employee before handing over money or personal information on the phone

  • You can ask for, or make a note of, the caller's name, phone number, and office location, and tell them that you want to first verify their identity.
  • You can check that the call you received was in fact from the CRA by calling:
    • 1-888-863-8657 for individual debts
    • 1-877-477-5068 for GST/HST debts
    • 1-877-548-6016 for payroll debts
    • 1-866-291-6346 for corporation debts
    • 1-866-864-5823 if the call you received was about a government program such as employment insurance or Canada Student Loan debts.

Double check the status of your tax account and make sure the CRA has your current address and email

  • Confirm your personal information is up to date or if you have a balance owing using one of our secure digital services.
  • Call 1-866-474-8272. This automated CRA phone service gives you information about your tax account balance, and your last payment amount and date. To use this service, be ready to provide your social insurance number, date of birth, and the total income you entered on line 150 of your 2018 or 2017 tax return.
  • Call 1-866-864-5823 to update your address or contact information for government programs you owe money to.

When in doubt, ask yourself

  • Why is the caller pressuring me to act immediately? Am I sure the caller works for the CRA?
  • Did I file my tax return on time? Have I received a notice saying I owe taxes?
  • Have I received an email or letter from the CRA about the subject of the call?
  • Does the CRA have my most recent contact information, such as my email and home address?
  • Is the caller asking for information I would not include on my tax return or that is not related to money I owe the CRA?
  • Did I recently send a request to change information about my business number?
  • Do I have an instalment payment due?
  • Have I received a statement of account for funds owing to a government program?

For more information visit canada.ca/taxes-fraud-prevention.

Want to report a potential scam?

To report a scam, visit antifraudcentre.ca or call 1-888-495-8501. If you think you may be the victim of fraud or you unknowingly provided personal or financial information, contact your local police service, financial institution, and credit reporting agencies.

OPEN HOUSE Shelburne

Join us to help celebrate our new office location.

Belliveau Veinotte Inc. Open house

What to expect when the Canada Revenue Agency contacts you

October 29, 2018

Article Source: Canada Revenue Agency Website> What to expect when the Canada Revenue Agency contacts you

Scammers posing as Canada Revenue Agency (CRA) employees continue to contact Canadians, misleading them into paying false debt. These persistent scammers have created fear among people who now automatically assume that any communication from someone representing the CRA is not genuine.

This tax tip will remind Canadians that the CRA does indeed contact taxpayers by phone, email and mail for legitimate reasons. The following tips will help Canadians identify legitimate communications from the CRA.

This tax tip will remind Canadians that the CRA does indeed contact taxpayers by phone, email and mail for legitimate reasons. The following tips will help Canadians identify legitimate communications from the CRA.

Read More

Don't get Scammed! - Scammers posing as CRA

Article Source: Canada Revenue Agency Website

January 29, 2018

Don’t get scammed! Beware of fraudsters claiming to be from the Canada Revenue Agency

Did you get a suspicious email, telephone call, letter or text message claiming to be from the Canada Revenue Agency (CRA)? If you’re being asked for personal information such as your credit card number, bank account number or passport number, this is a scam.

Keep these facts in mind

The Canada Revenue Agency will never:

  • ask for your personal or financial information through an unsolicited email with a link
  • ask for any kind of personal information through email or text message
  • ask for payment by prepaid credit cards or gift cards
  • leave your personal information on an answering machine
  • threaten you

Even if these messages may seem convincing, they are scams and you should never respond to them or click on any of their links.

Full article here > CRA Newsroom - Don't be scammed!

THE NEW LANDSCAPE OF "INCOME SPRINKLING"

THE NEW LANDSCAPE OF "INCOME SPRINKLING"

DECEMBER 15, 2017 RELEASE

PDF Version:  pdf The New Landscape of Income Sprinkling (231 KB) pdf
(498 KB)

Introduction

When the July 18, 2017 consultation paper was released by the Department of Finance, it became apparent the proposed tax changes would have a significant impact on business owners across Canada. Following thousands of submissions from business owners, advisors and other constituents, we have seen our Liberal government pull back on the limitation to the capital gains exemption and changes with respect to related party transactions, at least for now. Further, the changes to passive investments within a private corporation have been tabled until the 2018 Federal budget, at which point our Liberal government has stated further commentary will be provided. However, it was confirmed the changes to "income sprinkling" would be pursued, with an effective date of January 1, 2018.

After much anticipation for the revisions to the "income sprinkling" legislation, the Department of Finance released revised draft legislation on December 13, 2017 and Canada Revenue Agency (CRA) released guidelines with respect to the implementation of this new legislation.

Please note the items discussed below are based on proposed amendments only and have not been introduced to legislation at this particular point in time. However, these proposals will more likely than not be passed as legislation, at which point the legislation will become effective January 1, 2018. The below analysis has been entirely based on CRA's release on December 13, 2017 labelled "Guidance on the application of the split income rules for adults".

Overview

The proposed amendments’ aim to expand the definition of Tax on Split Income (TOSI), which is a concept the Income Tax Act of Canada (ITA) has contained historically but only applied to minor child (under age 18), and has commonly been referred to as "Kiddie Tax". Where income is classified as TOSI, it automatically becomes taxable at the highest marginal tax rate, which is currently 54% in Nova Scotia. As such, it is prudent planning to ensure income is not caught under the TOSI rules.

The expanded definition of TOSI captures all dividends (including deemed dividends resulting from the redemption of shares) and interest, but not salary, paid by a private corporation to an individual from a related business and certain capital gains, unless one of the provided exclusions are met. In very general terms, a "related business" is essentially a business carried on by a related person. For the purposes of the ITA, related persons include parents, spouses, siblings, children and grandchildren, but does not include aunts, uncles and cousins. Each of the exclusions from TOSI have been briefly outlined below, following by various examples to illustrate the application of these exclusions.

Read More

Submission to the Department of Finance regarding the proposed tax changes

September 25, 2017

Attached is a copy of our firms submission to the Department of Finance with respect to the proposed tax changes as outlined in the Consultation Paper dated July 18, 2017. Our submission includes a detailed analysis of the implications of these changes, outlines various considerations which should be addressed by Finance and also provides suggestions for changes which could be made.

pdf Submission to Finance (FINAL FULL SUBMISSION) (438 KB)

Locations:

Halifax

Suite 204, 620 Nine Mile Drive, Bedford, NS

Chester

4171 Highway 3, Chester NS

Bridgewater

11 Dominion Street, Bridgewater NS

Liverpool

7B Henry Hensey Dr., Liverpool NS

Shelburne

167 Water Street, Shelburne NS

Barrington Passage

3289 Highway 3, Barrington Passage NS