Now that we are reaching the end of the tax year, it’s an excellent time to review your finances. We’ve listed below some of the critical areas to consider and provide you with useful guidelines.
We have divided our tax planning tips into five sections:
Tax Deadlines for 2020 Savings
December 31, 2020:
-
If you reached the age of 71 in 2020, you can’t contribute to your RRSP after this date
-
Use up your TFSA contribution room
-
Contribute to an RESP to get the Canadian Education Savings Grant (CESG) and the income-tested Canada Learning Bond (if eligible).
-
Contribute to an RDSP to get the Canada Disability Savings Grant (CDSG) and the income-tested Canada Disability Savings Bond (if eligible).
-
Medical expenses
-
Investment counsel fees, interest and other expenses relating to investments
-
Some payments for child and spousal support
-
Fees for union and professional memberships
-
Student loan interest payments
-
Deductible legal fees
-
Charitable gifts
-
Political contributions
January 30, 2021
March 1, 2021
-
Contributions to provincial labour-sponsored venture capital corporations
-
RRSP Repayment under Home Buyers Plan or Lifelong Learning Plan
-
Deductible contributions to a personal or spousal RRSP
Individual Tax Issues
To help Canadians deal with financial hardships due to job loss because of COVID-19, the Canadian government introduced several benefit programs. If you received any of these benefits, you should be aware of the tax ramifications.
The Canada Emergency Response Benefit (CERB) was the first benefit program issued by the government and ran until September 26, 2020. If you received the CERB at all during 2020, the government will issue you at T4A, showing how much money you received from the CERB program. You must then declare that as income when filing your 2020 income tax return. Since no tax was taken off at the source, be sure to put aside money to pay for potential income taxes on your CERB income.
As of September 27, 2020, the government offered three replacement benefit programs:
-
Canada Recovery Benefit (CRB)
This is for people impacted by COVID-19 who work but are not eligible for EI (e.g. self-employed).
-
Canada Recovery Sickness Benefit (CRSB)
This is for people who are employed cannot work due to COVID-19 and do not have access to paid sick leave.
-
Canada Recovery Caregiving Benefit (CRCB)
This is for people who must miss work to care for a family member who has COVID-19.
For all three of these programs, the government will be withholding 10% in taxes upfront, but you may end up owing extra tax, depending on the rest of your income for 2020, so it’s important to set extra money aside for taxes.
Also, there is a unique condition for the CRB only. If you make over $38,000 in 2020 (excluding the CRB), you will have to pay back the CRB at a rate of 50 cents for each dollar of CRB you earned above the threshold.
If you paid interest on an eligible student loan in 2020, you can claim a non-refundable tax credit in the amount of interest you paid by December 31. In addition, you should be aware that student loan payments were frozen for six months – from March 30 to September 30. No interest accrued on student loans during that period.
Family Tax Issues
-
Check your eligibility for the Canada Child Benefit
(CCB)
To receive the Canada Child Benefit in 2021/22, you need to file your tax returns for 2020 as the benefit is calculated using your family income from the previous year. Eligibility for the CCB depends on set criteria such as your family’s income, how many children you have, and how old they are. You may qualify for a full or partial amount, depending on whether you have full custody or shared custody.
-
Consider family income splitting
The CRA offers a prescribed low-interest rate on family loans. Therefore, it makes sense to consider setting up an income splitting loan arrangement with your family members. If you do this, you can potentially lock in a family loan at a low-interest rate of 1% and then invest the borrowed money into a higher return investment while benefitting from your family member’s lower tax status. Don’t forget to adhere to the Tax on Split Income rules.
Managing Your Investments
-
Use up your TFSA contribution room
If you can, it’s worth contributing the full $6,000 to your TFSA for 2020. You can also contribute more (up to $69,500) if you are 29 or older and haven’t made any previous TFSA contributions.
-
Contribute to a Registered Education Savings Plan (RESP)
The Registered Education Savings Plan (RESP) is a savings plan for parents and others to save for a child’s education. The Canada Education Savings Grant (CESG) will match up to 20% of your contributions up to a maximum of $2,500.
That means the CESG can add a maximum of $500 to an RESP each year. The grant room accumulates until your child turns 17. Therefore, any unused CESG amounts for the current year are automatically carried forward for possible use in the future years.
The income-tested Canada Learning Bond (CLB) is paid directly to a child’s RESP by the Canadian government to low-income families. No personal contributions are required to receive the CLB.
-
Contribute to a Registered Disability Savings Plan (RDSP)
The Registered Disability Savings Plan (RDSP) is a savings plan for parents and others to save for the financial security of a person who is eligible for the Disability Tax Credit (DTC). The government will pay a matching Canada Disability Savings Grant (CDSG) up to 300% – depending on the beneficiary’s adjusted family net income and amount contributed.
Also, low-income Canadians with disabilities may be eligible for a Canada Disability Savings Bond (CDSB). If you qualify, it will be paid directly to your RDSP.
The government will pay matching grants or bonds into the RSDP up to and including the end of the year the recipient turns 49. Be aware that there is a 10-year carry-forward of CDSG and CDSB entitlements.
-
Donate securities to charity
Donating by year-end will provide you with tax savings. If you donate eligible securities or mutual funds, capital gains tax does not apply, and you can receive a tax receipt for their full market value. Also, the charity gets the full value of the securities.
-
Think about selling any investments with unrealized capital losses
It might be worth doing this before year-end to apply the loss against any net capital gains achieved during the last three years. The last trading date for 2020 for Canadian and US publicly traded stocks will be Tuesday December 29th in order to record the gain or loss in the 2020 taxation year.
Conversely, if you have investments with unrealized capital gains that cannot be offset with capital losses, it may be worth selling them after 2020 to be taxed on the income the following year.
-
Consider the timing of purchasing of certain non-registered investments
Suppose you are considering purchasing an interest-bearing investment like a guaranteed investment certificate (GIC) with a maturity date of one year or more. In that case, you may consider delaying the purchase to the following year, so you don’t have to pay tax on accrued interest until 2021. You should also consider this with mutual funds that make taxable distributions before the end of 2020, consider delaying this until early 2021. Don’t pay taxes earlier than necessary.
-
Check if you have investments in a corporation
The new passive investment income rules apply to tax years from 2018 onwards. They state that the small business deduction is reduced for companies with between $50,000 and $150,000 of investment income. Therefore, the small business deduction has entirely stopped for corporations that earn a passive investment income of more than $150,000.
Note – At a provincial level, both Ontario and New Brunswick do not follow the federal rules to limit access to the small business deduction.
Retirement Planning
-
Make the most of your RRSP
The deadline for making contributions to your RRSP for the year 2020 is March 1, 2021. The deduction limit for 2020 is limited to 18% of the income you earned in 2020, to a maximum of $27,230. This maximum amount is impacted by the following:
-
Any pension adjustment
-
Any previous unused RRSP contribution room
-
Any pension adjustment reversal.
Remember that deducting your RRSP contribution reduces your after-tax cost of making said contribution.
-
Check when your RRSP is due to end
If you reach the age of 71 during 2020, you must wind up your RRSP this year. You must make your final contribution to it by December 31, 2020.
-
Convert to RRIF before year-end
If you turned 65 during 2020 or are already older than 65, you’re entitled to a pension credit that can fully or partly offset the tax on the first $2,000 of eligible income annually. Consider setting up an RRIF before year-end to pay out $2,000 annually if you don’t have any other eligible pension income.
If you have any questions about your taxes for 2020, contact us – we can help you!
Personal Tax Planning Tips – End of 2020 Tax Year
/in 2020 Only, blog, Charitable Gifting, Coronavirus, Coronavirus - Associates, Coronavirus - Practice Owners, Coronavirus - Retired, Coronavirus - Retiring, Coronavirus - Students, disability, disability insurance, Family, financial advice, financial planning, health benefits, pension plan, RDSP, Registered Education Savings Plan, RRSP, Tax, Tax Free Savings Account /by Bryan WilsonNow that we are reaching the end of the tax year, it’s an excellent time to review your finances. We’ve listed below some of the critical areas to consider and provide you with useful guidelines.
We have divided our tax planning tips into five sections:
Tax Deadlines
Individual tax issues
Family tax issues
Managing your investments
Retirement planning
Tax Deadlines for 2020 Savings
December 31, 2020:
If you reached the age of 71 in 2020, you can’t contribute to your RRSP after this date
Use up your TFSA contribution room
Contribute to an RESP to get the Canadian Education Savings Grant (CESG) and the income-tested Canada Learning Bond (if eligible).
Contribute to an RDSP to get the Canada Disability Savings Grant (CDSG) and the income-tested Canada Disability Savings Bond (if eligible).
Medical expenses
Investment counsel fees, interest and other expenses relating to investments
Some payments for child and spousal support
Fees for union and professional memberships
Student loan interest payments
Deductible legal fees
Charitable gifts
Political contributions
January 30, 2021
Interest on intra-family loans
The interest you must pay on employer loans to reduce your taxable benefit
March 1, 2021
Contributions to provincial labour-sponsored venture capital corporations
RRSP Repayment under Home Buyers Plan or Lifelong Learning Plan
Deductible contributions to a personal or spousal RRSP
Individual Tax Issues
To help Canadians deal with financial hardships due to job loss because of COVID-19, the Canadian government introduced several benefit programs. If you received any of these benefits, you should be aware of the tax ramifications.
The Canada Emergency Response Benefit (CERB) was the first benefit program issued by the government and ran until September 26, 2020. If you received the CERB at all during 2020, the government will issue you at T4A, showing how much money you received from the CERB program. You must then declare that as income when filing your 2020 income tax return. Since no tax was taken off at the source, be sure to put aside money to pay for potential income taxes on your CERB income.
As of September 27, 2020, the government offered three replacement benefit programs:
Canada Recovery Benefit (CRB)
This is for people impacted by COVID-19 who work but are not eligible for EI (e.g. self-employed).
Canada Recovery Sickness Benefit (CRSB)
This is for people who are employed cannot work due to COVID-19 and do not have access to paid sick leave.
Canada Recovery Caregiving Benefit (CRCB)
This is for people who must miss work to care for a family member who has COVID-19.
For all three of these programs, the government will be withholding 10% in taxes upfront, but you may end up owing extra tax, depending on the rest of your income for 2020, so it’s important to set extra money aside for taxes.
Also, there is a unique condition for the CRB only. If you make over $38,000 in 2020 (excluding the CRB), you will have to pay back the CRB at a rate of 50 cents for each dollar of CRB you earned above the threshold.
If you paid interest on an eligible student loan in 2020, you can claim a non-refundable tax credit in the amount of interest you paid by December 31. In addition, you should be aware that student loan payments were frozen for six months – from March 30 to September 30. No interest accrued on student loans during that period.
Family Tax Issues
Check your eligibility for the Canada Child Benefit
(CCB)
To receive the Canada Child Benefit in 2021/22, you need to file your tax returns for 2020 as the benefit is calculated using your family income from the previous year. Eligibility for the CCB depends on set criteria such as your family’s income, how many children you have, and how old they are. You may qualify for a full or partial amount, depending on whether you have full custody or shared custody.
Consider family income splitting
The CRA offers a prescribed low-interest rate on family loans. Therefore, it makes sense to consider setting up an income splitting loan arrangement with your family members. If you do this, you can potentially lock in a family loan at a low-interest rate of 1% and then invest the borrowed money into a higher return investment while benefitting from your family member’s lower tax status. Don’t forget to adhere to the Tax on Split Income rules.
Managing Your Investments
Use up your TFSA contribution room
If you can, it’s worth contributing the full $6,000 to your TFSA for 2020. You can also contribute more (up to $69,500) if you are 29 or older and haven’t made any previous TFSA contributions.
Contribute to a Registered Education Savings Plan (RESP)
The Registered Education Savings Plan (RESP) is a savings plan for parents and others to save for a child’s education. The Canada Education Savings Grant (CESG) will match up to 20% of your contributions up to a maximum of $2,500.
That means the CESG can add a maximum of $500 to an RESP each year. The grant room accumulates until your child turns 17. Therefore, any unused CESG amounts for the current year are automatically carried forward for possible use in the future years.
The income-tested Canada Learning Bond (CLB) is paid directly to a child’s RESP by the Canadian government to low-income families. No personal contributions are required to receive the CLB.
Contribute to a Registered Disability Savings Plan (RDSP)
The Registered Disability Savings Plan (RDSP) is a savings plan for parents and others to save for the financial security of a person who is eligible for the Disability Tax Credit (DTC). The government will pay a matching Canada Disability Savings Grant (CDSG) up to 300% – depending on the beneficiary’s adjusted family net income and amount contributed.
Also, low-income Canadians with disabilities may be eligible for a Canada Disability Savings Bond (CDSB). If you qualify, it will be paid directly to your RDSP.
The government will pay matching grants or bonds into the RSDP up to and including the end of the year the recipient turns 49. Be aware that there is a 10-year carry-forward of CDSG and CDSB entitlements.
Donate securities to charity
Donating by year-end will provide you with tax savings. If you donate eligible securities or mutual funds, capital gains tax does not apply, and you can receive a tax receipt for their full market value. Also, the charity gets the full value of the securities.
Think about selling any investments with unrealized capital losses
It might be worth doing this before year-end to apply the loss against any net capital gains achieved during the last three years. The last trading date for 2020 for Canadian and US publicly traded stocks will be Tuesday December 29th in order to record the gain or loss in the 2020 taxation year.
Conversely, if you have investments with unrealized capital gains that cannot be offset with capital losses, it may be worth selling them after 2020 to be taxed on the income the following year.
Consider the timing of purchasing of certain non-registered investments
Suppose you are considering purchasing an interest-bearing investment like a guaranteed investment certificate (GIC) with a maturity date of one year or more. In that case, you may consider delaying the purchase to the following year, so you don’t have to pay tax on accrued interest until 2021. You should also consider this with mutual funds that make taxable distributions before the end of 2020, consider delaying this until early 2021. Don’t pay taxes earlier than necessary.
Check if you have investments in a corporation
The new passive investment income rules apply to tax years from 2018 onwards. They state that the small business deduction is reduced for companies with between $50,000 and $150,000 of investment income. Therefore, the small business deduction has entirely stopped for corporations that earn a passive investment income of more than $150,000.
Note – At a provincial level, both Ontario and New Brunswick do not follow the federal rules to limit access to the small business deduction.
Retirement Planning
Make the most of your RRSP
The deadline for making contributions to your RRSP for the year 2020 is March 1, 2021. The deduction limit for 2020 is limited to 18% of the income you earned in 2020, to a maximum of $27,230. This maximum amount is impacted by the following:
Any pension adjustment
Any previous unused RRSP contribution room
Any pension adjustment reversal.
Remember that deducting your RRSP contribution reduces your after-tax cost of making said contribution.
Check when your RRSP is due to end
If you reach the age of 71 during 2020, you must wind up your RRSP this year. You must make your final contribution to it by December 31, 2020.
Convert to RRIF before year-end
If you turned 65 during 2020 or are already older than 65, you’re entitled to a pension credit that can fully or partly offset the tax on the first $2,000 of eligible income annually. Consider setting up an RRIF before year-end to pay out $2,000 annually if you don’t have any other eligible pension income.
If you have any questions about your taxes for 2020, contact us – we can help you!
Applications for the new Canada Emergency Rent Subsidy starts today!
/in blog, Coronavirus, Coronavirus - Practice Owners /by Bryan WilsonFor businesses, non-profits and charities facing uncertainty and economic challenges due to COVID-19, the Government of Canada is now taking applications for the new Canada Emergency Rent Subsidy (CERS). The CERS delivers direct and targeted rent support without the need to claim assistance through landlords and provides:
up to 65% of rent for businesses, charities and non-profits impacted by COVID-19.
an additional 25% Lockdown Support during a public health lockdown order.
From the canada.ca website:
Canada Emergency Rent Subsidy (CERS)
Canadian businesses, non-profit organizations, or charities who have seen a drop in revenue due to the COVID-19 pandemic may be eligible for a subsidy to cover part of their commercial rent or property expenses, starting on September 27, 2020, until June 2021.
This subsidy will provide payments directly to qualifying renters and property owners, without requiring the participation of landlords.
If you are eligible for the base subsidy, you may also be eligible for lockdown support if your business location is significantly affected by a public health order for a week or more.
Eligibility criteria
To be eligible to receive the rent subsidy, you must meet all four of the following criteria – you:
Meet at least one of these conditions:
You had a CRA business number on September 27, 2020
OR
You had a payroll account on March 15, 2020, or another person or partnership made payroll remittances on your behalf
OR
You purchased the business assets of another person or partnership who meets condition 2 above, and have made an election under the special asset acquisition rules
These special asset acquisition rules are the same for the Canada Emergency Wage Subsidy (CEWS).
OR
You meet other prescribed conditions that might be introduced
Note: there are no prescribed conditions at this time
If you don’t have a business number but you qualify under condition b or c, you will need to set one up before you are able to apply for CERS. You do not need a payroll account to apply for CERS.
Are an eligible business, charity, or non-profit (eligible entity)
Check which types of businesses, charities, or non-profits are eligible
If your business, charity, or non-profit is related to another eligible entity, you may be considered an “affiliated entity”. This may affect your calculations for the subsidy.
Learn more about affiliated entities
Experienced a drop in revenue
Your drop in revenue is calculated by comparing your eligible revenue during the reference period with your eligible revenue from a previous period (baseline revenue).
There is no minimum revenue drop required to qualify for the subsidy. The rate your revenue has dropped is only used to calculate how much subsidy you receive for these periods.
Calculate your revenue drop online
After you have read about the expenses you can claim, you can use the online calculator to find your revenue drop while calculating how much subsidy you may receive.
OR
Read about the calculation
You can read the in-depth details of how the revenue drop is calculated.
Check what counts as eligible revenue
A CERS application must be filed no later than 180 days after the end of a claim period.
Have eligible expenses
To apply for CERS, you must have a qualifying property. Only certain expenses you pay for qualifying properties are eligible for CERS.
Learn about qualifying properties and which expenses you can claim
The full details of the CERS can be found at: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-rent-subsidy.html
Accessing Corporate Earnings
/in blog, Business Owners, corporate, life insurance /by Bryan WilsonOne of the financial planning issues that business owners face is how to access their corporate earnings in a tax efficient way.
There are 5 standard methods:
Salary
Dividend
Shareholder Loans
Transfer Personal Assets
Income Splitting
There are also unique ways utilizing life insurance and critical illness insurance to access your retained earnings. Please contact us to learn how we can get more money in your pocket than in the government’s.
Applications for Canada Recovery Benefit now open!
/in 2020, blog, Coronavirus, Coronavirus - Associates, Coronavirus - Practice Owners /by Bryan WilsonThe Canada Recovery Benefit (CRB) is now open for applications.
As described on the Canada.ca website, the CRB gives income support to employed and self-employed individuals who are directly affected by COVID-19 and are not entitled to Employment Insurance (EI) benefits. The CRB is administered by the Canada Revenue Agency (CRA).
This program replaces the Canada Emergency Response Benefit (CERB) and, if eligible, provides $1,000 ($900 after taxes withheld) for a 2-week period.
If your situation continues past 2 weeks, you will need to apply again. You may apply up to a total of 13 eligibility periods (26 weeks) between September 27, 2020 and September 25, 2021.
Eligibility
To be eligible for the CRB, you must meet all the following conditions for the 2-week period you are applying for:
During the period you’re applying for:
you were not working for reasons related to COVID-19 OR
you had a 50% reduction in your average weekly income compared to the previous year due to COVID-19
You did not apply for or receive any of the following:
Canada Recovery Sickness Benefit (CRSB)
Canada Recovery Caregiving Benefit (CRCB)
short-term disability benefits
workers’ compensation benefits
Employment Insurance (EI) benefits
Québec Parental Insurance Plan (QPIP) benefits
You were not eligible for EI benefits
You reside in Canada
You were present in Canada
You are at least 15 years old
You have a valid Social Insurance Number (SIN)
You earned at least $5,000 in 2019, 2020, or in the 12 months before the date you apply from any of the following sources:
employment income (total or gross pay)
net self-employment income (after deducting expenses)
maternity and parental benefits from EI or similar QPIP benefits
You have not quit your job or reduced your hours voluntarily on or after September 27, 2020, unless it was reasonable to do so
You were seeking work during the period, either as an employee or in self-employment
You have not turned down reasonable work during the 2-week period you’re applying for
You need all of the above to be eligible for the CRB.
New Canada Emergency Rent Subsidy | Wage Subsidy extended | CEBA additional $20,000 loan
/in 2020, blog, Coronavirus, Coronavirus - Practice Owners /by Bryan WilsonOn October 9th, the Federal Government announced the new Canada Emergency Rent Subsidy (CERS), the extension of the Canada Emergency Wage Subsidy (CEWS) and additional loans through the Canada Emergency Business Account (CEBA).
New Canada Emergency Rent Subsidy for businesses
The Canada Emergency Rent Subsidy (CERS) is the replacement for the Canada Emergency Commercial Rent Assistance (CECRA).
When launched, the new program will allow businesses to apply directly for rent relief through CRA. The original CECRA faced criticism because it required landlords to apply for the assistance and absorb a 25% reduction in rent which may explain the low uptake.
Prime Minister Justin Trudeau stated that the new rent subsidy will be available for businesses that continue to experience revenue decline due to COVID-19. From Canada.ca:
The new Canada Emergency Rent Subsidy, which would provide simple and easy-to-access rent and mortgage support until June 2021 for qualifying organizations affected by COVID-19. The rent subsidy would be provided directly to tenants, while also providing support to property owners. The new rent subsidy would support businesses, charities, and non-profits that have suffered a revenue drop, by subsidizing a percentage of their expenses, on a sliding scale, up to a maximum of 65 per cent of eligible expenses until December 19, 2020. Organizations would be able to make claims retroactively for the period that began September 27 and ends October 24, 2020.
A top-up Canada Emergency Rent Subsidy of 25 per cent for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65 per cent subsidy. This follows a commitment in the Speech from the Throne to provide direct financial support to businesses temporarily shut down as a result of a local public health decision.
Allowing businesses to apply for the rent subsidy directly will make obtaining support for those in need as straightforward and simple as possible.
The new CERS is set to be available until June 2021.
Canada Emergency Wage Subsidy extended to June 2021
The Canada Emergency Wage Subsidy (CEWS) will continue to provide wage relief for employers until June 2021. As well, the subsidy will remain at the current rate of up to a maximum of 65% of eligible wages until December 19th and will not decrease on a sliding scale as previously planned.
Canada Emergency Business Account – additional $20,000 interest-free loan
The Canada Emergency Business Account (CEBA) will be expanded to provide an additional $20,000 loan with $10,000 forgivable if repaid by December 31, 2022. Additionally, the application deadline for CEBA is being extended to December 31, 2020. Businesses applying for the loan will be required to prove they have faced income loss caused by COVID-19.
Applications for Canada Recovery Sickness Benefit and Caregiving Benefit starts today!
/in blog, Coronavirus, Coronavirus - Associates, Coronavirus - Practice Owners, Coronavirus - Students /by Bryan WilsonStarting October 5, 2020, the Government of Canada will be accepting online applications for the Canada Recovery Sickness Benefit (CRSB) and the Canada Recovery Caregiving Benefit (CRCB).
From Canada.ca:
Canada Recovery Sickness Benefit (CRSB)
The Canada Recovery Sickness Benefit (CRSB) gives income support to employed and self-employed individuals who are unable to work because they’re sick or need to self-isolate due to COVID-19, or have an underlying health condition that puts them at greater risk of getting COVID-19. The CRSB is administered by the Canada Revenue Agency (CRA).
If you’re eligible for the CRSB, you can receive $500 ($450 after taxes withheld) for a 1-week period.
If your situation continues past 1 week, you will need to apply again. You may apply up to a total of 2 weeks between September 27, 2020 and September 25, 2021.
Eligibility:
To be eligible for the CRSB, you must meet all the following conditions for the 1-week period you are applying for:
You are unable to work at least 50% of your scheduled work week because you’re self-isolating for one of the following reasons:
You are sick with COVID-19 or may have COVID-19
You are advised to self-isolate due to COVID-19
Who can advise you to self-isolate
You have an underlying health condition that puts you at greater risk of getting COVID-19.
Who can advise you to stay at home due to your health condition
You did not apply for or receive any of the following for the same period:
Canada Recovery Benefit (CRB)
Canada Recovery Caregiving Benefit (CRCB)
short-term disability benefits
workers’ compensation benefits
Employment Insurance (EI) benefits
Québec Parental Insurance Plan (QPIP) benefits
You reside in CanadaDefinition
You were present in Canada
You are at least 15 years old
You have a valid Social Insurance Number (SIN)
You earned at least $5,000 (before deductions) in 2019, 2020, or in the 12 months before the date you apply from any of the following sources:
employment income
self-employment income
maternity and parental benefits from EI or similar QPIP benefits
What counts towards the $5,000
You are not receiving paid leave from your employer for the same period
You need all of the above to be eligible for the CRSB.
Canada Recovery Caregiving Benefit (CRCB)
The Canada Recovery Caregiving Benefit (CRCB) gives income support to employed and self-employed individuals who are unable to work because they must care for their child under 12 years old or a family member who needs supervised care. This applies if their school, regular program or facility is closed or unavailable to them due to COVID-19, or because they’re sick, self-isolating, or at risk of serious health complications due to COVID-19. The CRCB is administered by the Canada Revenue Agency (CRA).
If you’re eligible for the CRCB, your household can receive $500 ($450 after taxes withheld) for each 1-week period.
If your situation continues past 1 week, you will need to apply again. You may apply up to a total of 26 weeks between September 27, 2020 and September 25, 2021.
Eligibility:
To be eligible for the CRCB, you must meet all the following conditions for the 1-week period you are applying for:
You are unable to work at least 50% of your scheduled work week because you are caring for a family member
You are caring for your child under 12 years old or a family member who needs supervised care because they are at home for one of the following reasons:
Their school, daycare, day program, or care facility is closed or unavailable to them due to COVID-19
Their regular care services are unavailable due to COVID-19
The person under your care is:
sick with COVID-19 or has symptoms of COVID-19
at risk of serious health complications if they get COVID-19, as advised by a medical professional
self-isolating due to COVID-19
Who can advise a person under your care to self-isolate
You did not apply for or receive any of the following for the same period:
Canada Recovery Benefit (CRB)
Canada Recovery Sickness Benefit (CRSB)
short-term disability benefits
workers’ compensation benefits
Employment Insurance (EI) benefits
Québec Parental Insurance Plan (QPIP) benefits
You reside in CanadaDefinition
You were present in Canada
You are at least 15 years old
You have a valid Social Insurance Number (SIN)
You earned at least $5,000 (before deductions) in 2019, 2020, or in the 12 months before the date you apply from any of the following sources:
employment income
self-employment income
maternity and parental benefits from EI or similar QPIP benefits
What counts towards the $5,000
You are the only person in your household applying for the benefit for the weekWhat is considered a household for this benefit
You are not receiving paid leave from your employer for the same period
You need all of the above to be eligible for the CRCB.
Canada Recovery Benefit (CRB)
The CRB provides $500 per week for up to 26 weeks for workers who have stopped working or had their income reduced by at least 50% due to COVID-19, and who are not eligible for Employment Insurance (EI).
Applications will open on October 12
10 Essential Decisions for Business Owners
/in blog, Business Owners, Estate Planning, financial advice, financial planning, Group Benefits, health benefits, Insurance, Investment, Tax /by Bryan Wilson10 Essential Decisions for Business Owners
Business owners are busy… they are busy running a successful business, wearing lots of hats and making a ton of decisions. We’ve put together a list of 10 essential decisions for every business owner to consider; from corporate structure to retirement and succession planning:
Best structure for your business (ex. Sole Proprietor, Corporation, Partnership)
Reduce taxes
What to do with surplus cash
Build employee loyalty
Reduce risk
Deal with the unexpected
Retire from your business
Sell your business
Keep your business in the family
What to do when you’re retired
As a financial advisor, we are uniquely positioned to help business owners, talk to us about your situation and we can provide the guidance you need.
Throne Speech: Recovery Plan Highlights
/in blog, Coronavirus, Coronavirus - Associates, Coronavirus - Practice Owners, Coronavirus - Students, disability /by Bryan WilsonOn September 23rd, in a speech delivered by Governor General Julie Payette, Prime Minister Justin Trudeau outlined the Federal government’s priorities focused on four foundations:
Fighting the pandemic and saving lives;
Supporting people and businesses through the emergency “as long as it lasts, whatever it takes”;
“Building back better” by creating jobs and strengthening the middle class;
Standing up for Canadian values, including progress on reconciliation, gender equality, and systemic racism.
Below, we highlight the support programs that help those Canadians who are struggling financially due to the pandemic.
Canada Emergency Wage Subsidy extended to next summer
The Canada Wage Subsidy (CEWS) will be extended to summer 2021. Under new program criteria, businesses with ANY revenue decline will be eligible. However, the amount of the subsidy will be based on the revenue drop rather than the original 75%.
Canada Recovery Benefit increased to $500/week
The day after the Throne Speech, in a bid for opposition support, the federal government announced it will increase the new Canada Recovery Benefit (CRB) to $500/week for up to 26 weeks.
In order to qualify for this program, Canadians must be looking for work and had stopped working or had their income reduced by 50 per cent or more due to COVID-19, but are still making some money on their own.
Canada Recovery Sickness Benefit
The Canada Recovery Sickness Benefit (CRSB) will provide $500/week for up to 2 weeks for workers who are unable to work because they are sick or must isolate due to COVID-19.
Canada Recovery Caregiving Benefit
The Canada Recovery Caregiver Benefit will provide $500/week for up to 26 weeks per household to eligible workers who cannot work because they must provide care to children or family members due to the closure of schools, day cares or care facilities.
Creating a new Canadian Disability Benefit
The government pledged to bring in a new Canadian Disability Benefit (CDB) that will be modelled after the guaranteed income supplement (GIS) for seniors.
The CRB, CRSB, CRCB and CDB are pending the passage of legislation in the House of Commons and Senate.
CEBA extended to October 31st. Expanded to include more businesses.
/in 2020 Only, blog, Coronavirus, Coronavirus - Practice Owners, Debt /by Bryan WilsonOn August 31st, Deputy Prime Minister and Minister of Finance Chrystia Freeland announced the extension of the Canada Emergency Business Account (CEBA) to October 31st, 2020. This will give small businesses 2 additional months to apply for the $40,000 loan.
In addition, the Federal Government said it was working with financial institutions to make the CEBA program available to those with qualifying payroll or non-deferrable expenses that have so far been unable to apply due to not operating from a business banking account.
Apply online at the financial institution your business banks with:
TD: https://www.td.com/ca/en/personal-banking/covid-19/small-business-relief/
Scotiabank: https://www.scotiabank.com/ca/en/personal/scotia-support/latest-updates/business-banking/small-business/supporting-our-customers-is-our-top-priority.html
BMO: https://www.bmo.com/small-business/financial-relief-loc/#/login?PID=MBLBC&language=en
CIBC: https://www.cibc.com/en/business/advice-centre/covid-19/canada-emergency-business-account/now-available.html
RBC:https://www.rbc.com/covid-19/business.html
National Bank: https://www.nbc.ca/forms/business/covid-emergency-account.html
HSBC: https://www.hsbc.ca/1/2//applications/business-apply
Canadian Western Bank: https://www.cwbank.com/en/news/2020/canada-emergency-business-account-now-available (via phone/email)
Do you REALLY need life insurance?
/in blog, Business Owners, Family, Individuals, life insurance /by Bryan WilsonYou most likely do, but the more important question is, What kind? Whether you’re a young professional starting out, a devoted parent or a successful CEO, securing a life insurance policy is probably one of the most important decisions you will have to make in your adult life. Most people would agree that having financial safety nets in place is a good way to make sure that your loved ones will be taken care of when you pass away. Insurance can also help support your financial obligations and even take care of your estate liabilities. The tricky part, however, is figuring out what kind of life insurance best suits your goals and needs. This quick guide will help you decide what life insurance policy is best for you, depending on who needs to benefit from it and how long you’ll need it.
Permanent or Term?
Life insurance can be classified into two principal types: permanent or term. Both have different strengths and weaknesses, depending on what you aim to achieve with your life insurance policy.
Term life insurance provides death benefits for a limited amount of time, usually for a fixed number of years. Let’s say you get a 30-year term. This means you’ll only pay for each year of those 30 years. If you die before the 30-year period, then your beneficiaries shall receive the death benefits they are entitled to. After the period, the insurance shall expire. You will no longer need to pay premiums, and your beneficiaries will no longer be entitled to any benefits.
Term life insurance is right for you if you are:
The family breadwinner. Death benefits will replace your income for the years that you will have been working, in order to support your family’s needs.
A stay-at-home parent. You can set your insurance policy term to cover the years that your child will need financial support, especially for things that you would normally provide as a stay-at-home parent, such as childcare services.
A divorced parent. Insurance can cover the cost of child support, and the term can be set depending on how long you need to make support payments.
A mortgagor. If you are a homeowner with a mortgage, you can set up your term insurance to cover the years that you have to make payments. This way, your family won’t have to worry about losing their home.
A debtor with a co-signed debt. If you have credit card debt or student loans, a term life insurance policy can cover your debt payments. The term can be set to run for the duration of the payments.
A business owner. If you’re a business owner, you may need either a term or permanent life insurance, depending on your needs. If you’re primarily concerned with paying off business debts, then a term life insurance may be your best option.
Unlike term life insurance, a permanent life insurance does not expire. This means that your beneficiaries can receive death benefits no matter when you die. Aside from death benefits, a permanent life insurance policy can also double as a savings plan. A certain portion of your premiums can build cash value, which you may “withdraw” or borrow for future needs. You can do well with a permanent life insurance policy if you:
…Have a special needs child. As a special needs child will most likely need support for health care and other expenses even as they enter adulthood. Your permanent life insurance can provide them with death benefits any time within their lifetime.
…Want to leave something for your loved ones. Regardless of your net worth, permanent life insurance will make sure that your beneficiaries receive what they are entitled to. If you have a high net worth, permanent life insurance can take care of estate taxes. Otherwise, they will still get even a small inheritance through death benefits.
…Want to make sure that your funeral expenses are covered. Final expense insurance can provide coverage for funeral expenses for smaller premiums.
…Have maximized your retirement plans. As permanent life insurance may also come with a savings component, this can also be used to help you out during retirement.
…Own a business. As mentioned earlier, business owners may need either permanent or term, depending on their needs.
A permanent insurance policy can help pay off estate taxes, so that the successors can inherit the business worry-free. Different people have different financial needs, so there is no one-sized-fits-all approach to choosing the right insurance policy for you. Talk to us now, and find out how a permanent or term life insurance can best give you security and peace of mind.