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Proposed $2,000/month Canada Emergency Response Benefit
March 25, 2020
10:04 am
Norman1
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In Government introduces Canada Emergency Response Benefit to help workers and businesses, the federal government is proposing a taxable $2,000/month benefit for "wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI)."

The proposed Canada Emergency Response Benefit (CERB) will cover March 15, 2020 until October 3, 2020.


The EI system was not designed to process the unprecedented high volume of applications received in the past week. Given this situation, all Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not, would be able to receive the CERB to ensure they have timely access to the income support they need.

Canadians who are already receiving EI regular and sickness benefits as of today would continue to receive their benefits and should not apply to the CERB. If their EI benefits end before October 3, 2020, they could apply for the CERB once their EI benefits cease, if they are unable to return to work due to COVID-19. Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply. Canadians who are eligible for EI regular and sickness benefits would still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.

March 25, 2020
12:31 pm
canadian.100
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Trudeau doubled the amount of the Stimulus Package.
The stock market loved it - it has really climbed back today.
Tax hikes/ benefit freezes in Canada are for sure once we get through this pandemic.

March 25, 2020
2:30 pm
Bill
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Useful link, Norman1. Minister Qualtrough just told Evan Soloman on tv it's not taxable so it's very helpful to have the link which indicates in fact it's taxable.

March 25, 2020
4:52 pm
Norman1
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There could still be debate within cabinet about whether or not the CERB will be taxable.

Maybe the fine print is not final yet.

Another possibility is that she meant no taxes would be withheld from the CERB payments.

March 25, 2020
5:30 pm
Doug
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Norman1 said
There could still be debate within cabinet about whether or not the CERB will be taxable.

Maybe the fine print is not final yet.

Another possibility is that she meant no taxes would be withheld from the CERB payments.  

Interesting, Norman. Both are likely possibilities. FWIW, B.C.'s Emergency Benefit for Workers is non-taxable. sf-cool

Cheers,
Doug

March 25, 2020
6:53 pm
Loonie
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If recipients aren't working from at least March to October, they probably won't be paying much or possibly any tax, regardless of whether it's taxable.

March 26, 2020
9:15 am
Norman1
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Bill C-13 received royal assent yesterday.

Final version is at Bill C-13 (Royal Assent). The Canada Emergency Response Benefit Act is in Part 2 of the bill.

Not everyone will get the $2,000/month CERB benefit. The benefit is only intended for workers, as defined in the Act.

Initially, "worker" is defined as follows. Need to have at least $5,000 of certain income:

worker means a person who is at least 15 years of age, who is resident in Canada and who, for 2019 or in the 12-month period preceding the day on which they make an application under section 5, has a total income of at least $5,000 — or, if another amount is fixed by regulation, of at least that amount — from the following sources:

(a) employment;

(b) self-employment;

(c) benefits paid to the person under any of subsections 22(1), 23(1), 152.‍04(1) and 152.‍05(1) of the Employment Insurance Act; and

(d) 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.‍ (travailleur)

March 26, 2020
11:03 am
Bill
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Norman1, does Part 1 section 4 mean the minimum rrif withdrawal amount for 2020 is reduced by 25%? (Doug, I'm not old enough to have a rrif.)

March 26, 2020
11:21 am
Bill
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It appears the benefit is taxable, but Part 1 2(1) appears to give you a related additional credit, with some kind of clawback calculation for higher earners, on your income taxes for 2020. Do you agree, Norman1?

Also Part 4 has some reference to CDIC limit changes until October - ?

March 26, 2020
11:32 am
pooreva
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How are you going to prove you lost job due to virus?

What if you lost your job not by your fault (reorg, etc.) at this particular time?

March 26, 2020
11:40 am
Doug
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pooreva said
How are you going to prove you lost job due to virus?

What if you lost your job not by your fault (reorg, etc.) at this particular time?  

You don't have to prove that it was due to COVID-19; it just has to be during the COVID-19 epidemic. If there were other reasons for your termination, that would be noted as the reason the ROE. That's key. Most employers, though, knowing how receptive governments are, would be inclined to terminate, temporarily or permanently, due to shortage of work related to COVID-19.

Even in "dismissed" terminations, though, you can still be granted EI benefits, particularly if you were dismissed because of a two-way not getting along with your manager or supervisor. In such cases, the Service Canada representative merely interviews both sides, and usually awards benefits. In cases of gross absenteeism or theft, those probably would not be paid benefits.

Cheers,
Doug

March 26, 2020
11:48 am
toto
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My niece worked 3 jobs in Calgary to keep her bills paid.
One kept her on, while the other 2 gave her a ROE.
Their must be lots of situations like that with young people. She didn't think she'd get relief because she has her 1 job, so wasn't going to try .

March 26, 2020
11:52 am
Yatti420
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It's Justin Trudeau folks.. I'll believe it when the cheques enter my acounts....

March 26, 2020
12:59 pm
Doug
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toto said
My niece worked 3 jobs in Calgary to keep her bills paid.
One kept her on, while the other 2 gave her a ROE.
Their must be lots of situations like that with young people. She didn't think she'd get relief because she has her 1 job, so wasn't going to try .  

Tell her to try, toto. EI is based on the loss of the income—one of which she's lost due to the COVID-19 economic devastation. If she doesn't qualify for EI, she can always apply for the CERB. 🙂

Cheers,
Doug

March 26, 2020
1:14 pm
Loonie
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Service Canada is hiring.

March 26, 2020
1:27 pm
Norman1
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toto said
My niece worked 3 jobs in Calgary to keep her bills paid.
One kept her on, while the other 2 gave her a ROE.
Their must be lots of situations like that with young people. She didn't think she'd get relief because she has her 1 job, so wasn't going to try.

She is correct. She won't qualify for the CERB because she won't have a month with 14 consecutive days of no employment income, as required by subsection 6(1):

Eligibility

6 (1) A worker is eligible for an income support payment if

(a) the worker, whether employed or self-employed, ceases working 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; and

(b) they do not receive, in respect of the consecutive days on which they have ceased working,

(i) subject to the regulations, income from employment or self-employment,

(ii) benefits, as defined in subsection 2(1) of the Employment Insurance Act,

(iii) allowances, money or other benefits paid to the worker under a provincial plan because of pregnancy or in respect of the care by the worker of one or more of their new-born children or one or more children placed with them for the purpose of adoption, or

(iv) any other income that is prescribed by regulation.

Exclusion
(2) An employed worker does not cease work for the purpose of paragraph (1)‍(a) if they quit their employment voluntarily.

March 26, 2020
1:33 pm
Norman1
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Bill said
Norman1, does Part 1 section 4 mean the minimum rrif withdrawal amount for 2020 is reduced by 25%? (Doug, I'm not old enough to have a rrif.)

It appears the benefit is taxable, but Part 1 2(1) appears to give you a related additional credit, with some kind of clawback calculation for higher earners, on your income taxes for 2020. Do you agree, Norman1?

Also Part 4 has some reference to CDIC limit changes until October - ?

I think the summary at the beginning of the bill answers those questions:

SUMMARY

Part 1 implements, as part of the response to the coronavirus disease 2019 (COVID-19), certain income tax measures by

(a) introducing a one-time additional payment under the GST/HST tax credit;
(b) providing temporary additional amounts under the Canada Child Benefit;
(c) reducing required minimal withdrawals from registered retirement income funds by 25% for 2020; and
(d) providing eligible small employers a temporary wage subsidy for a period of three months.

Part 2 enacts the Canada Emergency Response Benefit Act to authorize the making of income support payments to workers who suffer a loss of income for reasons related to the coronavirus disease 2019.

Part 4 amends the Canada Deposit Insurance Corporation Act to allow the Minister of Finance to increase the deposit insurance coverage limit until September 30, 2020.

March 26, 2020
4:18 pm
Bill
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Summary doesn't say anything about income tax effects, that's in the legislation details.

Also, the summary does not indicate whether the cdic limits have changed, though the wording suggests not as it just says the Finance Minister is allowed to. Not sure why that's needed, though, as I'd assume that's the case anyway. It's also kind of odd, what do cdic limits have to do with this virus scare?

March 26, 2020
5:53 pm
Norman1
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I think that additional tax credit you saw, Bill, was the additional GST/HST tax credit.

Summary says the amendments to the CDIC Act empowers the Minister of Finance to temporarily boost the CDIC coverage limit without going through Parliament (House of Commons ⟹ Senate ⟹ Royal Assent) again, until end of September. That power has not been exercised yet. So, CDIC limit is still $100,000:

Duty to insure
12 The Corporation shall insure each deposit with a member institution except

(a) a deposit that is not payable in Canada or in Canadian currency;

(b) a deposit in respect of which Her Majesty in right of Canada would be a preferred claimant; and

(c) so much of any one deposit as exceeds one hundred thousand dollars the amount set out in subsection 12.‍01(1).

Amount
12.‍01 (1) The amount referred to in paragraph 12(c) is one hundred thousand dollars, unless the Minister determines a greater amount, in which case the amount referred to in that paragraph is the amount that the Minister determines.

Publication in Canada Gazette
(2) As soon as feasible after making a determination under subsection (1), the Minister shall publish the amount in the Canada Gazette.

My guess is that the power would be used to neutralize any attempts to cause a run on one of the big banks that depositors routinely have over $100,000 deposited in. I'm thinking of those sleazy short sellers who tried to bring down Home Trust by spreading rumours and half-truths.

March 26, 2020
7:23 pm
Bill
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I believe you are correct, Norman1, section 122.5 of the ITA deals with the gst/hst credit. So based on the Finance Dept notice saying the benefit is taxable I'm going with that.

Service Canada is hiring - where did you see that info, Loonie? I might be interested in that, for a little while anyway.

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