blog Archives - Ali Raza Jaffer, Chartered Accountant Mississauga, Greater Toronto Area

December 20, 2022
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Canadian Tax News – CPA Canada

Category : blog

Your source for the latest Canadian tax news and updates on changing tax laws. Working collaboratively with the Canada Revenue Agency (CRA) we aim to bring clarity on pressing tax questions and COVID-19 tax updates.

Note: The updates listed below are our latest and most relevant news items. To access older stories, please visit our news archives page.

LATEST NEWS

December 12, 2022

In case you missed it

As we wrap up 2022, here is a summary of some significant tax developments that took place in the second half of the year. (See our July 19, 2022 In case you missed it news item for the last time we provided this round-up.) For ease of access, we’ve included the original news items referenced here in the attached PDF.

Reporting requirements for trusts – The original proposals introduced in 2018 were expanded to include bare trust arrangements. The application of the rules was recently deferred and will now apply to trust taxation years ending after December 30, 2023. See our November 7, 2022 news item.

Mandatory reporting – The effective date of the Reportable Transaction and Notifiable Transaction proposals will be delayed until the date the implementation bill receives Royal Assent. The Uncertain Tax Treatment proposals will apply to taxation years beginning after 2022 as previously announced. See our November 4, October 6, and August 22, 2022 news items.

Tax-Free First Home Savings Account (FHSA) – As part of Budget 2022, the government introduced the new FHSA and, subsequently, revised legislation on the new program was released as part of Bill C-32 (Fall Economic Statement Implementation Act, 2022). Contrary to the original program details in Budget 2022, the latest version of the legislation allows account holders to make use of both the Home Buyers’ Plan and the FHSA to fund the same qualifying home purchase. See our November 11, 2022 news item as well as our blog.

Canada Revenue Agency (CRA) Campaign Focusing on Personal Service Businesses (PSB) – The CRA announced a new campaign focused on PSBs earlier this year. The campaign concentrates primarily on industries that commonly hire service providers who may operate a PSB including trucking, IT consulting, accounting, construction and catering. We understand that the campaign is still underway.

Electronic Notices of Assessments (ENOA) – In Budget 2021, the government proposed legislation that would allow the CRA to provide a notice of assessment (NOA) electronically to an individual who filed their personal income tax return electronically, and has authorized that notices or other communications may be made available in this manner. The original proposals would have affected EFILERs as they would be required to provide NOAs to their clients not using CRA’s My Account. It is our understanding that any changes to the process for issuing personal NOAs will be deferred until at least 2024. See our August 22, 2022 news item.

Excessive Interest and Financing Expenses Limitations – Revised draft legislation was released and is subject to a consultation period that ends on January 6, 2023. It is now proposed that these rules will apply to taxation years beginning on or after October 1, 2023.

In addition to these major developments, some other notable developments that occurred in the latter part of 2022 included:

Canada Emergency Business Account (CEBA) – Eligibility notices and tax treatment of repayments (November 16, 2022 news item)
Updated CRA taxable benefit guidance on social events, gifts and awards (November 15, 2022 news item)
The 2022 Fall Economic Statement that included updates on a number of tax measures and, in particular, a brief update on the OECD Pillar 1 and 2 initiatives (November 4, 2022 news item)
New questions and answers on Form T1134 (October 26, 2022 news item)
New process for EFILE authorization requests for My Business Account access (October 7, 2022 news item)
Questions on the new Form T2054 – Election for a Capital Dividend Under Subsection 83(2) (September 12, 2022 news item)

We know that many are watching for developments related to Bill C-208 that dealt with intergenerational transfers, but there have been no updates at the time of writing.

We’ll continue posting important and relevant news updates on this page so be sure to bookmark this page and check back often. Happy holidays and all the best for 2023.

July 18, 2020
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COVID-19 Update for Individuals & Business Owners

Category : blog

July 18, 2020,
Dear Clients & Friends,

I wanted to take this opportunity to provide you with the most up to date changes to the CRA benefits related to COVID-19. Note that all my COVID-19 updates are updated on our website at www.arjcpa.ca

Please connect and follow the links to my social media at your convenience (Facebook, Twitter, LinkedIn, Instagram) to stay fully updated on COVID-19 and tax planning tips for individuals & businesses.

For Individuals

Canada Emergency Response Benefit (CERB) Update:

The CERB has been extended and is now available from March 15, 2020 to October 3, 2020. Here are the eligibility requirements.
Residing in Canada, who are at least 15 years old.
To receive the CERB, you may not earn more than $1,000 for a period of at least 14 consecutive days within the initial four week period of your claim or $1,000 in total for each subsequent claim.
Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.
Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
Who have not quit their job voluntarily.
If individuals receive non-eligible dividends from the business, you could be eligible for the CERB as long as you meet the requirements of having earned a minimum of $5K income in 2019. Non-eligible dividends also count toward the $1000 income threshold for a benefit period.

If you require assistance with the application process, please contact our office.

Full details are available on the CRA Website at: https://www.canada.ca/en/department-finance/economic-response-plan.html#individuals

Canada Emergency Student Benefit (CESB):

Eligible students include postsecondary students currently in school, those planning to start postsecondary school in September or those who graduated in December 2019.
Working students earning less than $1,000 per month are also eligible.
The eligibility period covers May 1st to Aug 29th.
The benefit amount is $1,250 per month.
If you are supporting another person or if the student has a disability, the benefit is up to $2,000 per month.

Full details are available on the CRA Website at: https://www.canada.ca/en/revenue-agency/services/benefits/emergency-student-benefit.html

Tax Deadlines

Personal Tax: Please ensure you have made your tax payment prior to September 1st to avoid penalties and interest. As per CRA “You will not be charged late-filing penalties or interest if your 2019 individual (T1) income tax returns are filed and payments are made prior to September 1, 2020″.
Further details are available in the following link: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html
If you have not filed your personal tax return, there is still some time. You may send the documents digitally (either via dropbox, google drive, box or secured email).

For Businesses

The Canada Emergency Business Account (CEBA) Update:

The qualification requirements are as follows:
- The Borrower is a Canadian operating a business as of March 1, 2020.
- The Borrower has a CRA business number and has filed a 2018 or 2019 tax return.
- Demonstrate that your organization has paid between $20,000 to $1.5 million in total payroll in 2019.
- Applicants without at least $20,000 in payroll in 2019 will have to demonstrate having eligible non-deferrable expenses between $40,000 and $1,500,000 in 2020. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. Expenses will be subject to verification and audit by the Government of Canada.
- As of June 26, 2020, businesses eligible for CEBA now include owner-operated small businesses that do not have a payroll, sole proprietors receiving business income directly, as well as family-owned corporations remunerating in the form of dividends rather than payroll.
The government will then provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.
Repaying the balance of the loan on or before December 31, 2022 will result in a loan forgiveness of 25 percent (up to $10,000).
Business owners can apply for support from the Canada Emergency Business Account through their banks and credit unions.
Further information is available at: https://ceba-cuec.ca/

Canada Emergency Commercial Rent Assistance (CECRA):

The program will provide financial assistance to eligible small businesses by reducing their rent by 75% for the months of April, May, June & July 2020.
This will be achieved by providing forgivable loans to qualifying commercial property owners.
The CECRA forgivable loans will cover 50% of the monthly rent, with the property owner absorbing 25%, and the tenant responsible for paying the remaining 25%.
The loans will only be forgiven if the property owner reduces the tenant’s rent by at least 75% for all three months and also agrees to not evict the tenant.
In order to be eligible, a small business must pay less than $50,000 per month in rent and have either ceased operations, or, had their revenues reduced by a minimum of 70% compared to their pre-COVID-19 revenues.
Please contact our office if you require assistance in applying for the CECRA
Further information is available at: https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business.

Canada Emergency Wage Subsidy (CEWS) Update:

Yesterday, on July 17th, 2020, the government announced proposed changes to the CEWS. Here are the key points that are still “proposed”.
- Allow the extension of the CEWS until December 19, 2020, including redesigned program details until November 21, 2020.
- Make the subsidy accessible to a broader range of employers by including employers with a revenue decline of less than 30 per cent and providing a gradually decreasing base subsidy to all qualifying employers. This would help many struggling employers with less than a 30-per-cent revenue loss get support to keep and bring back workers, while also ensuring those who have previously benefited could still qualify, even if their revenues recover and no longer meet the 30 per cent revenue decline threshold.
- Introduce a top-up subsidy of up to an additional 25 per cent for employers that have been most adversely affected by the pandemic. This would be particularly helpful to employers in industries that are recovering more slowly.
- Provide certainty to employers that have already made business decisions for July and August by ensuring they would not receive a subsidy rate lower than they would have had under the previous rules.
For further details, please see the link: https://www.canada.ca/en/department-finance/news/2020/07/supporting-canadian-workers-and-businesses-with-a-redesigned-canada-emergency-wage-subsidy.html
Prior to this new update yesterday, as a Canadian employer whose business has been affected by COVID-19, you may be eligible for a subsidy of 75% of employee retroactive from March 15, 2020, to August 29, 2020. This will allow employers to re-hire workers previously laid off as a result of COVID-19.
Applications for period 4 (June 7 to July 4) are currently open.
The program will be available through My Business Account or through the Represent a Client service for Accountants
There will be an automatic audit for all employers to ensure compliance with the program.
Please contact our office for assistance and we will prepare the calculations and applications for you.

Full details on the calculator and process are available at: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html

Tax Deadlines:

Corporate Tax: Filing deadlines for corporations that would otherwise have a filing deadline on May 31, June 30, July 31st, or August 31st 2020 has been extended to September 1st, 2020. Tax balance and installments that would normally be due on or after March 18 and before September 1st, 2020 has been extended to September 1st, 2020.
Further details are available in the following link:
https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html

Advisory, Tax Planning and Cash Flow Planning

Whether you are an individual tax payer, sole proprietor or corporate business owner, many of us have experienced a challenging few months. As part of our commitment and service delivery to our clients, with the recent pandemic, we have been working with our clients on the following:

Business Financing which includes
- Bank loan proposals & applications
- Lines of credit applications
- Applications to various government loan programs in response to the COVID-19 pandemic
- Preparation of business plans and cash flow projections
Cash Flow Planning & Budgeting
Tax Planning and Corporate Restructuring
Net Worth Analysis and Planning
Strategies to achieve your short term and long term goals

Please see our website for further details at https://www.arjcpa.ca/business-advisory-services/
Wishing you and your families a safe and enjoyable remainder of the summer!
Stay Safe!

April 22, 2020
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COVID-19 Updates for Individuals & Business Owners

Category : blog

April 22, 2020,
Dear Clients & Friends,

I wanted to take this opportunity to provide you with the most up to date changes to the CRA benefits related to COVID-19 since my last update on April 10. Note that all my COVID-19 updates are updated on our website at www.arjcpa.ca

Furthermore, please connect and follow the links to my social media at your convenience (Facebook, Twitter, LinkedIn, Instagram) to stay fully updated on COVID-19 and tips & tax planning for individuals & businesses.

For Individuals

Canada Emergency Response Benefit (CERB) Update:

On April 15, CRA announced the following changes to the eligibility rules:

Allows people to earn up to $1,000 per month while collecting the CERB.
Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.
Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
If individuals receive non-eligible dividends from the business, you could be eligible for the CERB as long as you meet the requirements of having earned a minimum of $5K income in 2019. Non-eligible dividends also count toward the $1000 income threshold for a benefit period.

If you require assistance with the application process, please don’t hesitate to contact us.

Full details are available on the CRA Website at: https://www.canada.ca/en/department-finance/economic-response-plan.html#individuals

Canada Emergency Student Benefit (CESB):

This morning, Prime Minister Trudeau announced benefits for students:

Eligible students include postsecondary students currently in school, those planning to start postsecondary school in September or those who graduated in December 2019
Working students earning less than $1,000 per month are also eligible
The eligibility period covers May 1st to Aug 31st.
The benefit amount is $1,250 per month
If you are supporting another person or if the student has a disability, the benefit is up to $1,750 per month
The government will also be creating 76,000 new jobs specifically for post-secondary students within sectors contributing to the fight against COVID-19

Income Tax Reminder

A gentle reminder to submit your personal tax documents if you have not done so for us to be able to complete and file your tax returns by the extended deadline of June 1st. You many send the documents digitally (either via dropbox, google drive, box or secured email).

For Businesses

The Canada Emergency Business Account (CEBA) Update:

Last week the government made some changes to CEBA.
The new qualification requirements have been extended to allow for organizations to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019.
The government will then provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.
Repaying the balance of the loan on or before December 31, 2022 will result in a loan forgiveness of 25 percent (up to $10,000).
Business owners can apply for support from the Canada Emergency Business Account through their banks and credit unions.

Further information is available at: https://ceba-cuec.ca

Canada Emergency Commercial Rent Assistance (CECRA):

Last week the government announced its intent to establish assistance to commercial property owners who will in turn lower or forgo the rent of small businesses for April, May and June
This will include assistance and/or forgivable loans
Implementation of the program will be in partnership with the provincial governments
Details will be provided by the government soon

Canada Emergency Wage Subsidy (CEWS) Update:

As a Canadian employer whose business has been affected by COVID-19, you may be eligible for a subsidy of 75% of employee wages for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020. This will allow employers to re-hire workers previously laid off as a result of COVID-19.
CRA has launched a calculator as of yesterday to determine the amount of the subsidy.
Applications will be accepted as of April 27, 2020
The program will be available through My Business Account or through the Represent a Client service for Accountants
There will be an automatic audit for all employers to ensure compliance with the program
The government hopes to process the applications by May 5th. They expect at least a million applications

Full details on the calculator and process are available at: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html

As trusted advisors, we realize the application process may be a little complicated and are therefore working with our clients to assist with the applications. As these applications will play a critical role to your cash flows, we recommend that you try and apply as soon as possible. Please contact us at your convenience and we would be happy to provide this service.

Stay Safe!

April 10, 2020
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Recent Updates on the COVID 19 Economic Measures

Category : blog

April 10, 2020

Dear Clients and Friends:

Wishing you all a Happy Easter long weekend! I hope you will take this opportunity to reflect and spend precious time with your families as we continue to fight the pandemic. In my latest email, I will be outlining and summarizing the most recent update by Prime Minister Trudeau that he outlined on Thursday. This is the latest update further to my email on April 2, 2020.

As a way of protecting jobs through the pandemic, Prime Minister Justin Trudeau, proposed the new Canada Emergency Wage Subsidy. This wage subsidy aims to prevent further job losses, encourage employers to re-hire workers previously laid off as a result of COVID-19, and help better position Canadian companies and other employers to more easily resume normal operations following the crisis. While the Government has designed the proposed wage subsidy to provide generous and timely financial support to employers, it was done with the expectation that employers will do their part by using the subsidy in a manner that supports the health and well-being of their employees. The application process will take up to 3 weeks (revised from the previously announced 3 to 6 weeks). They will be setting up a microsite to allow for applications.

Revisions & Updates to Previously Announced Economic Measures: For further details, please refer to the CRA website at https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html

1. Canada Emergency Wage Subsidy (CEWS):

Change in the reference period and revenue reduction percentage for the 75% Wage Subsidy Eligibility (decrease of at least 15 per cent of their revenue in March 2020 and 30 per cent for the April & May (see Eligible Periods)).

A. Are You Eligible?

Eligible employers would include individuals, taxable corporations, partnerships, non‑profit organizations and registered charities. This subsidy would be available to eligible employers that have experienced at least decrease in their revenue (see Periods of Eligibility). In applying for the subsidy, employers would be required to attest to the decline in revenue. Note the revision to the eligibility (previously identified as a 30% decrease for all periods, but now revised to a 15% reduction in revenue in March and a 30% reduction in April and May; please see the revised the chart and revised reference periods)

Eligible Periods

Claiming period	Reference period for eligibility	Required Reduction in Revenue
March 15 – April 11	March 2020 over: March 2019 or Average of January and February 2020	15%
April 12 – May 9	April 2020 over: April 2019 or Average of January and February 2020	30%
May 10 – June 6	May 2020 over: May 2019 or Average of January and February 2020	30%

For eligible employers established after February 2019, eligibility would be determined by comparing monthly revenues to a reasonable benchmark.

B. Subsidy Calculation:

An employer’s revenue for eligibility would be based on revenue from business carried on in Canada earned from arm’s-length sources. Revenue would be calculated using the employer’s normal accounting method, and would exclude revenues from extraordinary items and amounts on account of capital.

The government subsidy for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:

75% of remuneration paid, up to a maximum benefit of $847 per week or,
The lesser of:
- the amount of remuneration paid, up to a maximum benefit of $847 per week or
- 75% of the employee’s pre-crisis weekly remuneration

The government has now stated that pre-crisis remuneration for a given employee will be based on the average weekly remuneration paid between January 1 and March 15, 2020 inclusively, excluding any seven-day periods that the employee did not receive remuneration.

Employers will also be eligible for a subsidy of up to 75 per cent of salaries and wages paid to new employees.

A special rule will apply to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration. There would be no overall limit on the subsidy amount that an eligible employer may claim. Employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.

C. Employers would be allowed to calculate their revenues under the accrual method or the cash method, but not a combination of both. Once the accounting method is chosen, it must be used throughout the program.

D. 100% Refund for certain employer paid contributions to EI and CPP Premiums. This refund would cover 100 per cent of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim for the CEWS for those employees.

E. Eligible employees:

An eligible employee is an individual who is employed in Canada.
Eligibility for the CEWS of an employee’s remuneration, will be limited to employees that have not been without remuneration for more than 14 consecutive days in the eligibility period, i.e., from March 15 to April 11, from April 12 to May 9, and from May 10 to June 6.
This rule replaces the previously announced restriction that an employer would not be eligible to claim the CEWS for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit.

F. Application Process:

Eligible employers would be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly.

G. 10% Temporary Wage Subsidy:

The Temporary Wage Subsidy of $25,000 per employer and $1,375 per employee continues to be available. For employers that are eligible for both the Canada Emergency Wage Subsidy and the 10 per cent wage subsidy for a period, any benefit from the 10 per cent wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period.

2. Support For Students

100% Wage subsidy to the Canada Summer Jobs Program for Employers providing up to 100% to small businesses. These subsidies are extended up until and end date of employment of February 28, 2021 and will apply to both part time and full time employees.

3. Special rules for charities

1. The government also advised that registered charities and non-profit organizations will have additional flexibility for the revenue decrease calculation. Specifically, these employers will include most forms of revenue in the calculation, excluding revenues from non-arm’s length persons.
2. These organizations would be allowed to choose whether or not to include revenue from government sources as part of the calculation. Once chosen, the same approach would have to apply throughout the program period

4. Work Sharing Program:

A program that helps employers and employees avoid layoffs when there is a temporary decrease in business activity beyond the control of the employer. The program provides Employment Insurance (EI) benefits to eligible employees who agree to reduce their normal working hours and share the available work while their employer recovers. Work-Sharing is an agreement between employers, employees and the Government of Canada.

1. 1. Extension of the maximum possible duration of an agreement from 38 weeks to 76 weeks
  2. EI benefits received by employees through the work sharing program will reduce the benefit that their employee is entitled to receive under the subsidy

5. Major Banks:

Are now accepting applications for the Canada Emergency Business Account. Please log in to your business bank account for further details. If you require assistance on T4 summaries or your Payroll account number, please contact our office.

6. Compliance Process & Penalties:

The government confirmed that employers that do not use the subsidy as intended would face “stiff and severe” penalties. In particular, the government advised that employers that engage in artificial transactions to reduce revenue to claim the subsidy would be subject to a penalty equal to 25% of the value of the subsidy claimed, and must also fully repay the subsidy that was improperly claimed. The Finance Minister also noted in his news conference on April 8, 2020, that employers who create artificial transactions would effectively be subject to a fine of up to 225% of the amount received under the subsidy. In addition to this fine, the Finance Minister also noted that such employers may be punished by up to five years in prison.

We are committed to serving our valued clients during this difficult time and our team is ready to assist you via phone email or video conferencing.

Stay Safe!

April 2, 2020
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COVID 19 Summary of Canadian Economic Measures

Category : blog

April 2, 2020
Dear Clients and Friends:
I hope your families are staying safe and positive during the challenging times we are all facing. I have outlined and summarized latest update on the economic measures that the government of Canada has provided. As outlined by Bill Morneau yesterday, the government is investing $71B to assist small businesses during the pandemic.

As a way of protecting jobs through the pandemic, Prime Minister Justin Trudeau, proposed the new Canada Emergency Wage Subsidy. This wage subsidy aims to prevent further job losses, encourage employers to re-hire workers previously laid off as a result of COVID-19, and help better position Canadian companies and other employers to more easily resume normal operations following the crisis. While the Government has designed the proposed wage subsidy to provide generous and timely financial support to employers, it was done with the expectation that employers will do their part by using the subsidy in a manner that supports the health and well-being of their employees. The application process will be available in about 3 to 6 weeks as per Minister Morneau’s address yesterday. They will be setting up a microsite to allow for applications. This would provide a 75% temporary 12 week wage subsidy to eligible employers, retroactive to March 15, 2020. The maximum amount eligible per employee is $847 per week up 75% of employees’ remuneration paid. I have listed further details below under Subsidy Calculation.

Are You Eligible?

Eligible Periods

Claiming period	Reference period for eligibility
March 15 – April 11	March 2020 vs March 2019
April 12 – May 9	April 2020 vs April 2019
May 10 – June 6	May 2020 vs May 2019

For eligible employers established after February 2019, eligibility would be determined by comparing monthly revenues to a reasonable benchmark.
Subsidy Calculation:

The government subsidy for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:

75% of remuneration paid, up to a maximum benefit of $847 per week or,
The lesser of:

The amount of remuneration paid, up to a maximum benefit of $847 per week or
75% of the employee’s pre-crisis weekly remuneration

(Further guidance with respect to the definition of pre-crisis weekly remuneration for a given employee will be provided by CRA in the coming days)
Employers will also be eligible for a subsidy of up to 75 per cent of salaries and wages paid to new employees.
A special rule will apply to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration. There would be no overall limit on the subsidy amount that an eligible employer may claim. Employers must make their best effort to top-up employees’ salaries to bring them to pre-crisis levels.

Periods of Eligibility:

Eligibility would generally be determined by the change in an eligible employer’s monthly revenues, year-over-year, for the calendar month in which the period began. The amount of wage subsidy received by the employer in a given month would be ignored for the purpose of measuring year-over-year changes in monthly revenues. For example, if revenues in March 2020 were down 50% compared to March 2019, the employer would be allowed to claim the Canadian Emergency Wage Subsidy (as calculated above) on remuneration paid between March 15 and April 11, 2020.

Application Process:

Eligible employers would be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s My Business Account portal as well as a web-based application. Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly.

Compliance Process & Penalties:
The government said that employers that do not use the subsidy as intended would face “stiff and severe” penalties. In particular, employers that do not meet the eligibility requirements will have to repay subsidy amounts. New anti-abuse rules will ensure that the subsidy is not inappropriately obtained and employees are paid the amounts they are owed. Penalties may also apply to taxpayers who make fraudulent claims.

10% Temporary Wage Subsidy:

Canadian Emergency Response Benefit (CERB):

The government has indicated that the subsidy is not available for remuneration paid to an employee in a week that falls within a four-week period for which the employee is also eligible for the Canadian Emergency Response Benefit. However, employers who are not eligible for the Canada Emergency Wage Subsidy would still be able to furlough employees who will receive up to $2,000 a month.

Taxable Income:

The wage subsidy received by an employer would be considered government assistance and be included in the employer’s taxable income. Assistance received under either wage subsidy would reduce the amount of remuneration expenses eligible for other federal tax credits calculated on the same remuneration.

For further details, please refer to the CRA website at https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html
We are committed to serving our valued clients during this difficult time and our team is ready to assist you via phone email or video conferencing.

Stay Safe!

March 29, 2020
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2019 Income Tax Reminder & COVID 19 Update – Tax Filing Deadline Extended to June 1st

Category : blog

March 29, 2020,
Dear Clients & Friends:

Hope you and your families are staying safe amid COVID 19. Our office is open as one of the essential businesses in Ontario with our staff on a rotating work from home schedule. With the tax filing deadline extended to June 1^st, please send us your files digitally (either via dropbox, google drive, box or secured email). We are committed to continue serving you during these challenging times. Please call me if you have any questions on the government emergency financial measures, your personal taxes or your corporate taxes.

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COVID 19 Financial Measures Updates

Prime Minister Trudeau provided a brief update on some further tax measures on Friday March 27, 2020. Full details will be released later this week and I will update everyone accordingly. Here are some of the updates that Trudeau and CRA will be providing:

For small businesses, the government announced that it would increase the temporary wage subsidy to 75% of eligible remuneration (from 10% that it had initially announced on March 23)
Deferral of GST/HST remittances for small businesses. Although it is still unclear if this applies to the actual filing of the HST returns, taxpayers will now have until June 30, 2020 to make the following payments:
1. Monthly filers — Remittances collected for the February, March and April 2020 reporting periods.
2. Quarterly filers — Remittances collected for the January 1, 2020 through March 31, 2020 reporting period.
3. Annual filers whose GST/HST return or instalment are due in March, April or May 2020 — Remittances collected and owing for their previous fiscal year and instalments of GST/HST for the filer’s current fiscal year.
The government will provide interest-free loans of up to $40,000 for one year to eligible small businesses and not-for-profits through the new Canada Emergency Business; with possibly $10,000 of the loan to be forgiven. Please let me know if you would like me to connect you with the appropriate banking professional to assist you with the process.
The Bank of Canada is cutting their interest rates by a further 0.25%.

Please connect on the links to my social media at your convenience (Facebook, Twitter, Linkedin, Instagram) to stay fully updated on COVID 19 and tips and tax planning for individuals and businesses.

March 26, 2020
0

CRA & Ontario COVID 19 Update

Category : blog

Dear Clients & Friends,

We wanted to update you on the latest updates from the federal & provincial governments announced yesterday.

1. Federal Government

The full details are in the Link: https://www.canada.ca/en/department-finance/economic-response-plan/covid19-individuals.html#new_canada_emergency_response_benefit

The main change introduced impacting taxpayers are summarized below:

Support for people facing unemployment: The new Canada Emergency Response Benefit

The federal government will provide a taxable benefit of $2,000 a month for up to 4 months to:

Workers who must stop working due to COVID19 and do not have access to paid leave or other income support.
Workers who are sick, quarantined, or taking care of someone who is sick with COVID-19.
Working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
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.
Wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
The Canada Emergency Response Benefit will be accessible through a secure web portal starting in early April. Applicants will also be able to apply via an automated telephone line or via a toll-free number.

2. Ontario Government

The full details are in Link: https://budget.ontario.ca/2020/marchupdate/action-plan.html

The main changes introduced that impact taxpayers and their families are summarized below:

- $3.7 billion to support people and jobs, including:
  - $75 million in urgent additional support for 194,000 low-income seniors by proposing to double the Guaranteed Annual Income System (GAINS) maximum payment to $166 per month for individuals and $332 per month for couples, for six months starting in April 2020;
  - Helping families pay for extra costs associated with school and daycare closures during the COVID‑19 outbreak by providing a one-time $200 payment per child up to 12 years of age, and $250 for those with special needs including kids enrolled in private schools;
  - Providing six months of Ontario Student Assistance Program (OSAP) loan and interest accrual relief, in coordination with the federal government’s measures, leaving more money in the pockets of student borrowers;
  - Making electricity bills more affordable for eligible residential, farm and small business consumers through a $1.5 billion increase in electricity cost relief compared to the 2019 Budget. The government is also setting electricity prices for time-of-use customers at the lowest rate, known as the off-peak price, 24 hours a day for 45 days, to support ratepayers in their increased daytime electricity usage as a result of measures to contain the COVID‑19 outbreak;
  - $9 million in direct support to families for their energy bills by expanding eligibility for the Low income Energy Assistance Program (LEAP) and ensuring that their electricity and natural gas services are not disconnected for nonpayment during the COVID‑19 outbreak;
  - Cutting taxes by $355 million for about 57,000 employers through a proposed temporary increase to the Employer Health Tax (EHT) exemption;
  - Helping to support regions lagging in employment growth with a proposed new Corporate Income Tax credit — the Regional Opportunities Investment Tax Credit; and
  - Supporting the timely delivery of critical food and supplies by amending a regulation that restricted delivery trucks from operating during off-peak hours.
- $10 billion in support for people and businesses to improve cash flows by:
  - Providing a five-month interest and penalty-free period to make payments for the majority of provincially administered taxes, providing $6 billion in relief to help support Ontario businesses when they need it the most;
  - Deferring the upcoming quarterly (June 30) remittance of education property tax to school boards by 90 days. This will provide municipalities with the flexibility to, in turn, provide property tax deferrals of over $1.8 billion to local residents and businesses; and
  - Providing $1.9 billion in new financial relief by the Workplace Safety and Insurance Board (WSIB) allowing employers to defer payments for a period of six months.

Please contact us if you have any questions.

March 24, 2020
0

CRA Tax Measures Amid Covid-19

Category : blog

Dear Client & Friends:

With the recent pandemic, the Government of Canada is taking immediate, significant and decisive action to help Canadians facing hardship as a result of the COVID-19 outbreak.

On March 18, 2020, the Prime Minister announced a new set of economic measures to help stabilize the economy during this challenging period. These measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses.

General support for individuals

1. Increase to the Canada Child Benefit this year

For over 3.5 million families with children, who may also require additional support, the Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child as part of their May payment.

2. Income Tax Filing Deadline Extension

In order to provide greater flexibility to Canadians who may be experiencing hardships during the COVID-19 outbreak, the Canada Revenue Agency will defer the filing due date for the 2019 tax returns of individuals, including certain trusts.

For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020. However, the Agency encourages individuals who expect to receive benefits under the Goods and Services Tax Credit or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.

For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.

The Canada Revenue Agency will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.

3. Mortgage Deferral & Support

The Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty. These include payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.

Canada’s large banks have confirmed that this support will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products. These targeted measures respond to immediate challenges being faced across the country and will help stabilize the Canadian economy.

Support for Unemployment

1. Improved access to Employment Insurance

For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure will be in effect as of March 15, 2020.

2. The New Emergency Support Benefit

For Canadians who lose their jobs or face reduced hours as a result of COVID’s impact, the Government is introducing an Emergency Support Benefit delivered through the CRA to provide up to $5 billion in support to workers who are not eligible for EI and who are facing unemployment.

Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to:
Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.

Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not qualify for EI sickness benefits.

Parents with children who require care or supervision due to school or day care closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.

Application for the Benefit will be available in April 2020 and require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two Weeks to reconfirm their eligibility. Canadians will select one of three channels to apply for the Benefit:

By accessing it on their CRA MyAccount secure portal by accessing it from their secure My Service Canada Account; or
By calling a toll-free number equipped with an automated application process. The general contact number for Service Canada is 1-800-206-7218.

3. Support for people sick or quarantined Improved access to Employment Insurance Sickness Benefit

For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is waiving the requirement to provide a medical certificate to access EI sickness

Support for students and recent graduates

A moratorium on the repayment of Canada Student Loans
The Government of Canada is placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.

Business Tax Payment Relief

Businesses can defer the remittance of any income tax payments until September 1, 2020. This measure will apply to income tax balances and instalments owing on or after March 18, 2020 and before September 2020. There will be no interest or penalties payable on these deferred amounts. Please note that this deferral does not apply to GST/HST and employer payroll remittances.

CRA Audits

CRA will not contact any small or medium businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the CRA will temporarily suspend audit interaction with taxpayers and representatives.

Business Credit

The Business Credit Availability Program will allow the Business Development Bank of Canada and Export Development Canada to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses.

Temporary Wage Subsidy

Small employers will be entitled to a wage subsidy for three months equal to 10% of remuneration paid during that period, to a maximum subsidy of $1,375 per employee and $25,000 per employer. The subsidies apply for wages paid from March 18, 2020 through to June 20, 2020. Any employee, including family members are eligible

This subsidy is available to corporations who can claim the small business deduction, non-profit organizations and charities. To be eligible, corporations must have had a payroll account with the Canada Revenue Agency as of March 18, 2020 and have had less than $15 million in taxable capital employed in Canada in 2019.

For More Information:

Visit our Website: www.arjcpa.ca
Visit CRA: https://www.canada.ca/en/department-finance/economic-response-plan.html

We are here to help

We understand this is an uncertain time for you, your family and your businesses; we are here to support you in whatever way we can. We also work very closely with personal and business bankers if you require credit extensions for your personal mortgages or additional business credit.

If you have any questions on your insurance, please email us at ajaffer@arjcpa.ca or clientcare@arjcpa.ca or contact the office at 905-629-7720.

Sincerely,
Ali Raza Jaffer

January 21, 2020
0

Personal Tax List

Tags : taxes

Category : blog

Here is a helpful checklist to help you for your tax preparations. If you have any questions feel free to contact us at 905-629-7720.

Click here to download your Personal Tax Checklist

May 1, 2018
0

Residential Tenancy Agreement

Category : blog

Effective April 30, 2018, residential leases require a standard tenancy agreement.

Click here to view the agreement.

Call our office at 905-629-7720 if you have any questions

Category Archives: blog

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1. Federal Government

2. Ontario Government

$3.7 billion to support people and jobs, including:

$10 billion in support for people and businesses to improve cash flows by:

Dear Client & Friends:

General support for individuals

1. Increase to the Canada Child Benefit this year

2. Income Tax Filing Deadline Extension

3. Mortgage Deferral & Support

Support for Unemployment

1. Improved access to Employment Insurance

2. The New Emergency Support Benefit

3. Support for people sick or quarantined Improved access to Employment Insurance Sickness Benefit

Support for students and recent graduates

Business Tax Payment Relief

CRA Audits

Business Credit

Temporary Wage Subsidy

For More Information:

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