Dear Clients & Friends,

As the good weather is upon us, let’s take this opportunity to enjoy the outdoors and spend time with the family.  Being indoors for the past few months has given us all time to ponder upon how we can improve ourselves, look at the lessons learned over the past few months, and perhaps work on some personal and business budgeting strategies.  We can now take some well-deserved time off over the summer months.  In this edition, we review the existing Covid-19 relief benefits and those that are coming to an end very soon.

Here are some other items included in this newsletter:

1. Covid-19 Government Updates
2. Insurance & Estate Planning
3. Personal Income Tax Payment Deferral
4. Advisory, Tax Planning and Cash Flow Planning
5. Website, Social Media Updates & Google Reviews

Enjoy the summer and looking forward to connecting with you in person very soon!

1. 1. Covid-19 Updates:

All archives of the Covid-19 programs from our past newsletters are available on our website.  Please click Herefor the archives:  https://arjcpa.ca/newsletter/

I have listed a summary of the programs below.  The details are also available at https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update.htmland https://www.ontario.ca/page/businesses-get-help-covid-19-costs

New Programs:

Canada Recovery Hiring Program (CRHP): New Hiring Subsidy

Here are the key elements of the new hiring subsidy introduced recently.   Details are available on the following link:   https://www.canada.ca/en/department-finance/news/2021/06/helping-hard-hit-businesses-hire-more-workers-with-the-canada-recovery-hiring-program.html

1. The 2021 Federal Budget introduced the new CRHP which would provide eligible employers with a subsidy of up to 50% of the incremental remuneration paid to eligible employees from June 6, 2021 to November 20, 2021. The higher of the Canada Emergency Wage Subsidy (CEWS) or CRHP may be claimed for a particular qualifying period, but not both.

Eligible employers:

Employers eligible for CEWS would generally be eligible for CRHP. However, a for-profit corporation would be eligible only if it is a Canadian-controlled private corporation (subject to a few minor exceptions). Eligible employers (or their payroll service provider) must have had a CRA payroll account open March 15, 2020.

Eligible employees:

The same employees eligible for CEWS are proposed to be eligible for CRHP, except that CRHP will not be available for furloughed employees.

Subsidy Amount:

The subsidy is computed as the incremental remuneration multiplied by the applicable hiring subsidy rate for that period. The following are the amounts per period:

1. 1. 1. 50% for the periods from June 6 – August 28
      2. 40% from August 29 – September 25
      3. 30% from September 26 – October 23
      4. 20% from October 24 – November 20.

Canada Recovery Hiring Program Dates Used to Calculate Incremental Remuneration, Periods 17* to 22

(June 6, 2021 to November 20, 2021)

Qualifying period   Qualifying Period Dates:

Period 17                   June 6 to July 3, 2021

Period 18                   July 4 to July 31, 2021

Period 19                   August 1 to August 28, 2021

Period 20                   August 29 to September 25, 2021

Period 21                   September 26 to October 23, 2021

Period 22                   October 24 to November 20, 2021

*Baseline period       March 14 to April 10, 2021

**Period 17 of the Canada Emergency Wage Subsidy would be the first period of the Canada Recovery Hiring Program. Period identifiers have been aligned for ease of reference.

 

Revenue Threshold Reference Periods for Revenue Decline

 

Here are some other items to consider for the subsidy:

1.Incremental remuneration for a qualifying period means the difference between:

a.an employer’s total eligible remuneration paid to eligible employees for the qualifying period, and

b.its total eligible remuneration paid to eligible employees for the base period (March 14 to April 10, 2021).

2.The same types of remuneration eligible for CEWS would also be eligible for CRHP (e.g., salary, wages, and other remuneration for which employers are required to withhold or deduct amounts). The amount of remuneration for employees would be based solely on remuneration paid in respect of the qualifying period.

3.Eligible remuneration for each eligible employee would be subject to a maximum of $1,129 per week, for both the qualifying period and the base period.

4.Similar to CEWS, the eligible remuneration for a non-arm’s length employee for a week will also be limited based on their “baseline remuneration” (that is, their pre-COVID remuneration levels).

5. Required revenue decline:  In order to qualify, the eligible employer would have to have experienced a decline in revenues. For the qualifying period between June 6, 2021 and July 3, 2021, the decline would have to be greater than 0%. For later periods, the decline must be greater than 10%. 

Application deadline:

Similar to CEWS and CERS, an application for a qualifying period would be required to be made no later than 180 days after the end of the qualifying period.  CRA has not provided any information on the application process, but these will be available as the first period comes to close.

 

Existing Programs

For Individuals:

1.Canada Recovery Benefit (CRB)

2.Canada Recovery Caregiving Benefit (CRCB)

3.Canada Recovery Sickness Benefit (CRSB)

Note that these benefits are not available to individuals during mandatory quarantine or self- isolation following a return from international travel, effective January 3, 2021.

 

For Businesses:

1. 1. Canada Emergency Business Account (CEBA):  The Canada Emergency Business Account (CEBA) application deadline (for either the $20,000 extension,or the full $60,000) has been extended from March 31 to June 30, 2021.
   2. Canada Emergency Rent Subsidy (CERS) & Canada Emergency Wage Subsidy (CEWS)
      1. The Federal Budget on April 19, 2021 announced an extension of the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS)  to September 25, 2021.
      2. For the periods between March 14 and July 3, 2021, the maximum CEWS subsidy rate is 75%, and the maximum CERS rate is 65%
      3. The maximum rates for both CEWS and CERS will be the same and decline gradually: 60% (July 4 – July 31), 40% (August 1 – August 28), and 20% (August 29 – September 25).
      4. CERS will remain at 25% for the entire period (March 14 – September 25).
   3. Ontario Small Business Support Grant:  Applications closed on April 7, 2021
   4. Ontario Main Street Relief Grant: PPE Support  The application closed on March 31, 2021

Please contact us if you require assistance with the application process.   Additional information is available at:  https://www.app.grants.gov.on.ca/msrf/#/

 

1. 1. Insurance & Estate Planning

With tax season behind us, it is an excellent opportunity to review the other elements of our personal and business planning to ensure everything is updated before things get busy in the fall.   I work with insurance professionals to help grow your net worth and prepare estate planning strategies.  Whether you require medical benefits for your business or protection of your mortgaged assets or general life insurance, I can assist you to find the best solution for you and your family.

 

Here are some areas you may want to consider:

1. Tax Efficient Strategies
2. Income protection & Disability Insurance
3. Critical Illness
4. Key Person Insurance
5. Medical Benefits for your staff and family

If you do not have a Will or Power of Attorney (POA) prepared, you should also strongly consider preparing those documents.  For business owners, to avoid probate tax, you may also want to consider preparing multiple wills.   I can help guide you in the right direction for any of your insurance or estate planning needs.

 

1. 1. Personal Income Tax Payment Deferral

CRA has allowed for the deferral of income tax owing until April 30th, 2022 if the following conditions are met:

• You collected at least one of the following Covid-19 benefits:  CERB, CRB, CESB, CRCB, CRSB, EI or an provincial/territorial benefits
• Your 2020 taxable income was $75,000 or less
• You meet the tax filing deadline of April 30th, 2021

 

1. 1. 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:

1)

1. Business Financing which includes:
   1. $100k BDC working capital loan application
   2. Bank loan proposals & applications
   3. Lines of credit applications
   4. Applications to various government loan programs in response to the COVID-19 pandemic
   5. Preparation of business plans and cash flow projections
2. Cash Flow Planning & Budgeting
3. Tax Planning and Corporate Restructuring
4. Net Worth Analysis and Planning
5. 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/

Website & Social Media Updates

If you have missed out on previous newsletters including all the government programs available throughout covid in 2020 and 2021, please click Herefor the archives:  https://arjcpa.ca/newsletter/

We have been working very hard in providing COVID-19 CRA program updates, personal tips & accounting, tax and business content on social media.   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.

   

If you get an opportunity, please also provide a Google Review available at the following link:

AR Jaffer Professional Corporation Chartered Professional Account Google Review

Stay Safe!
Best regards,