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Category Archives: blog

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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.

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For Individuals

  1. Canada Emergency Response Benefit (CERB) Update:
  2. 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

  3. 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).
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For Businesses

  1. 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

  2. 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
  3. 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!


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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:

  1. An eligible employee is an individual who is employed in Canada.
  2. 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.
  3. 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. 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!


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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 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 a 30% decrease in their revenue (see Periods of Eligibility). In applying for the subsidy, employers would be required to attest to the decline in revenue.

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:

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

(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:

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.

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!


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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 1st, 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:

  1. 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)
  2. 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.
  3. 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.
  4. 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.

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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.


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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:

  1. Visit our Website: www.arjcpa.ca
  2. 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


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Personal Tax List

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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


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Residential Tenancy Agreement

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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

 

 

 


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Wealth Building on a $50K Salary

Category : blog

Hear Ali Raza Jaffer, President AR Jaffer Professional Corporation, who gives advice on how to financially discipline ourselves to attain our goals for the future including tips on how to approach our cashless society, credit cards, good debt vs bad debt, dual incomes and guidance on RRSP/RESP/TFSA options.


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Proposed Tax Changes

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Category : blog

As you may have heard in the news, the government is proposing tax changes that affect private corporations.  I have attended a number of town hall sessions and seminars on the proposed changes and have summarized the impacted tax planning areas:

Income Splitting:

Business owners currently can split income to family members to reduce the overall family tax burden.  The government wants to restrict this by expanding the ‘kiddie tax’ rules and preventing dividends paid to children at a lower tax rate. More specifically, the government wants to restrict the ability to pay salary or dividends to adult children between the age of 18 and 24 by extending the Kiddie Tax rules ( “Tax on Split Income” (TOSI) ). Furthermore, a reasonableness test will be introduced to determine if the amount received by the family member is commensurate with the labour and capital contributions by the family member.

Holding Passive Investments Inside a Private Corporation:

The government is planning to change the rules to prevent the use of corporate tax deferrals to hold passive investments inside a corporation. The existing rules allow shareholders to decide when they receive dividends allowing them to control when the personal taxes are paid. This tax deferral was intended by the government as an incentive for Canadian controlled private corporations to invest within their business. The government opines that the current system allows corporations (paying tax at a lower rate) to retain cash within the corporation and invest the excess funds at an unfair tax advantage.  They have not determined what the specific rate will be, but are looking at a specific tax rate for passive investments.

Converting Income into Capital Gains:

The Government has proposed new measures which seek to eliminate tax plans that convert dividend income into low taxed capital gains. Within the tax rules is the theory of integration in which income earned in a corporation is taxed at the corporate level and once again when the individual shareholder receives a dividend.   The after-tax amount in the individual’s hand after removing the funds from the corporation should be the same as if the individual earned the funds directly as a salary. The government is concerned with the ineffectiveness of integration in situations where corporate surpluses are paid out in the form of tax-exempt or lower taxed income. The legislation has been amended to eliminate this conversion and a new anti-avoidance rule will be added.

Multiplication of the Lifetime Capital Gains Exemption (LCGE):

Currently, corporations can use family trusts to have multiple LCGE limits for multiple family members.  There are 3 proposed measures in this category:

  1. The LCGE is no longer available for taxpayers in the year before they attain the age of 18
  2. Gains accrued when the property was held by a trust would no longer be eligible for the LCGE
  3. If the gain from the property is included in an individual’s split income, then the LCGE would not be eligible

As the legislation is finalized, I will provide a further update.  In the meantime, if you have any questions, please contact myself or the staff.

Best regards,

Ali Raza Jaffer, CPA, CGA, MBA, BComm
President, AR Jaffer Professional Corporation
Chartered Professional Accountant
(T) 905-629-7720 (F) 905-629-1947
(W) www.arjcpa.ca (E) ajaffer@arjcpa.ca


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