ent® Chartered Professional Accountants Blog

The 2021 federal budget introduced the underused housing tax which is basically a 1% tax on the value of non-resident, non-Canadian-owned real estate that is considered to be vacant or underused.

This tax was generally aimed at non-residents of Canada, however, there are situations where these rules can also apply to Canadian citizens or Canadian residents. Canadians may not be required to pay the tax but will have to file a return and claim the exemption. Note: there is a separate return that would normally be due on April 30th of every year. For the 2022 calendar year, CRA has extended the deadline to October 31st, 2023.

Please note, there are significant penalties for not filing these returns starting at $5,000 for individuals and $10,000 for corporations, per return, even if there are no taxes payable.

Make sure you have a current will

One more reason to ensure that a) you have a will and b) you have it updated or reviewed every 2 years, or whenever a life event occurs.

Ontario has a major change taking effect January 1, 2022. Please click this link to review a brief description of the changes, then contact your lawyer to make sure you are up to date. 

• You own property that generates rental revenue from commercial real property located in Canada.
• You are the property owner of the commercial real property where the impacted small business tenants are located.
• You have a mortgage loan secured by the commercial real property, occupied by one or more small business tenants. (If you do not have a mortgage there will be announcements coming)
• You have entered or will enter into a rent reduction agreement for the period of April, May, and June 2020, which will reduce impacted small business tenant’s rent by at least 75%.
• Your rent reduction agreement with impacted tenants includes a moratorium on eviction for the period of April, May, and June 2020.
• You have declared rental income on your tax return (personal or corporate) for tax years 2018 and/or 2019.

CMHC will provide forgivable loans to eligible commercial property owners.

• The loans will cover 50% of the gross rent (gross rent includes TMI) owed by impacted small business tenants during the 3-month period of April, May, and June 2020.
• The property owner will be responsible for covering no less than 25% of the gross rent.
• The small business tenant will be responsible for no more than 25% of the gross rent.

Program details including how funds will be disbursed and how to apply are being finalized and will be available soon.

Still have questions about the CECRA?  1-800-668-2642   This email address is being protected from spambots. You need JavaScript enabled to view it.

The CERB, eligibility rules have been expanded to:

• Allow 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 as a result of the COVID-19 outbreak.
• Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job or return to work because of COVID-19.

These changes will be retroactive to March 15, 2020. The application portal has been updated to reflect these changes.

Essential workers

The Government of Canada will work with provinces and territories through a new transfer to cost-share a temporary top-up to the salaries of low-income essential workers that the provinces and territories have deemed essential in the fight against COVID-19.

Provinces and territories will be able to provide their low-income essential workers (those who earn less than $2,500 per month), with a top-up.

 About support for families

While schools and child care centres are closed, parents can apply for direct funding to offset the cost of buying materials to support their children’s learning, while they practice self-isolation and physical distancing.

Eligible parents will receive a one-time per child payment of:

• $200 for children aged 0 to 12
• $250 for children or youth aged 0 to 21 with special needs

This funding can help parents with the costs of workbooks, educational apps, educational subscription services, movies and other tools to support learning at home.

Parents refers to parents, guardians, and caregivers

Eligibility

There is no income cap on this program. All parents are eligible if you have a child who is:

• aged 0 to 12
• aged 0 to 21 with special needs

If you have more than one child, you must submit one application per child.

For more information, please visit 

https://www.iaccess.gov.on.ca/FamilyAppWeb/public/index.xhtml

CANADA EMERGENCY WAGE SUBSIDY

This would provide a 75-per-cent wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020.

Eligible Employers

Eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities.

This subsidy would be available to eligible employers that see a drop of at least 30 percent of their revenue (including donations received for NPOs and Charities) for the eligible periods.

Amount of Subsidy

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

• 75 percent of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
• The amount of remuneration paid, up to a maximum benefit of $847 per week or 75 percent of the employee’s pre-crisis weekly remuneration, whichever is less.

NOTE

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 percent of the employee’s pre-crisis weekly remuneration.

ELIGIBLE PERIOD       CLAIMING PERIOD                  REVENUE PERIOD

Period 1                     March 15 – April 11             Month of March 2020 vs 2019

Period 2                     April 12 – May 9                   Month of April 2020 vs 2019

Period 3                     May 10 – June 6                  Month of May 2020 vs 2019

How to Apply

• The Canada Revenue Agency’s My Business Account portal

https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html

• A web-based application. (As soon as it is available we will post the link.)
• When applying for the subsidy, employers would be required to attest to the decline in revenue

Accounting / tax treatment

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.

Employers are required to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees.

TEMPORARY WAGE SUBSIDY

See my blog on March 22, 2020

https://entaccountants.com/clients/blog/covid-19-how-to-claim-the-employer-10-wage-subsidy

Interesting read from today’s Globe and Mail

The Financial Consumer Agency of Canada released a report yesterday saying that Canada's Big Six banks have “insufficient” controls to guard against misleading sales tactics. The watchdog did not find evidence of widespread misconduct but the report sheds light on the "sharp focus on sales" at Canadian banks, which could increase the likelihood that employees “missell“ products or services. The FCAC wrote in its report that “the importance employees place on reaching sales targets and qualifying for incentives may lead them to prioritize sales over consumers’ interests.”
Rob Carrick writes in a column that the Big Six will fleece you if you let them: ”The FCAC has some ideas on improving consumer protection for bank customers, all of which sound worthwhile. But there’s more to this problem than profit-hungry banks pressuring employees to squeeze customers. We live in a country that is way too impressed with the financial industry and grants it all kinds of liberties. We encourage the banks to be predators by acting like sheep.”