Hodge Podge May 2021
FEDERAL BUDGET 2021
The Federal Budget became much to do about nothing in the end. With much anticipation around tax rate increases including revisions to capital gains inclusion rates, in the end, none of this rang true. The budget focus was recovery and spending with little change to taxes.
The government is all about ensuring that individuals and businesses continue to be supported through the process of vaccination and reduction in overall COVID-19 cases. They have continued with their subsidies to ensure that while the economy slowly reopens, the businesses can accommodate the introduction of new labour and expansion:
Extending the Canada Emergency Wage Subsidy (CEWS)
The extension will be made to September 25, 2021
During the extension, there will be a gradual decrease in the subsidy rate to allow for a phase-out of the support
Publicly listed companies will have to repay the support if their top executives receive more remuneration in 2021 than in 2019
Extending the Canada Emergency Rent Subsidy (CERS)
The extension will be made to September 25, 2021
A gradual decrease in the subsidy rate will start July 4, 2021, until the end of the extension period to allow for a phase-out
Potential that there will be a further extension if deemed necessary until November 20, 2021
Extending the Canada Emergency Business Account (CEBA)
Applications for this loan account has been extended to June 30, 2021
The Regional Relief and Recovery Fund access has also been extended to June 30, 2021, to ensure that small rural businesses have access to the loan program
Employment Insurance Access
The government is temporarily waiving the one week waiting period for claims
Canada Recovery Benefit will be extended to provide up to 12 additional weeks to a maximum of 50 weeks with a slow phase-out of benefits claim by reducing the claim from $500 per week to $300 per week after the first four weeks of the extension
Canada Recovery Caregiving Benefit will also be extended for an additional 4 weeks to a maximum of 42 weeks at $500 per week
The budget also proposes that legislative amendments be sought to allow for a further extension until no later than November 20, 2021
New Canada Recovery Hiring Program (CRHP)
The subsidy is available to assist employers in hiring more people during the economic recovery
The subsidy will run from June 6 to November 20, 2021, and will run parallel to the CEWS
Employers would be eligible to claim the higher subsidy of either CEWS or CRHP
As part of the economic recovery, the government has introduced new spending initiatives to assist taxpayers to get back to work and reduce their financial burdens as this process unfolds.
Establishing a Canada Wide Early Learning and Child Care System
Over the next five years, the government will work with provinces and territories to:
Have a 50% reduction in average fees for regulated early learning and child care in all provinces outside of Quebec
Work towards an average of $10 a day cost to parents by 2025-26 for all regulated child care spaces in Canada
Have an ongoing annual growth in spaces available
Expand the before and after school care to provide more flexibility to working parents
Supporting Canada’s Youth
Providing relief from student debt by extending the waiver of interest on Canada Student Loans and Canada Apprentice Loans until March 31, 2023
Enhancing repayment assistance by increasing the threshold for repayment assistance to $40,000 for those living alone. This means a student earning less than $40,000 a year would not have to make payments on their loans
Doubling Canada Student Grants for two additional years
Increasing access to work placement by increasing the wage subsidy available for employers up to 75% or $7,500 per student
Supporting Employers with Training and Recruiting
Increasing funding around recruitment to assist businesses in accessing and finding skilled labour
Providing a new Apprenticeship Service. Employers would be eligible to receive up to $5,000 for all first-year apprenticeship opportunities and if the apprentice is in the construction and manufacturing Red Seal trades up to $10,000 for those underrepresented including women, racialize Canadians and persons with disabilities
Additional funding in areas of skills development, training and workforce planning will be made available as well as job transitioning and return to school initiatives to increase skills will be targeted
Provide a one-time payment of $500 to OAS pensioners who will be 75 or over as of June 2022
Introduce legislation to increase regular OAS payments by 10% to seniors 75 or older as of July 2022
Other Business Support
Canadian Controlled Corporations will be eligible to expense in the year of acquisition any depreciable property purchased up to a maximum of $1,500,000
Proposal to drop the general corporate and small business tax rates by 50% for those manufacturing zero-emission technologies
The intent is to increase funding and return proceeds to farmers to assist in transitioning to lower carbon, more fuel-efficient ways of farming
The government is expanding funding to the Digital Main Street Program to allow businesses to adopt e-commerce tools. This is an initiative in partnership with the Ontario Government
BDC will receive additional funding to help small and medium-sized businesses finance technology adoption
Increasing funding for the rollout of broadband across all of Canada
Of course, no budget can be tabled without some new form of revenue that comes through taxation initiatives. While general tax rates for corporations and individuals were not changed, there were some very specific tax initiatives introduced.
Introduce a digital services tax on large businesses
Introduce a luxury tax, effective January 1, 2022, on sales of luxury cars and personal aircraft for personal use with a retail sales price over $100,000 and on boats for personal use over $250,000. The tax is calculated at the lesser of 20% of the value above the threshold or 10% of the full value of the item
Introduce a national annual 1% tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused, effective January 1, 2022
Starting 2023, the amount of interest that certain businesses can deduct will be limited to 40% of their earnings in the first year and 30% thereafter. There is expected to be a relief for small businesses and for other situations that do not represent a significant tax base erosion. Draft legislation expected in the summer of 2021 for consultation
Work to reduce tax avoidance and evasion by expanding audit initiatives and also to expand funding to the CRA for enhanced collection procedures.
Enhance the penalty structure in the act to deal with the abusive tax planning measures and schemes
All in all the budget will not generate positive cash flows and deficits will climb throughout 2021. We can thus likely anticipate further tax rate increases once the worst of COVID-19 is behind us.
SUMMER FUN FACTS
Watermelon is one of summer’s best summer treats. Did you know that watermelons are not a fruit, but a vegetable instead? They belong to the cucumber family of vegetables.
Frisbee’s, invented in the 1870’s as a pie plate, but in the 1940’s, college students began throwing them around. They have since stopped being used for pie plates and are now a summertime staple.
The Eiffel Tower actually grows in the heat of the summer. Due to the iron expanding, the tower grows about 6 inches every summer.
ONTARIO COVID-19 WORKER INCOME PROTECTION BENEFIT
On April 29, 2021, the Employment Standards Act 2000 was amended to require employers to provide employees up to three days of paid infectious disease employee leave if the employee is unable to work due to certain reasons related to COVID-19 beginning April 19th, 2021.
These reasons include:
Going for a COVID-19 test
Self-isolating at home awaiting the results of a COVID-19 test
Being sick with COVID-19
Going for a vaccine
Experiencing side effects from a COVID-19 vaccination
Having been advised to self-isolate due to COVID-19 by an employer, medical practitioner or other specified authority
Providing care or support to certain relatives when the relative is:
Sick with or having symptoms of COVID-19
Self-isolating due to COVID-19 on the advice of a medical practitioner or other specified authority
Employers are required to pay the employee their regular rate of pay for the three days up to a maximum of $200 a day. The three days do not need to be consecutive. The employee is not required to provide a doctor’s note to qualify. If the employee is entitled to a paid sick days under their employment contract, the obligation to pay the benefit is reduced by the number of days of paid sick leave available under the employment contract.
Employees may opt not to receive benefits under this program. If they chose to opt-out, they must advise their employer in writing before the end of the pay period in which the leave occurs.
This entitlement is in addition to the unpaid infectious disease emergency leave that the employee may be entitled to.
The benefit amounts will be reported in the employee’s T4 similar to regular pay.
Eligible employers are entitled to be reimbursed the amount of the infectious disease emergency leave pay that they paid to their employees up to $200 per employee per day taken.
Eligible employers must make their application for reimbursement to the Workplace Safety and Insurance Board within 120 days of the date the employee was paid the benefit. More information on the process to apply for reimbursement will be available soon. Employers will not be reimbursed for paid sick leave paid under the requirements of an employment contract.
The employer reimbursement will be reported as income for tax purposes.
ONTARIO COVID-19 WORKER INCOME PROTECTION BENEFIT
The Ontario Tourism and Travel Small Business Support Grant provides a one-time grant of $10,000 to $20,000 to eligible small businesses in the tourism and travel sector. The purpose of this grant is to help small businesses in this sector recover from the impacts of COVID-19 and create and protect jobs.
The amount of the grant is based on how much revenue the business has lost and the length of time they have been in business.
To be eligible for the Tourism and Travel Grant, businesses:
Must not have received or be affiliated with a business that received the Ontario Small Business Support Grant (OSBSG)
Must have fewer than 100 employees as of April 30, 2021
If the business was operating before July 2, 2019, have a revenue decline of at least 20% when comparing three consecutive months in 2019 to the same three months in 2020
If the business began operations (or was acquired) between July 2, 2019, and December 31, 2020, it is eligible for a $10,000 grant if it meets all of the other eligibility criteria
A business that began operations in 2021 are not eligible for the grant
Must be in operation as of April 30, 2021
Qualifying businesses are:
Amusement parks or waterparks
Concession stands or games and rides at amusement parks or waterparks
Bed and breakfasts
Rental of cottages or cabins
Fireworks display services
Hotels or motels
Hunting or fishing camps
Indoor attractions intended primarily for tourists (such as haunted houses)
Mobile food services (such as food trucks and chip wagons)
Day use outdoor adventure operations
Recreational or vacation camps (such as overnight summer camps)
Recreational rental services (such as bicycle or boat rentals)
Travel agents registered with the Travel Industry Council of Ontario (TICO)
The employee count as of April 30, 2021, and the revenue decline criteria are calculated on the entire affiliated group of businesses (if there is one).
Businesses are not eligible if they are owned by a person holding federal or provincial office or a provincial employee.
To be more specific, the following businesses are not considered qualifying businesses for this grant:
Children’s day camps
Conference or convention centres
Event planning services
Food and grocery delivery services
Indoor recreations facilities and activities for use of the local community
Museums, galleries, aquariums, zoos, historic sites, gardens, science centres and similar attractions
Farmer’s markets and roadside stands selling farm products or pick your own produce businesses
Outdoor sports and recreational facilities
Racing venues, casinos, bingo halls and gaming establishments
Restaurants and bars
Rental properties that are not bed and breakfasts, cabins or cottages
Tour and guide services
To apply, you will need general business information (such as your business number) and general bank account information. You will also need the calculations for the decline in revenue, the number of employees, a list of affiliated businesses (if applicable) and electronic copies of licenses and permits required to operate the tourism and travel business (if applicable).
Applications must be completed by Friday, June 25th, 2021.
Once an application is submitted, it will take approximately 15 business days to process and an additional 10 business days to receive the payment.
Any grants received by a business will be taxable income.
The following is a link to the application:
The following is a link to check the status of your application:
WHAT TO DO IF YOU CAN'T PAY YOUR TAXES
If you are struggling with your tax payments, you can work with the Canada Revenue Agency (CRA) to find ways to pay your tax debt based on your financial situation.
The following is a link to the information on payment options as well as payment arrangement tools:
73 SUMMER RECIPES FROM BON APPÉTIT
A savory galette topped with peak season tomatoes, cheese, and garlic. Number 14 on this list you'll be glad to have in your back pocket.
Bon Appétit's list of Summer Recipes by Rochelle Bilow has choices that cover you from the cookout all the way to the cocktails to keep you cool all season long.