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COVID-19

Keep It Simple S…ubsidy

Published

4 years ago

9 minute read

You want my idea for the wage subsidy… well here it is.

WARNING: It is so simple to implement, there is no way a government would do it.

(Originally posted on LinkedIn (no joke) April 1, 2020)

 

 

People have said “you are quick to pick apart the wage subsidy, so what is your solution?”

So… you asked for it… here it is:

I’ve said it from the very beginning that it should resemble EI support. All they should be doing is simple.

(No this is not an April Fool’s joke… but I am hoping the Press Conference on April 1, 2020 by the Minister of Finance was)

I was fine with EI amounts… but since we have the Canadian Emergency Response Benefit (CERB)… let’s use that amount to keep it more simple.

The amount is this:

(just like the CERB). $2,000 per worker per month, taxable, and no withholdings up front

Put a ‘clawback’ amount on those that are getting it like the clawback on Old Age Security or regular EI benefits for when they file income tax next year.

The 3-prong approach to the subsidy

 

Prong 1 – CERB from Service Canada

Everyone should get it. Yes, everyone.

However, anyone that makes more than the EI maximum in 2020 must pay back 30 cents of the CERB on every dollar over the $54,200 EI maximum threshold when they file their 2020 taxes.

So when you file your personal 2020 income tax, if you ended up making more than $80,667 in income, you will have had to pay back the full $8,000 of CERB received on a T4E.

This results in helping everyone today, help jump start the economy when we need to and have those that get back on their feet quicker, paying some or all of it back.

If you received both the CERB from Service Canada, and the CERB through your employer, you have to pay back the amount greater than the $8,000 received, and then any other amount based on the formula above.

This will prevent or reduce the double dip.

 

Prong 2 – CERB through the Small Business employer

The small business (less than $15M in assets of all associated corporations) employer would also get the CERB on a per-employee basis. They already have to fill out the number of employees when they file their remittance forms, so what’s the difference?

This $2,000 flows through to subsidize the wages, and must be paid to the employees. You create a different box number to track it on the T4 slips next year for audit purposes and to make sure the employee got the money.

I know this isn’t 75%, but the 75% was a capped amount anyways. That’s why I said keep it simple.

In order to incentivize the small business employer so they don’t lay them off, treat it as a flow through, and non-taxable to the employer.

So if there are five employees at the small business, the employer will get $10,000 of CERB to flow through to the employees.

The employee’s wages will be subsidized by the $2,000 amount, and they will put the $2,000 in a different box on each T4 slip for tracking purposes.

In order to incentivize the employer to act as the flow-through for Service Canada, this $2,000 will not be subject to EI or CPP by the employer and will not be included in the taxable income of the employer.

This allows the employer to claim the full wage deduction, have subsidized payroll costs, and save the income tax amount by deducting the full payroll.

By not counting it as income, this tax and remittance savings can be viewed liked an “admin fee” for acting on Service Canada’s behalf.

On $10,000 (5 employees) this would save up to $252 in Employer EI, $525 in Employer CPP, and $900 in federal income tax.

Cost to government for employer being the administrator instead of Service Canada: $1,167.

Incentive for employer to NOT lay off the staff, $10,000 in wage costs… and $1,167 in tax savings.

 

Prong 3 – CERB through Large Corporations

If the employer is getting the CERB on a per-employee basis and they are a large (greater than $15M in assets) corporation or associated group, allow them to not pay employer EI or CPP on the CERB.

100 employees = $200,000 = up to $5,040 in reduced EI, and $10,500 in reduced CPP remittances as the incentive.

So the employer gets $2,000 per employee as a subsidy to cover wage costs, and does not have to do payroll withholdings on the amount, saving them a total of $200,000 + 5,040 + 10,500 = $215,540.

Or put another way, they can save $15,540 by not laying them off.

If that’s not enough incentive, then perhaps look at it being only 50% taxable, which in the example above, would reduce Federal income tax by $15,000 (using 15% general rate x 50% x $200,000)

 

 

Audit Tracing

By simplifying the process, there is less ability for abuse.

Service Canada will issue everyone a T4E with the CERB they personally received from them (no application necessary).

T4 box numbers can be reconciled by CRA on slip filing to amounts of CERB received by the employer through the PIER system.

Those same boxes can be reconciled to specific individuals on tax filings to see if there were any that should repay.

Amounts greater than $8,000 received by anyone will need to be repaid.

Those with income over the EI Maximum amount, will have to repay some or all of the CERB back when they file.

If you don’t agree… well… the specific repayment formula can be figured out later… we have a year for that. We need the money in the public’s hands now though.

 

In Conclusion

These incentives and recapture mechanisms will reduce the likelihood of layoffs in low-margin industries like hospitality since $2,000 a month goes a long way to covering those wages; it will “Flatten the EI Curve” (trademark pending – not really… but I like saying it)

It would get everyone back working quicker after this is done by maintaining the connection to employers, and get the economy kick-started with cash injections at the front of this thing, rather than the end.

In the end… you have employers flowing the $2,000 through to the employee on Service Canada’s behalf as a no-withholding amount and a nominal cost to the employer to administer it, rather than Service Canada processing hundreds of thousands (if not millions) of individual applications.

If they are a small business, they actually get a tax savings by being the administrator and helping Service Canada in the process.

If they are a large business, they can have a good chunk of payroll costs reduced by not having to pay EI and CPP on the amount, and perhaps tax savings.

In the end, every worker gets $8,000 over 4 months just to buy everyone time and we have Flattened the EI Curve.™

Biography of Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr can be found here.

#RedDeerStrong – If you’re struggling and you need to consolidate debt through a mortgage refinance, Kristen is here for you.

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CEO | Director CGL Tax Professional Corporation With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://CGLtax.ca/Litzenberger-Cory.html

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Maxime Bernier says it’s ‘astounding’ Alberta is ‘pushing’ COVID boosters, tells Danielle Smith to stop it

Published on April 19, 2024

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The People’s Party of Canada leader tells the Alberta government: ‘It’s over! Get over it!’

People’s Party of Canada (PPC) leader Maxime Bernier said Alberta Premier Danielle Smith should tell provincial health bureaucrats to “back off” and stop “pushing” the mRNA COVID boosters on “anyone,” considering a recent announcement from health officials recommending yet more COVID shots.

“I find it astounding that Alberta public health bureaucrats are still pushing the mRNA boosters on anyone, and especially on children who have never been at risk, almost two years after almost all other pandemic measures have been ended,” Bernier told LifeSiteNews.

“Danielle Smith’s government should tell its bureaucrats to back off and stop stupidly feeding a needless sense of fear surrounding the virus that lingers among certain groups of society. It’s over! Get over it!”

Earlier this week, officials from Alberta Health Services (AHS), whose chief medical officer throughout the COVID crisis, Dr. Deena Hinshaw, was fired by Smith in 2022, updated its COVID booster recommendations to every “three months” starting at babies only six months old.

“Starting April 15, 2024, select groups of Albertans at high risk of severe outcomes from COVID-19 will be eligible for an additional dose,” the AHS noted on its website.

AHS health officials still assert that all “vaccines are safe, effective and save lives,” and that one can get a COVID shot at the same time as a flu vaccine.

On April 16, Bernier commented on the AHS’s new COVID jab guideline changes on X, in which he asked, “What’s going on in Alberta with their “conservative” government?

Bernier, who was a firm opponent of both the COVID shots and mandates, told LifeSiteNews that AHS’s recommendations are puzzling, given “more and more scientific evidence is emerging of dangerous side effects when injecting from these experimental substances.”

“Even though these are only recommendations, and nothing is mandated, this ‘guidance’ by government agencies influences people’s decisions,” Bernier said.

Those under 18 still need written or verbal consent from their parents to get the shot.

AHS is recommending booster jabs for seniors, healthcare workers as well as those with underlying medical conditions. They also recommend that First Nations people and “members of racialized and other equity-denied communities,” as well as pregnant women get the shots as well.

The COVID shots were heavily promoted by the federal government as well as all provincial governments in Canada, with the Alberta government under former Premier Jason Kenney being no exception.

The mRNA shots themselves have been linked to a multitude of negative and often severe side effects in children.

Danielle Smith took over from Kenney as leader of the United Conservative Party (UCP) on October 11, 2022, after winning the leadership. Kenney was ousted due to low approval ratings and for reneging on promises not to lock Alberta down as well as enacting a vaccine passport. Smith was opposed to COVID jab mandates.

Bernier: It’s ‘deplorable’ some provinces still mandate COVID shot for Heathcare workers

While Alberta does not mandate the COVID shots for healthcare workers anymore, British Columbia still does as well as some health regions in Ontario, a fact that Bernier called “deplorable.”

“I find it deplorable that nurses, doctors and other healthcare workers in B.C. and Ontario still have to be vaccinated to work in hospitals and that thousands of them have not been reintegrated,” Bernier told LifeSiteNews.

“The authoritarian covid measures adopted by all governments have been traumatic enough for millions of Canadians. All of them should be lifted.”

Last year, LifeSiteNews reported on how the details of the Canadian federal government’s COVID-19 vaccine contract with Pfizer for millions of doses of the mRNA-based experimental shots were recently disclosed after being hidden for over three years.

The contract with Pfizer shows the government agreed to accept the unknown long-term safety and efficacy of the shots. The details of the Pfizer contract do not disclose how much the government spent on the jabs.

A bill introduced by Conservative Party leader Pierre Poilievre that would have given Canadians back their “bodily autonomy” by banning future jab mandates was voted down last year after Trudeau’s Liberals and other parties rejected it.

Adverse effects from the first round of COVID shots have resulted in a growing number of Canadians filing for financial compensation over injuries from the jabs via the federal Vaccine Injury Program (VISP).

VISP has already paid well over $11 million to those injured by COVID injections.

Earlier this year, LifeSiteNews reported on how officials from Health Canada have admitted that there is “residual plasmid DNA” in the COVID shots after a Conservative MP asked the agency through an official information request if the DNA fragments were in the shots.

As for Bernier, earlier this month he called out Poilievre for dodging a question regarding Canada’s participation in the United Nations’ pro-abortion Paris Climate Agreement.

Throughout most of the COVID crisis, Canadians from coast to coast were faced with COVID mandates, including jab dictates, put in place by both the provincial and federal governments.

After much pushback, thanks to the Freedom Convoy, most provincial mandates were eliminated by the summer of 2022.

There are currently multiple ongoing class-action lawsuits filed by Canadians adversely affected by COVID mandates.

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Freedom Convoy

Trudeau’s use of Emergencies Act has cost taxpayers $73 million thus far

Published on April 17, 2024

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From LifeSiteNews

By Clare Marie Merkowsky

Expenses for the Emergencies Act, the use of which a federal court ruled ‘not justified,’ included $17.5 million for a judicial inquiry, $400,000 for charter flights and $1.3 million for hotel rooms for out-of-town RCMP officers.

The Liberal government’s use of the Emergencies Act against the 2022 Freedom Convoy has cost Canadian taxpayers over $73 million thus far. 

According to newly released records obtained by Blacklock’s Reporter, Prime Minister Justin Trudeau’s enactment of the Emergencies Act, the use of which has since been ruled “not justified” by a federal court, to drive out Freedom Convoy protestors from Ottawa in 2022, cost the Department of Public Safety $73,550,568.  

According to Blacklock’s Reporter, the $73 million figure was part of records released by the department at the request of Conservative MP Ziad Aboultaif, and despite its high number, is not the final account.

“With regard to enactment of the Emergencies Act in 2022, what was the cost burden for the government?” Conservative MP Ziad Aboultaif asked.  

“Cost associated with fiscal year 2023-2024 are still to be determined,” the department responded.  

According to the Department of Public Safety, most of the public safety expenses were attributed to local authorities in Ottawa and Windsor, Ontario.  

“It should be noted additional funding allocated by the government to Ottawa and its partners as well as Windsor were not specifically as a result of the Emergencies Act invocation but meant to compensate both municipalities for the extraordinary expenses incurred during and after the protracted blockades,” the report said. 

Other expenses included $17.5 million for a judicial inquiry, $400,000 for charter flights, and $1.3 million for hotel rooms for out-of-town RCMP officers.  

The costs were incurred after Trudeau enacted the Act on February 14, 2022 to shut down the Freedom Convoy protest which took place in Ottawa.  

At the time, the use of the Act was justified by claims that the protest was “violent,” a claim that has still gone unsubstantiated.

In fact, videos of the protest against COVID regulations and vaccine mandates show Canadians from across the country gathering outside Parliament engaged in dancing, street hockey, and other family-friendly activities.

Indeed, the only acts of violence caught on video were carried out against the protesters after the Trudeau government directed police to end the protest. One such video showed an elderly women being trampled by a police horse.   

Recently, Federal Court Justice Richard Mosley ruled that Trudeau was “not justified” in invoking the Emergencies Act.

However, the Trudeau government has doubled down on its heavy-handed response to citizen protesters, filing an appeal with the Federal Court of Appeal – a court where 10 of the 15 sitting judges were appointed by Trudeau.

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