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Keep It Simple S…ubsidy

Published

6 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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COVID-19

Canadian veteran challenges conviction for guarding War Memorial during Freedom Convoy

Published on October 23, 2025

By

From LifeSiteNews

By Clare Marie Merkowsky

When the convoy first came to Ottawa, allegations were floated that the memorial had been desecrated. After learning of this, Evely quickly organized a group of veterans to stand guard around the clock to protect the area.

A Canadian veteran appealed to the Ontario courts after he was convicted for organizing a guard around the National War Memorial during the Freedom Convoy.

In an October press release, the Justice Centre for Constitutional Freedoms (JCCF) announced that an appeal has been filed in the Ontario Court of Appeals on behalf of Master Warrant Officer (Ret’d) Jeffrey Evely over his conviction for mischief and obstructing police while on his way to guard the Ottawa War Memorial during the 2022 Freedom Convoy.

“By locking down large sections of downtown Ottawa, the police were effectively preventing all civilians from accessing public areas and greatly exceeded their powers under the common law,” constitutional lawyer Chris Fleury explained.

“This case raises issues that have implications for protests across the province and the country. We are hopeful that the Ontario Court of Appeal will agree and grant leave to appeal,” he added.

The appeal argues that police overstepped their authority in their response to the 2022 protest of COVID mandates. Police actions at the time included locking down the Ottawa core, establishing checkpoints, and arresting protesters.

In September 2024, Everly was convicted of mischief and obstruction after his involvement in the 2022 Freedom Convoy, which protested COVID mandates by gathering Canadians in front of Parliament in Ottawa.

As LifeSiteNews previously reported, when the convoy first came to Ottawa, allegations were floated that the memorial had been desecrated. After learning of this, Evely quickly organized a group of veterans to stand guard around the clock to protect the area.

However, under former Prime Minister Justin Trudeau’s use of the Emergencies Act, many parts of downtown Ottawa were blocked to the public, and a vigilant police force roamed the streets.

It was during this time that Evely was arrested for entering a closed off section of downtown Ottawa during the early hours of February 19, 2022. He had been on his way to take the 4:25 a.m. shift protecting the Ottawa War Memorial.

He was forcibly pushed to the ground, landing face first. The veteran was then arrested and charged with mischief and obstructing police.

At the time, the use of the EA 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 shot 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.

While the officers’ actions were originally sanctioned under the EA, Federal Court Justice Richard Mosley ruled that Trudeau was “not justified” in invoking the EA, forcing Crown prosecutors to adopt a different strategy.

Now, Crown prosecutors allege that the common law granted police the authority to stop and detain Evely, regardless of the EA.

However, Evely and his lawyers have challenged this argument under section 9 of the Canadian Charter of Rights and Freedoms, insisting that his “arrest and detention were arbitrary.”

Earlier this month, Freedom Convoy organizers Tamara Lich and Chris Barber were sentenced to 18-month house arrest after a harrowing 25-month trial process. Many have condemned the sentence, warning it amounts to “political persecution” of those who stand up to the Liberal government.

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COVID-19

Freedom Convoy leader Tamara Lich says ‘I am not to leave the house’ while serving sentence

Published on October 18, 2025

By

From LifeSiteNews

By Anthony Murdoch

‘I was hoping to be able to drop off and pick up my grandsons from school, but apparently that request will have to go to a judge’

Freedom Convoy leader Tamara Lich detailed her restrictive house arrest conditions, revealing she is “not” able to leave her house or even pick up her grandkids from school without permission from the state.

Lich wrote in a X post on Wednesday that this past Tuesday was her first meeting with her probation officer, whom she described as “fair and efficient,” adding that she was handed the conditions set out by the judge.

“I was hoping to be able to drop off and pick up my grandsons from school, but apparently that request will have to go to a judge under a variation application, so we’ll just leave everything as is for now,” she wrote.

Lich noted that she has another interview with her probation officer next week to “assess the level of risk I pose to re-offend.”

“It sounds like it’ll basically be a questionnaire to assess my mental state and any dangers I may pose to society,” she said.

While it is common for those on house arrest to have to ask for permission to leave their house, sometimes arrangements can be made otherwise.

On October 7, Ontario Court Justice Heather Perkins-McVey sentenced Lich and Chris Barber to 18 months’ house arrest after being convicted earlier in the year convicted of “mischief.”

Lich was given 18 months less time already spent in custody, amounting to 15 1/2 months.

As reported by LifeSiteNews, the Canadian government was hoping to put Lich in jail for no less than seven years and Barber for eight years for their roles in the 2022 protests against COVID mandates.

Lich said that her probation officer “informed me of the consequences should I breach these conditions, and I am not to leave the house, even for the approved ‘necessities of life’ without contacting her to let her know where I’ll be and for how long,” she wrote.

“She will then provide a letter stating I have been granted permission to be out in society. I’m to have my papers on my person at all times and ready to produce should I be pulled over or seen by law enforcement out and about.”

Lich said that the probation officer did print a letter “before I left, so I could stop at the optometrist and dentist offices on my way home.”

She said that her official release date is January 21, 2027, which she said amounts to “1,799 days after my initial arrest.”

As reported by LifeSiteNews, Lich, reflecting on her recent house arrest verdict, said she has no “remorse” and will not “apologize” for leading a movement that demanded an end to all COVID mandates.

LifeSiteNews reported that Conservative Party leader Pierre Poilievre offered his thoughts on the sentencing, wishing them a “peaceful” life while stopping short of blasting the sentence as his fellow MPs did.

In early 2022, the Freedom Convoy saw thousands of Canadians from coast to coast come to Ottawa to demand an end to COVID mandates in all forms. Despite the peaceful nature of the protest, Trudeau’s government enacted the never-before-used Emergencies Act (EA) on February 14, 2022.

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