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Keep It Simple S…ubsidy

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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.

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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Freedom Convoy leader slams Canadian gov’t agency for praising its treatment of protesters

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From LifeSiteNews

By Anthony Murdoch

Tamara Lich begs to differ with the Department of Public Safety’s claim that it acted with high ‘moral’ standards during the Freedom Convoy protests.

Freedom Convoy leader Tamara Lich is calling out Canada’s Department of Public Safety for “lies” after it boasted via an internal audit that it acted with a high “moral” standard in dealing with the 2022 protest against COVID mandates. 

Lich made the comments on X earlier this week regarding a recent Department of Public Safety internal audit that heaped praise on itself for having “ethics” as well as a “moral compass” in dealing with the 2022 protesters.

The reality is that the self-boasting report comes after it was made known the Department of Public Safety had a role in spreading false claims that the Freedom Convoy was violent and was somehow funded by Russia.

As reported by Blacklock’s Reporter, the audit did not mention the false claims it made against the Freedom Convoy, which were used to allow then-Prime Minister Justin Trudeau to impose the Emergencies Act (EA) to clear out the protesters.

Indeed, in 2023, as reported by LifeSiteNews, disclosed records showed that Canada’s Department of Public Safety fabricated a security bulletin that claimed the Freedom Convoy protesters had plundered federal office buildings in an apparent attempt to discredit the movement.

The fake bulletin was sent out on January 28, 2022, at 3:54 p.m. and read: “We have received confirmation that protesters have started to enter office buildings in the Ottawa downtown core and are allegedly causing damage.” 

The department’s recent boasting about itself, however, claimed that “(v)alues and ethics serve as a moral compass, guiding and establishing benchmarks for behaviour, decisions, actions and culture within organizations, including the public sector.”

“Federal public servants have a duty to preserve public trust and uphold a professional, non-partisan public service,” the internal audit noted.

Lich: Trudeau officials spread ‘lies, misinformation, disinformation, and division nationwide’

“It revealed a cycle between media and law enforcement, each repeating unverified talking points from the other. Despite widespread support along highways, overpasses, and communities, the CBC and other taxpayer-funded media missed an opportunity to unite Canadians,” she wrote.

Lich believes that Trudeau’s governmental departments “instead” spread “lies, misinformation, disinformation, and division nationwide.”

“Consequently, some of us face regular death threats, hate mail, threats of violence, and public harassment,” she wrote.

“Thankfully, we receive much more love and support, but the damage is done, which is exactly what they were aiming for.”

The sentencing trial for Lich and fellow Freedom Convoy leader Chris Barber took place in July at a hearing. Earlier this year, they were found guilty of mischief in their roles in the 2022 convoy.

As reported by LifeSiteNews, Lich revealed that the Canadian federal government is looking to put her in jail for no less than seven years and Barber for eight years.

A sentencing hearing has been scheduled in their case for October 7 in Ottawa.

The Freedom Convoy protest took place in early 2022 in Ottawa and featured thousands of Canadians calling for an end to COVID mandates. 

In response, Trudeau’s federal government enacted the Emergencies Act on February 14, 2022, to shut down the popular movement.  

Trudeau had disparaged unvaccinated Canadians, saying those opposing his measures were of a “small, fringe minority” who hold “unacceptable views” and do not “represent the views of Canadians who have been there for each other.”  

Trudeau revoked the EA on February 23 after the protesters had been cleared out.  

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Why FDA Was Right To Say No To COVID-19 Vaccines For Healthy Kids

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From the Daily Caller News Foundation

By Monique Yohanan

The FDA’s decision not to authorize COVID-19 vaccines for healthy children has drawn criticism. Some argue: If parents want the shot, why not let them get it for their kids? That argument misunderstands what FDA authorization means — and why it exists.

The FDA often approves drugs that carry risks or have imperfect evidence of effectiveness. This is a tradeoff we sometimes accept for people who are ill: when someone is already sick, the alternative is untreated disease. Vaccines are different. They are given to millions of healthy children. This requires a higher standard, not just evidence for safety and immune response, but clear, durable clinical effectiveness. Approval for optional use isn’t neutral; once the FDA authorizes a vaccine, it carries the full weight of institutional endorsement.

Measles provides an example for how the FDA approaches vaccine approvals. Before the measles vaccine was introduced in 1963, the U.S. saw 3 to 4 million infections, ~48,000 hospitalizations, ~1,000 cases of encephalitis, and 400-500 deaths each year. Infants bore the brunt of the most severe outcomes.

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That created a natural instinct: why not vaccinate the youngest and most vulnerable? The initial measles rollout was to 9-month-olds, but within two years that timing was changed to children who were at least 1 year of age. This was not because younger babies were not at risk or that the vaccine was riskier for them, but because it just didn’t work well enough to justify a universal campaign.

The knowledge of the particular risk younger infants face has led to continued research on the effectiveness of measles vaccination in that group. A 2023 trial of the combined measles/mumps/rubella (MMR) vaccine in infants aged 5-7 months, and subsequent safety and immune studies in 2024 and 2025, produced consistent results—safety and the ability to generate antibodies were demonstrated, but a durable response and protection against hospitalization were not.

That is why the FDA does not approve MMR for routine use in healthy children younger than 12 months of age. It is also precisely why getting back to herd immunity for measles is so essential: the youngest infants can only be protected if the rest of us are immunized.

What’s the evidence for COVID-19 vaccination in infants and children? It generates robust antibodies, often higher than in adults. But clinical benefits are modestshort-lived, and inconsistent. It is nowhere near the level of proof U.S. regulators require before making a vaccine universally available to healthy kids.

Some argue that even if benefits are modest, parents and pediatricians should be free to choose. But FDA authorization is not about personal preference; it is a stamp of approval for more than 70 million healthy children. Statistical safety is not enough. At that scale, even rare risks mean real harm to real children. COVID-19 vaccines were originally authorized in the hope that immune responses would translate into population-level benefits. For healthy children, the initial optimism sparked by early encouraging signals has steadily given way to three years of disappointing clinical results.

The lessons from measles are clear: safe but minimally effective isn’t enough. We don’t authorize MMR for 5-month-olds, even to parents who might want their children to get it. COVID-19 vaccines for healthy children should be judged similarly. This is not because there is a lack of any benefit, but because it doesn’t rise to the level we use for other vaccines. Only if and when proof of clinical effectiveness becomes available should authorization be reconsidered. At this time, the FDA is right to say no.

Monique Yohanan, MD, MPH, is a senior fellow at Independent Women, a physician executive and healthcare innovation leader, and Chief Medical Officer at Adia Health.

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