In an effort to provide you with commentary related to the numerous programs and policies that have been announced by the Federal government as part of their COVID relief package, we have worked with our in-house Tax and Financial Planning Specialists, Susan Moore, CA, CPA, TEP and Robert Meredith, PFP, FCSI in order to provide answers to the most common questions that we are receiving from clients, banking partners, and external professionals during this evolving situation.

 

Should you wish to discuss how these questions may pertain to your specific circumstances, our team remains fully operational and ready to assist you or a friend or family member you feel could benefit from a discussion with our team.

 

I understand that I can minimize my RRIF payments? Is this something I should consider?

 

The required minimum withdrawals from Registered Retirement Income Funds (RRIFs) has been reduced by 25% for 2020. If you would like to reduce your RRIF payments, please reach out and we can make the applicable reduction for you. If no instructions are received, your payment will remain the same. The reduction must be requested before December 31, 2020.

 

If you have already taken your minimum payment for 2020, based on the rules at this time, the payment will remain as is and cannot be reversed.

 

The potential benefit: This can be an effective method to continue tax deferral on sheltered investments in the event you are drawing income from your RRIF without a requirement for cash flow.

 

The government has allowed for delay in filing income tax – is there a benefit?

 

The filing due date for individual 2019 tax returns of individuals will be deferred until June 1, 2020. Any new income tax balances due, or instalments, may be deferred until after August 31, 2020 without incurring interest or penalties.

 

The potential benefit: If a tax instalment or a tax bill is due, this can act as a deferral for cash flow preservation in the near term.

 

I am or a family member is facing unemployment or employment reduction – how does Canada’s Emergency Response Benefit (CERB) work?

 

The new Canada Emergency Response Benefit (CERB) provides a taxable benefit of $2,000 a month for up to 4 months to:

• workers who must stop working due to COVID19 and do not have access to paid leave or other income support.
• workers who are sick, quarantined, or taking care of someone who is sick with COVID-19.
• working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
• workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.
• wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.

The Canada Emergency Response Benefit is accessible through a secure web portal. Applicants will also be able to apply via an automated telephone line or via a toll-free number.

 

https://www.canada.ca/en/services/benefits/ei/cerb-application/questions.html

 

I have a family member with a student loan – is there support for them?

 

Effective March 30, there is a six-month interest-free moratorium on the repayment of Canada Student Loans for all student loan borrowers. No payment will be required and interest will not accrue during this time. Students do not need to apply for the repayment pause.

 

I or a family member am currently receiving the Canada Child Benefit – are there changes to this program?

 

There is an extra $300 per child through the Canada Child Benefit (CCB) for 2019-20. This will mean approximately $550 more for the average family. This benefit will be delivered as part of the scheduled CCB payment in May. Those who already receive the Canada Child Benefit do not need to re-apply.

 

If you have not yet applied, the application link is here

 

I understand there is an option to postpone payments on mortgages – how does this work?

 

Canadian banks have committed to work with their customers on a case-by-case basis to find solutions to help them manage hardships caused by COVID-19. Canadians impacted by COVID-19 and experiencing financial hardship as a result should contact their financial institution regarding flexibility for a mortgage deferral.

 

I’ve heard about the student hiring program – how does this work?

 

The federal government will cover 100% of wages for students hired under the Canada Summer Jobs Program in the hopes that this will encourage businesses to hire students to allow them to get the work experience they need and earn incomes during the downturn.