LETTER: TRUDEAU’S CERB GIFT BEING TAKEN AWAY BY CRA

LETTER TO EDITOR:

How truly disgusting this situation is. To offer assistance to the people who need it the most, and then pull the carpet out from under them. Those who are responsible have debased themselves to their core.

How truly unhumanitarian. How uncaring the mind that conceives and implements this kind of horror on the hard working peoples who are the backbone of Canada. Small businesses, the self-employed, and their families.

Shame on you, shame on you all. May you never forget the hardships you placed on us. When we needed and counted on you the most, and believed in you, you let us down.

Being critical of a situation without any answers is like yelling at the sky.

The more I read stories about the horrible experiences of fellow self-employed Canadians dealing with the Canada Emergency Response Benefit (CERB) and Canada Recovery Benefit (CRB), the more I know someone needs to resolve this and come up with a positive solution.

I feel that Prime Minister Justin Trudeau has stuck his neck way out for us, but now he has gotten boxed into a corner. After all, he came up with the idea of federal money to assist a large percentage of Canadians who until now have been overlooked and ignored.

Fantastic. By introducing the CERB and CRB programs he has uplifted the self-employed populace that often lose everything if their business fails and that get little if any government assistance after the fact, to the level of every other Canadian that has E.I. available if they lose their job. This is big. He is also being advised by the CRA, which he can’t ignore.

Say what you will but I doubt any of us carry the burden of this guy; if I was offered his job I would decline. So I am presenting here two possible solutions to this problem.

* First: if you are concerned that you may be asked to return the money, you can try to adjust your tax.

* Second: I believe is the real fix that Ottawa needs to apply to resolve this correctly.

The first solution involves self-employed acquiring either a T1-ADJ or T101-06 form from the CRA.

You can then amend the expenses to your 2019 tax return. By removing enough expenses against your gross sales it will increase your net income to the $5,000 mark.

Then you take these same expenses and carry them foward into your 2020 tax year. This also means that these expenses can be applied against tax you would be paying on CERB payments you received.

It’s a win if you manage to pull off sufficient expenses from your 2019 year to get to a $5,000 net making you eligible for CERB and CRB benefits enough to satisfy the CRA. It also means that the CRA is going to have a mountain of paperwork to handle all the adjusted tax forms from 400,000 plus individuals — and likely a great deal more expenses.

But it’s their game, and you’re playing by the rules they set out. Be advised, this will

affect the amount you received this year on your tax return, but still a lot less than the $14,000 — plus that you will have to repay otherwise. The CRA can, and likely will decline you, especially if you received a letter from them asking for repayment.

If in doubt consult a chartered accountant.

The second solution is a lot simpler, viewed from what is really happening here with this whole mess.

Somehow everyone seems to be overlooking the real point for reasons that I don’t understand. They’re getting caught up and fixating on the semantics of CRA net/gross income.

It’s like a CRA sleight of hand trick to distract us from what’s actually going on.

This is not CRA money. These are initially Central Bank of Canada funds. The federal government is issuing bonds and selling them at weekly auctions to banking institutions to fund this program.

The Central Bank of Canada is creating funds using settlement balances to purchase these bonds from the banking institutions through their QE (quantatative easing) program to the tune of $180 billion and growing (a whole other story that we don’t need to get into here, but that’s what they are doing).

This is not a CRA program. They are just administrating it on behalf of the federal government. It has no bearing on what the CRA perspective is when the relevant federal websites said “earned $5,000.”

It seems to me that this amount is a random figure only to verify that you’re actually self-employed.

This was, and is, a brand new program, boldly presented by Trudeau and supported by Bill C-13.

He gets my respect on this one, it really is big.

What is required is that Trudeau must reject the perspective of net income the CRA is advising and pushing so hard on. Leave in place the understanding that these people thought it meant gross earnings when they applied, that also proves sufficiently that they’re self-employed, and just carry through with the program as originally intended.

Tax it, it’s fixed. Simple.

I really think that Trudeau’s intentions were honorable when he brought this out. There’s no way he envisioned this enormous disaster. It doesn’t make sense. It’s bad for votes.

This is far from over. I don’t believe that it is wise, or necessary, to sell off assets and potentially shut down your business, and definitely not in December. Take a deep breath, relax, don’t stress, let it roll into next year, and give some time for the prime minister to figure it out.

Do not repay any money on these programs until it is sorted out. Carry on with business as best as you can during these tough times and don’t worry about this mess right now. It really doesn’t matter at the moment. Be the best at your business that you can be. Be honest, be diligent, work hard, and treat people with compassion during this time.

There’s an awful lot of crazy going on in the world right now and everybody needs your

understanding and support. There are so many frustrated and angry people that would likely appreciate some patience, kindness, and thoughtfulness on your part.

I would suggest trying not to get caught up in the world’s chaos, but instead focus on your own personal efforts, friends, and family. Things will likely look different come the spring.

There are options. Consider them. Consult others. Step up to the plate. Be a voice. Be brave, and fight the good fight.

Above all, as George Carlin and friends recommend: “Be excellent to each other.”

Terry Cowan. He is a self-employed small business owner in Gravenhurst