Health Spending Account facebook logo Health Spending Account instagram logo Health Spending Account twitter logo Health Spending Account youtube logo Health Spending Account linkedin logo

14| What Do Accountants Recommend for Small Businesses Seeking Financial Relief from COVID-19?

Speakers: Curtis Gabinet and Matt Peterson

2020 has been a whirlwind for Canadians, and small businesses have been hit hard. As a result, the Government of Canada announced Canada's COVID-19 Economic Response Plan. On this episode, Chartered Professional Accountants, Matthew Peterson and Curtis Gabinet, discuss: the Canada Emergency Wage Subsidy, the Canada Emergency Business Account, and the Canada Emergency Response Benefit. Listen to find out which financial relief program is the best fit for your business, and what considerations you should be making.

About the Guests

Curtis Gabinet, CA-CPA   joined the True North Accounting team in 2016, and became a Partner just two years later. Curtis connects with people naturally and enjoys building relationships with clients. He is always quick to respond and has a sincere desire to help people. He is a Chartered Professional Accountant (or CPA, formerly known as Chartered Accountant), and has a strong background in small business accounting and tax. Curtis will fight the CRA for you, and work all night to make sure your deadlines are met. He’s patient and happy to explain things to clients several times, making sure no one leaves his office confused. (He’s known for coming up with ridiculous analogies to help.) He genuinely cares about your success and is here to work beside you every step of the way. Curtis is available anytime by phone or email to help you find solutions to problems, big or small.

Matt Peterson, CA-CPA, CBV loves business and sees small business owners as the backbone of Canadian society. He earned his Chartered Accountant (now called Chartered Professional Accountant, or CPA) and his Chartered Business Valuator designations with PriceWaterhouseCoopers in Calgary between 2009 and 2014. He is passionate about business and wants to help small business owners achieve their goals.


About the Host

Morgan Berna is the host of Olympia Benefits’ podcast, The Small Business Mastermind. Her background is in marketing, journalism, and broadcasting. Passionate about small business, she aims to create content that inspires and educates listeners.


Curtis Gabinet: It felt like they were changing it every single day, every morning. During tax season, our busiest time, we were glued to the TV and the news articles and everything trying to see what changed that morning so we could advise people as we went.


The Importance of Emotional Intelligence podcast image with Listen Now button


[intro music]


Morgan Berna: You are listening to The Small Business Mastermind, a podcast created to help small businesses juggle business, finance, health and wellness. I am your host, Morgan Berna. The Small Business Mastermind is brought to you by Olympia Benefits. If you are looking to reduce your healthcare costs, visit


Thank you so much for tuning in to this episode of The Small Business Mastermind. Today we have Curtis Gabinet and Matthew Peterson back on from True North Accounting. They are going to be talking to us about Canada's Covid-19 economic response plan and the programs that fall within it. Specifically, we will be talking about The Canada Emergency Wage Subsidy, The Canada Emergency Business Account, and The Canada Emergency Response Benefit. As well we will be talking about ways to support your local economy. This episode has a ton of great information in it for small businesses so let us jump right in.


Curtis Gabinet joined the True North Accounting team in 2016 and became a partner just two years later. Curtis connects with people naturally and enjoys building relationships with clients. He is always quick to respond and has a sincere desire to help people. He is a Chartered Professional Accountant and has a strong background in small business accounting and tax. Curtis will fight the CRA for you and will work all night to make sure deadlines are met. He is patient and happy to explain things to clients several times, making sure no one leaves his office confused. He is even known for coming up with ridiculous analogies to help. He genuinely cares about your success and is here to work beside you every step of the way. Curtis is available anytime by phone or email to help you find solutions to problems big or small.


Matt Peterson loves business and see small business owners as the backbone of Canadian Society. He is Chartered Professional Accountant and got his Chartered Business Valuator designations with Price Waterhouse Coopers in Canada between 2019 and 2014. He is passionate about business and wants to help small business owners achieve their goals.


Alright. We are back with The Small Business Mastermind, and this is an exciting episode because it is actually our first time with some return guests. We have got Curtis Gabinet and Matthew Peterson back again from True North Accounting.


Matthew Peterson: How are you doing? Thanks for having us, Morgan.


Morgan: Thanks so much for being here. We were talking today about four different financial options the government released during COVID-19, where we are at right now and what the impacts are going to be. We are going to start off with Canada's COVID-19 economic response plan. So, why was this created and how long in the future is it currently going for?


Matt: Trudeau created this whole strategy right when COVID-19 was changing everything and really at a scary point back in March. The idea was to support people who had to shut down their business based on the government mandated ruling. A lot of businesses completely shut down, a lot really scaled back and there are just a lot of people in a tough spot and needed to keep paying the bills. The last thing the government wanted was for payments and economy just to grind to a halt. So, for example, if you are a small business owner and you have your payables due every month, it was very tempting to be like, "I do not know what is going to happen. I am not going to pay any of these bills," and then cash just would have stopped altogether. If I stopped paying my bills and then those vendors did not get the cash from me and other people did the same thing, then they stop paying their vendors and it is just a chain reaction in the whole system the way we know it would have been really bad. So, the idea was to inject cash into the economy and get people spending as normal as they normally would. The Government of Canada can borrow at some of the most attractive interest rates on earth. They can borrow for next to nothing. So yeah, they are going into a huge deficit but at the same time they were getting this capital cheap, injecting it right back into the economy and trying to prevent the hoarding and the fear and just all those factors that could come together and grind everything to a halt. This is really expensive, but they actually worked quite fast to get these payments. Like that 2,000 bucks a month they got that going right away as soon as you applied and the wage subsidy took a little bit longer and then the $40,000 loan took a little bit longer, but as the week's went on in March and then into April, they just kept assessing the need. The result was that I do not think Trudeau could have spent money any faster than he actually did, but it was really needed. It was uncertain times and so there is a whole list of these programs now to help the economy stay on.


Morgan: Absolutely. Curtis, did you have anything to add to that?


Curtis: Yeah, obviously they had to do something. I have spoken with quite a few people where it is kind of the consensus that I really do not envy. Just picture the group of people around the table trying to sit down and hammer some of these programs out in the details and how quickly they had to do it. I really do not envy being in those positions because they had to come up with some significant releases to get the funds into the economy, get these programs out. They knew there was going to be people potentially even fraudulently taking some of the funds the CERB, one they have talked about recently. I guess they did a pretty good job of putting them together quickly and then obviously reassessing them as they went and making tweaks and changes. At some points it felt like they were changing it every single day. every morning. During tax season, our busiest time, we were glued to the TV and the news articles and everything, trying to see what changed that morning so we could advise people as we went.


Morgan: That must have been very crazy time for you guys.


Curtis: Yeah. With the extension to taxes and all these programs coming out, it was a lot. A lot of accountants I am sure they had fun with it for sure.


Morgan: Before we jump into some more information on the programs. Do you feel like there is anything that was a major gap in the plan? And if so, do you have any resources you suggest for people outside of the other three we are going to talk about today?


Curtis: There was some gaps, initially, as we just mentioned they put them out so quickly there was almost bound to be something missing, somebody forgotten. Right? I think initially, they just put them out as quickly and all-encompassing as they could, as they tried to but obviously, everybody did not meet every piece of criteria for every single program. A lot of people that did not have a payroll account, small businesses that were drawing dividends as their form of income as opposed to paying a wage. Those people seemed to be missed entirely right off the get-go. The CERB initially for dividend income, if you were drawing dividends out of your own corporation, your own small business, you were not even included in the CERB until they obviously must have had quite a bit of backlash and they made a change that program pretty quickly. But yeah, people that were paying themselves dividends. Rent relief, people that are renting right now just are not a homeowner and are renting currently. There has not been any real relief for rent on a residential basis. They have started to roll out some commercial ones. Matt, do you want to...?


Matt: So, everything was changing so quickly and they are putting together these relief packages and they were very limited to start and then they would expand it as they realized "Oh, this does not apply to this whole population or segment of Canadians." And so then they adjust those and that is part of what kept us so busy in March and April. We have webinars going and we have had this COVID page on our website. We are updating it twice a week, three times a week for about nine to ten weeks there as these programs would just change as the government realized "Oh, we were leaving out this whole section of people.


Curtis: In addition to people that just paid themselves dividends, a very attractive business model is one where you only hire contractors. There is a lot of landscaping companies and in every type of business really. Gyms, for example, all their personal trainers are all self-employed contractors. And then if the owner also paid himself dividends, they kind of fell right through the cracks. The tenants, I would argue, if their landlord did not give them a break even though they were getting a break on their mortgage, that mortgage deferral should have helped a lot of renters. But yeah, you cannot control what your landlord passes through to you. But yeah, there still people like if you started a company in the last year and you are just growing and maybe you had no revenue a year ago or even though you took a big step back from your projections, you did not see a 15 or 30 percent or even a 70 percent decline because you were so new. There are some of those folks that are in a hard spot too. But the government has done a good job to plug all the gaps as they expand the programs and as we get deeper into the pandemic.


Morgan: Let us start talking then specifically about the programs that we do have. Let’s start with The Canada Emergency Wage Subsidy. What makes a business eligible for this and briefly what is it?


Curtis: Okay, I can take this one. The intent for this program is to keep people on payroll. Keep those paychecks coming in. The withholding tax on paychecks is the main revenue source for the government. When you get your paycheck, like it should be four grand but you only get three grand in your bank every month. That extra thousand dollars, that is the lifeblood of our government. It is steady payments every month and that is how they budget. That is how they kind of keep the company running. The whole intent was to keep those paychecks coming in. So when the government- like for an eligible business you had to- if your revenue declined in the first four weeks of the program to March 15th to April 11th, you needed to show that you are going to decline at least 15 percent due to COVID-19 and then you would qualify to have a subsidy check sent to you for 75 percent of the payroll expense for that period. And then it was originally set to be 12 weeks long so then split into three four-week periods. It was like March 15th, April 11th, and then April 12th to May 9th and then May 9th to June 6. They have since expanded that to run to August 29th. It seems like a very expensive program like the government is just sending you checks for as many employees as you have and it can be at 847 bucks a week times 12 weeks is like just over 10 grand. So, 10 grand per employee. But when you think about it, a lot of that money is going to come right back to the government in the form of payroll remittances, and I guess all those employees paying their bills and injecting the money back into the economy. It is a big program. But I think there is a return on investment out there that the government is banking on, kind of seeing that money come back within a year or two. Again, they just borrowed a big chunk of money and will get it back eventually.


Matt: I wanted to chime in. So, part of the eligibility with the program like they give these... here is period covering a part of March all the way through to a chunk of April. They made it a little more complicated than they could have I guess. But there is a lot of calculators out there on lot like software and they have their own calculator as you go through the application process to make it as easy as possible. But for most people if you are running a small business, if you are looking at "Hay, am I eligible?" If you have some form of a bookkeeping software or something like that, they have kind of taken "Okay, what is your March revenue in 2020 compared to your March revenue in 2019? Did you experience a 15 percent drop?" The following months is a 30 percent drop if you did. But if you qualify for period one, you automatically continue to qualify through the rest of the period or the rest of the periods. However you are recording your revenue. They do not want you to change how you are doing it. You are not supposed to "Okay, I am going to stop invoicing." You are supposed to continue with the same way you have always recorded your revenue. And then if you have got a bookkeeping accounting software you are using or an accountant or bookkeeper that is doing it for you, you should be able to pull some form of a report to show. "Okay. What was my March revenue 2020? Let us compare it to 2019. Did I hit that decrease, the 15 percent March? Great. If not, they even opened it up to cover. Okay, say you were not even in business in '19. So they allowed you to look at what is your average revenue from January and February of 2020 and compare that to March. If you walk through the- like you can go on to the government of Canada's website and take a look at the more specific details of the eligibility criteria, but most small businesses are going to tick most of the boxes as long as they have that revenue drop. So, just comparing period to period to see if you tick all the boxes. That is the main step in seeing if you are eligible and it can be backdated too. So if you have not already done it, you can still claim it back to the period when it started.


Curtis: Yeah, and the government does have their calculator but it is so complex and convoluted. I did not even understand it. We built our own, which is available on our website and it is way easier to use. If you are just trying to calculate whether you are eligible and then calculate the actual wage subsidy. There is probably a lot of people that have come out with them now, but the government the CRA1 is just hard to hard to use. One other thing to note on the wage subsidy, if you do not meet the criteria for the 75 percent wage subsidy, there is the 10% temporary wage subsidy. This was the first program announced and then they came out with the queues, which is the Canada Emergency Wage Subsidy. That is a 75% program and that is the main program, but if you do not qualify for that, you may qualify for the 10% subsidy wage. It helps, do not forget about that if you do not qualify for the 75% one.


Morgan: Yeah, we will be sure to link that tool below. For a business that uses this subsidy, are there any long-term impacts to consider?


Curtis: There is one major one. The subsidy that you receive as small business, that is going to be considered taxable income. So, the government is calculating this, you are going through the process of submitting the application. You get your check, you get your direct deposit from the government. You cannot forget that they are going to tax it. So they are going to treat that as normal taxable income for your company or your business or your sole proprietorship and they are going to tax you on it. It will be treated like normal income. That is one of the biggest things to remember because it is pretty sizable. They are going to scrape it back, they will take their chunk on it.


Matt: Yeah, and they will want to come back and verify that you actually qualify. They would want your payroll records for the period that you are claiming, they want to see all that. They will likely want to see some sort of backup to support your dropping revenue and explanation of how or what was your method of revenue recognition. Was it cash or was it accrual? Was invoice generated or was it cash deposited? You have to choose one method and stick to it. I think they will be busy auditing, which again is putting people back to work with the return on investment on it. But yeah, you just want to make sure you have all your information document as you go. Because those questions from the government might not come for a year. It might be next summer or maybe next fall and then you do not want to be relying on memory and shoddy books. You want to make sure you have your documentation tight right now.


Morgan: Yeah. Before we move on, did you have any other points for that one?


Curtis: Tracking the subsidy calculation per employee, that is going to be important because the T4 that end up getting created and given to employees or owners or whoever is being paid a wage, that is going to have to be included in the T4 to indicate how much of the wage subsidy applied to that person, that individual.


Morgan: All right. So, onto the next program then. What is The Canada Emergency Business Account? It says it is interest-free. Are there any considerations a business should be taking when looking into this alone?


Curtis: CEBA as people are calling it, they say it is a $55 billion program and really the point is to help small businesses. They know there is going to be a shortage in cash. They expect obviously the COVID crisis is kind of slowing the entire economy as a whole. Here is a loan and it is going to be interest-free. It is out there to help small businesses with covering normal operating expenses throughout the decline or when you are going to have reduced periods of revenue, maybe you have shut down entirely. So, here is a up to a $40,000 loan and it is going to be interest-free up to the end of December 31st, 2022. No interest charge during that period. If 75% of it is repaid by December 31st, 2022, 25% will be forgiven. If you take the full $40,000 loan, you repay 30,000 by the end of 2022. 10,000 will be forgiven by the government. They are government-backed loans, they are all being administered by the banks, by the individual financial institutions. That is how you go through the application process through your bank. And yeah, if it is needed it is a really, really attractive lending option. Well, obviously, interest-free loans are not something you are going to stumble across every day. It is definitely something to take a look at if you need it and it can help you to support those normal everyday operating expenses. You got to pay payroll. You got to pay utilities. You got to pay property taxes on your building if you have one. You have got to pay rent, maybe insurance, fuel, just getting to and from job sites possibly.


Matt: A couple of things to be aware of with this program. It is great and it is interest-free money that will help a lot of people and then that forgivable portion just makes it even that much more attractive. Keep in mind this is debt to the government essentially, if you default on paying back that 30 grand, the bank will get paid by the government and then you owe the government. When it comes to like if you have to go bankrupt or just defaulting on loans creditor protection, I can almost rather be in debt to the bank than the government because you cannot really shake off that debt as easily. It is basically tax debt. You cannot really run from that. Just keep that in mind like I would not take it if you do not plan on being able to or if you know you are not going to be in business, I would not take it. That is one of the criteria. Is that your governing concern and your intent to be in business. That is one area of caution, I guess, and just knowing the operating expenses that qualify under this program, some non-deferrable operating expenses like Curtis listed off. Just track it as best you can. Some people have been- the way it works is you apply to your bank and then your bank deposits the 40 grand. Not everybody gets 40 grand but up to 40 grand goes into your checking account and then you set up a term loan or if you log into your online banking, you will see that $40,000 loan and it is called CEBA. I guess I would almost move that 40 from your checking account into your savings. And then as you have qualifying expenses, you can make those transfers to the dollar. If you have a $3,000 payroll run, you have to do and it is $3,320.19, transfer that exact amount from the savings to the checking and then on your payroll just so you have a paper trail. You know what you actually spend that money on. Nobody knows how hard they are going to be on the type of expenses, but for the typical IT Consultant or Engineering Consultant, these self-employed people, marketing freelancers, when there is not a lot of business expenses like you have some insurance and bank fees, maybe a little bit of software costs, 40 grand can be tougher for companies like that to come up with. Payrolls are the big one. If you are ever in doubt, if you are in that situation, you have a corporation, you qualify but you have always paid yourself in dividends - maybe if you do not think you can hit that 40,000 in actual operating expenses, you are not paying rent, maybe get yourself on payroll just to be safe because you cannot use it to pay yourself a dividend. You cannot use it to pay yourself a bonus. But if you get yourself on a regular payroll remittances and it is not increasing your own compensation, it is just changing it from dividend to payroll, that would be something to consider. But yeah, if you are worried about that, you can always give us a shout.


Curtis: Yeah. Be careful not to- there is a few other things they list out there where you cannot use it. For capital purchases. You want that new truck, you cannot go use this $40,000 loan to go get the new truck. You cannot pay down existing debt. So, just do a little bit of research. It is all listed on their website. They give some pretty good examples of what the non-deferrable business expenses are and they have announced and have made a few statements saying they are going to look into it. They are going to chase this later on down the road to check up on people. But they have given really no guidance on how or what you are going to need to produce or show or track. So, try really do your best like Matt had mentioned. Try to separate that, have a separate savings account. Have a separate spreadsheet. You are tracking what you are spending these dollars on. A lot of people have been worried about "Well, I am going to get this loan. It is going to go into my general checking account and it is going to be mixed with everything. How do I--" We have not got any guidance on that yet. So, really you just want to be comfortable that you could support what you have been spending this $40,000 on, just so you do not have to backtrack a year and a half when they ask you for some records. A good point to mention here. They initially had the criteria to be eligible for it based on wages paid. You needed to have between $40,000 to 1.5 million in wage expense to qualify for this. They quickly realized that this is missing a bunch of people. There are so many small businesses that a lot of the ones that we deal with specifically, that are not that big. Maybe they are not paying wages, maybe they pay themselves a dividend and they have someone else's working for them. It is not making $40,000 and all of a sudden they just did not meet the criteria and they did not even have access to it. So, they have announced a few changes. They brought that $40,000 down to $20,000 and then they also announced an entirely different form of eligibility process, which they still have not released as of today, June 16th. They still have not fully released how the new applications going to work, but they now include eligible operating expenses between $40,000 to 1.5 million. Even if were without payroll, you were not paying anybody a wage, you were paying going back to earlier part of the conversation. Say you were paying contractors and your whole business model is surrounding paying contractors instead of employees. So, if your contractors throughout the last year, they are going to look at 2019 and I think 18 as well. If you have eligible expenses contractors regular business expenses of upwards $40,000 and all the way up to 1.5 then you can still get access to it. But they still have yet to fully release on their website, even right now it still says that they are working on releasing this new application for the expanded criteria.


Morgan: If a business is going to need longer than that December 31st 2022 to repay this, would you suggest they look into a different loan type or is this still the best option?


Matt: If they do not pay back by December 31st 2022, that is fine. They just do not get that 25 percent forgiven up to 10 grand. They do not get that forgiven and then it converts to a three-year term loan at a 5% interest rate. Those are not unreasonable terms by any means. Prime is like three something right now. A lot of businesses will be at like prime plus one, which would be like four percentage change. So, 5% interest rate is fairly reasonable. It is pretty standard on government debt, sort of have that another three years to pay that off. Consider it in your own financial picture and if it is right for you. But yeah, you do want to look forward which is hard to do these days when you just needed the cash. I think if anybody qualifies they are probably just going to apply for it anyways, unless they know they are not in a safe financial position.


Curtis: One last thing. Do not do not think that you can go capitalize on this, pull it out, pay down your line of credit personally or throw it in an investment account December 30th of 2022 comes around, move it back into the company and repay 30,000 and your $10,000 up on the government laughing all the way to the bank. Well, when they come and ask some questions and want some verification on what has been done with the loan, you are probably not going to tick all their boxes and the CRA agent is going to be a little ticked off when he is reviewing that file. So, just make sure you read through what is eligible, what is not and if it feels wrong, it probably is. But if you need it to support your business and time of significant uncertainty, then by all means it is a good-looking program.


Matt: Yeah, and Trudeau has been very clear. He really trusts people and I think if when he finds-- he has wanted to press criminal charges against people abusing these programs and come after them with a hammer and really make him pay if they are deliberately trying to take advantage or defraud the government. So, expect to have questions asked and just be able to support every application that you make. Because a lot of these programs are available to multiple people or one business can do the loan and the wage subsidy and when they layout people that they cannot keep on the wage subsidy. Those people will be collecting CERB or EI and you just want to have all your all your ducks in a row for each program.


Morgan: Awesome. With that let us move on to the next program then. What is the Canada Emergency Response Benefit and who is eligible for this?


Matt: You are going to take this Curtis or should I?


Curtis: I can. CERB, tomayto or tomahto, I have been calling it CERB (“curb”), other people seem to be calling it CERB (“serb”). It is a taxable benefit of $500 a week. So $2,000 a month and it is for eligible people. Initially, they announced up to 16 weeks. They have just as of today June 16th this morning, they announced and we get back to how quickly things change. They announced it is going to be extended another eight weeks. So, $2,000 a month and the purpose is really to support anyone that has had any kind of financial impact because of the COVID crisis. If you have been laid off, if you lost income, if you have had a downturn. If you have been impacted by the financial or by the COVID crisis, then you are going to get financial support. So, $2,000 a week, either a check's cut or when you submit your application online, you can fill out the direct deposit info so it goes right into your bank account. And then every period, so every four weeks is what they call another CERB period. You will go online again and redo the application to say that you qualify again. It is really just meant to bridge the gap for anyone that has been affected and has a loss of income because of how quickly everything changed in the world.


Matt: Sorry, I am just going to add. This program is just kind of a catch-all for those that do fall through the cracks. It is not all that hard to qualify but you do have to be out of work because of COVID. It is meant for people that would normally collect EI but they do not qualify because they are self-employed or they are a contractor or something else is going on. They cannot get EI or their EI has been exhausted and they still have this funding. You have to take advantage of the eight-week extension which takes it from twelve-week or from sixteen-weeks to 24-weeks for a total of 12,000 up from 8,000 that was just announced. To take advantage of the extension, you have to have already exhausted your EI, that is one thing that just came out. Curtis, you go on.


Curtis: Eligibility criteria. If you hit your google to CERB, you will find it pretty quick on CRA's website. You have to have earned at least $5,000 of income in 2019 to be eligible. You have to indicate that you have a loss of income because of the crisis. The eligibility criteria are pretty slim. If you if you have had a loss in income, there is a few different I guess qualifications. If you are earning self-employment income, you can still earn up to $1,000 and remain eligible for CERB. But yeah, if you had at least $5,000 of income in 2019 employment or dividend income and you have lost your income for that at least a two-week period in that four weeks, then you are going to be eligible and you will get it. It is a pretty easy application process online. You really just tick in a couple boxes to say you are eligible. They have got a phone number 1-833-699-0299. You can even apply over the phone and it is there for anybody that has been at a loss of income.


Matt: I will just going to add. What will maybe catch some people is, if you quit your job, you will not qualify for a CERB. You have to have been let go or been out of work because of COVID. So, voluntary like just leaving your job during this time does not mean you are qualified. If you have applied and you are getting these payments, keep in mind, you are probably going to have to pay them back unless you were out of work because of COVID. The other thing, this is going back a couple months but in the first couple of weeks there is 11 million applications to start collecting CERB and only 7 million of them were unique applications because you can apply through Service Canada and you can apply through the CRA. They wanted to make it easy to get the money and the government always just as soon as the application was submitted and everything look good, they sent the money within three days, you are getting paid. There is at least four million of these--


Morgan: Are there people double applying?


Matt: Yeah. People were getting double payments in that first period and if they have continued to get the two grand or 500 bucks a week. Yeah, they are going to have to pay that back and it is taxable income as well. We will get a T4 or some sort of slip next year that something is very important on their taxes next year. But yeah, I think there is going to be a lot of people that need to pay back that 8 grand so it is going to be a fun fall for others.


Morgan: This will be paid back regular tax season next year?


Matt: The money you collected is taxable so you will not pay tax on it. In a normal circumstance, you collected your 8 grand and if you are at 25 or 30 percent tax rate then you are going to owe 2 grand, 2,500 bucks in tax on that money. If you collected double payments, or if you are not qualified, each step to pay back the 2,000 bucks. If it was deliberate and they find that you are trying to game the system or take advantage of it, I am sure there will be some penalties and interest on that money as well.


Curtis: Yeah. They released a statement saying that up to 5,000 dollars of fines and six months in jail time if you are fraudulently trying to play the system and penalties equal to double of what you claim fraudulently. If at any point you think you do not meet the eligibility requirements and you are still collecting it, you are going to have to send that back and they have got a few different ways similar to paying your taxes or paying an installment payment on your taxes. Either through CRA's my account, online banking, cutting them a check back. You can just you can send the money back to the government. There is already ways right now if you are collecting it and you are like, "Oh I forgot to indicate that I am no longer eligible and I collected another $2,000. I have been working for the last two weeks. You got to make sure, they are going to figure it out so you are better off sending them back the $2,000 right now. There is already a process to do it. You can go through their website and pay it back to them right now.


Morgan: That is good. Did you have anything else to mention on that one, that program?


Matt: I guess other than like when or how you will be taxed on it. Yeah, it will just be on your personal taxes next year. That will be due April 30th if you do owe it, April 30th 2021.


Curtis: They are not withholding any tax, you get the full $2,000. Think of it similar to another T4 that you get. It is going to be lumped in with all your other forms of income. You are going to owe tax, but nobody is withholding any tax like a normal T4 on that. So there will be tax. It is going to in most situations everyone's tax situation is a little different. It is going to create some taxes owing more than likely. So yeah, if you look at an average, try and figure out your average tax rate, add-on "Okay, for every 2,000 dollars 25% of it might be owing back come tax time. Taxes are due April 30th. April 30th of 2021, you are going to file or you are going to have your taxes owing. For every 2,000 dollars, it could be $500 has to go back to the government.


Morgan: Those are all the questions I had about the specific programs, but I wanted to ask you guys. You are both big supporters of the local businesses in your area and I was curious if you had any tips for just supporting our local economy during this time?


Matt: It is so easy right now. I think the biggest thing is to pay attention to how you are buying stuff. It is so easy to like "Oh, you need a new iPhone case or anything." It is so easy just to go on Amazon and order it. But in Calgary, we were getting hit by all sides like oil and gas is down. Anyways, everything is just compounding it. It is tough days here for sure and across the country just because the COVID. Rather than just ordering what you need from Amazon, try to find it locally. A lot of these retail stores and shops and just all these companies that have really made efforts to go online. So you can guarantee anything you find on Amazon you can probably find it locally. Amazon is not the cheapest, it is just the easiest. It just takes a little bit extra but it means a lot. There is a lot of ideas out there like buy gift cards now to keep your favorite restaurant going or
your favorite retail shop. Those are a couple things. Yeah. Just trying to keep the money in your neighborhood. That would be my biggest piece of advice to help the city out.


Curtis: Yeah, spend local. A lot of shops are just reopening now. Head out, take precautions, head out and spend local.


Morgan: Great. Thank you both so much for answering all those questions. Could one of you just chime in on where people can find you online and your locations for if they would like to chat more.


Matt: Yeah, sure. is our website and we have two locations. We have one in Okotoks and we just opened one in Bridgeland, which is 210 7th Street Northeast, behind the 7-Eleven so you can find us there. We are on social media, Instagram, LinkedIn, Twitter and we have been keeping people up-to-date on those social channels almost daily through this whole thing. As news comes out, Trudeau says it first then the news channels pick it up and it eventually goes to the CRA website. Once it has been vetted and verified all the accurate details, turn up on the CRA website. And then we try our best to translate it into words that normal people can understand rather than CRA talk. So yeah, we were good intermediary between Trudeau's podium explanation and the actual how it applies to you. Yeah, you can check out our website. We have COVID page that that is updated regularly. We have done some webinars that you can watch as well.


Curtis: We have got a huge amount of information on our website. We focus mainly on small business. We do free consultations, and we even got a quoting tool on our website as well. If you own, operate, run a small business, give us a call. Reach out.


Morgan: Perfect. Thank you both so much for joining us again on The Small Business Mastermind.


Matt: Thanks for having us, Morgan. This is a lot of fun.


Morgan: Thank you. Yeah.


Matt: We were happy to provide some knowledge or some easy explanations for people.


[music outro]


Morgan: Thank you so much for tuning in to this episode of The Small Business Mastermind. I hope this one answered some of the questions you might have around these different programs. I encourage you to reach out to Curtis and Matt at True North Accounting for any further help you need and do not forget to subscribe to the podcast by visiting All right, that is all we have for this episode. I will be talking to you again very soon.