The Canada Emergency Response Benefit (CERB) – which gave Canadians who lost income due to the COVID-19 pandemic a $2,000 monthly payout – is coming to an end this weekend. Those recipients will be automatically transferred to a modified employment insurance system (EI) on Sunday, while three new recovery benefits await legislative approval. On Thursday, the federal government raised the proposed Canada Recovery Benefit to $500 from $400 per week, to match CERB payments. In light of the changes, what should CERB-dependent Canadians be thinking about now? Here’s what several personal finance experts told BNN Bloomberg this week.
How to get your financial house in order
The winding down of CERB presents a good opportunity for Canadians who may be suffering income loss to get their financial houses in order, according to CTV Chief Financial Commentator Pattie Lovett-Reid. This may involve refreshing your resume or taking a position that isn’t necessarily your dream job. “The recovery is clearly going to be uneven – and certain sectors are going to struggle and take much longer to recover than others. In the meantime, try to control what you can,” she says. “Finding a job right now isn't about finding your dream job. It’s more about creating some financial flexibility in your life – and that means taking advantage of every opportunity to stand out from the crowd.”
CMHC head still warning on home price dip
The head of Canada’s housing authority told BNN Bloomberg’s Amanda Lang this week that the country’s housing market has avoided a worst-case scenario on prices. But that doesn’t mean the housing sector is out of the woods yet. Canada Mortgage Housing Corporation CEO Evan Siddall said Canadian home prices could still decline just shy of 10 per cent due to the economic shocks of the pandemic – a much more optimistic number than the CMHC’s earlier forecast back in May that prices could fall as much as 18 per cent.
Interest in disability insurance spiked during COVID-19, survey finds
More Canadians see a benefit from disability insurance due to the COVID-19 pandemic, according to poll results from RBC Insurance. One-quarter of respondents said buying the coverage is more important now than ever, while one-in-five said they’re likely to purchase the insurance since the onset of COVID-19. “When confronted with a disability, be it physical or mental in nature, the last thing that should be on your mind is worrying about finances,” said Maria Winslow, senior director of Life & Health at RBC Insurance. “The good news is more Canadians are taking the initiative of protecting themselves from the risk of financial hardship should they have to take time off work because of disability.” In its throne speech this week, the federal government pledged to bring forward a disability inclusion plan that will consist of a new Canadian Disability Benefit, but didn't provide further details.
Don’t forget about RESPs as education costs rise
As students navigate the new world of pandemic schooling, it’s hard to imagine what post-secondary school education could look like in the years to come. But it’s safe to assume the cost will continue to rise, says Dale Jackson. In this week’s column, Jackson outlines the basics of the registered education savings plan (RESP) at a time when parents may be feeling overwhelmed by the burden of paying for a child’s education, especially given the added uncertainty around the pandemic.
"There is no income tax withheld on CERB so that’s [something] I suggest Canadians prepare for... A good strategy I recommend is to take out your last pay stub and look at how much income tax has already been deducted. Maybeg go online and use a tax calculator – and then you’re able to estimate what tax implication you’ll have” - Jordan Damiani, senior wealth advisor, Meridian
Sign up for BNN Bloomberg's new weekly newsletter, Home Economics, which aims to help Canadians navigate their personal finances in the age of social distancing and beyond. Have it delivered to your inbox every Friday by subscribing at https://www.bnnbloomberg.ca/subscribe