With growing economic uncertainty during the COVID-19 pandemic, the financial landscape is shifting every day.
Whether it's dealing with sudden unemployment, ballooning debt, or expenses related to working from home, BNN Bloomberg wants to help Canadians navigate these uncharted waters.
That’s why we created Ask BNN Bloomberg, where you can have your personal finance questions answered by industry professionals.
Email or send your questions via video to firstname.lastname@example.org, and we will aim to answer them weekly.
Questions and answers have been edited for clarity. Last names will not be used.
Applying for CERB without needing it
Bonnie in Edmonton:
My son seems to hide income. He has an accountant and has companies that own other companies. He is well off. He applied for the Canadian Emergency Response Benefit (CERB) but I think that was shadily done.
He does not need the money, but is self-employed, so has it showing his income loss. I am not comfortable with the legality and morality of this. What should I do? (May 28, 2020)
Melissa Leong, financial speaker and author of Happy Go Money:
So what should you do if you think a loved one is being shady and applying for government assistance when he doesn’t need it?
Well okay, that is a tough situation and I will not pretend to have the answers when it comes to the morality of the situation, but I can offer you information to help you inform your choices.
I think it’s important to first talk with your loved one if possible about your concerns because you may not have the whole picture of his financial situation. I know people who seem to be well off yet they just have a lot of debt.
So without knowing his situation it may be possible that while he may not need the money as much as others, it’s possible that he could meet the eligibility requirements to apply for the Canada Emergency Response Benefit.
If for example he owns a gym and it’s closed due to the pandemic and he’s lost income, he might meet the criteria. So is that moral? But is it tax fraud? Maybe not.
Now the government has stated that it will have processes and reviews in place to verify the integrity of any claims for assistance, and if your son is caught, the Canada Revenue Agency (CRA) says it will not penalize anyone, they will just make them pay the money back.
You say he’s working with an accountant, and accountants do need to abide by a professional code of conduct.
Now if you take the step to report suspected tax cheating to the CRA’s national leads centre, which anyone can do anonymously, you need to have clear facts and not opinion. This should only be done after a lot of thought as you can’t take it back after you’ve reported it. Good luck. (June 1, 2020)
Financial support for part-time students
Nicole in Toronto:
I am currently an online continuing education student in college who is taking classes part-time. I am working towards a career in early childhood education.
I am not currently working but am receiving Ontario Works. I am not currently eligible for Ontario Student Assistance Program (OSAP). I was wondering if I am eligible for the Canada Emergency Student Benefit (CESB)?
My family could use the extra support right now, but I do not want to jeopardize my ability to stay on Ontario Works as I still have more classes to take. If you could advise me in one way or another I would be grateful. (May 23, 2020)
Jordan Damiani, senior wealth advisor at Meridian Credit Union:
Thanks for the question. As a continuing education student studying part-time, you might be eligible for the CESB. It’s important to note, you currently have to be looking for work and be unable to find it due to COVID-19. Additionally, your program has to be a minimum of 12 weeks in length and result in a diploma, degree or certificate. Additionally, you cannot be receiving the CERB or Employment Insurance (EI).
Now if that’s the case and you are eligible, the CESB benefit pays $1,250 every rolling four-week period. That’s increased to $2,000 if you have an eligible dependant or disability.
Now I did call Ontario Works to confirm and yes, you can receive the CESB as well as Ontario Works benefit at the same time. However, it’s important to note that there is a claw back component.
Ontario Works treats the CESB and CERB the same way. The first $200 is exempt and 50 cents on the dollar thereafter is exempt as well. You also won’t lose your health benefits or have your file closed, which is good news. I hope this helps and all the best to your family. (June 2, 2020)
Managing property rental costs amid closures
Allan in Cambridge, Ont.:
I own an Airbnb in Florida. Since April 1, I have not been able to rent it to anyone. I have ongoing expenses of US$1,000 per month which, because of the virus, is impossible to earn anything. It just sits empty by law.
Is there any Canadian program to offset losses in a business in another jurisdiction? (May 19, 2020)
Kelley Keehn, consumer advocate at FP Canada:
Al your question is a good one and a complex one. So, I weighed in with Fabio Bonanno from CPA Canada for a little bit of help on this one.
Now that property - the Airbnb that you own in the U.S. - it depends if you own it personally or corporately.
If you own it personally, generally speaking those expenses can be used to offset income on your T1.
If you own it corporately, you cannot transfer that over personally.
Now Fabio stresses that you seek the council of a cross-border tax expert, because you want to make sure whether it’s corporate or personal that you are filing correctly in the U.S. because if you don’t, you could be facing penalties, double taxation and missing out on foreign tax credits. (May 29, 2020)
Choosing between CERB and CESB
Jennifer from Montreal:
I have a question regarding the income threshold for CERB and CESB. According to the eligibility, the $5,000 income must have been earned within a 12-month period prior to the date of the application or in 2019.
I am a summer camp worker and started working for early preparation in February but we were forced to close due to the virus.
I applied for the first two periods of CERB because according to the eligibility, my income from 2019 in the summer and February until closure, adds up to $5,000. I hope I am understanding it correctly that as long as the income adds up to $5,000 and I meet the other criteria, I am eligible for CERB.
However, now that the CESB is available, I am uncertain whether I should return the first two payments of CERB and apply CESB as it is a benefit offered for students in particular.
I apologize for the confusion - it is just a stressful situation and being able to get proper information is quite difficult since the verification will only be done next year when all the benefits are over. (May 28, 2020)
Robyn Thompson, personal finance expert and president at Castlemark Wealth Management Inc.:
The Canada Emergency Student Benefit (CESB) provides eligible post-secondary students with some financial support but you cannot collect the CERB or CESB at the same time.
Now the CESB provides $1,250 on a monthly basis from May until the end of August for eligible students. Now if you have a dependant or disability, that amount will increase by $750 a month, to $2,000 a month.
Now you can work part-time, provided you don’t make more than $1,000 in employment income. Now in this case in specific, because you are already eligible and qualify for the Canada Emergency Response Benefit, it makes no sense for you to now try and qualify for the CESB and bring in $750 a month less. (June 4, 2020)
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