Tag: covid-19 pandemic

Categories
Brandon Blog Post

TO DEBT DO US PART BUT I CAN’T PART WITH MY LIFE-CHANGING COVID-19 ECONOMIC RESPONSE PLAN

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

To debt do us part introduction

To debt do us part many times is confused with Til Debt Do Us Part. That of course was the Canadian television series created by Frantic Films for Slice in Canada, Zone Reality in the UK as well as CNBC in the United States. It was hosted by Gail Vaz-Oxlade, who weekly advised a couple that is in debt and also having troubles in their marriage or relationship.

Over the last couple of days, I read two crazy articles involving what people have done with federal coronavirus relief money. One from the United States and the other from Canada:

The title catchphrase to debt do us part seems particularly apt to me in the context of the Canadian federal government COVID-19 Economic Response Plan to assist Canadians and their companies. Especially if people are going to do crazy things with money they desperately need to live on.

With that as the backdrop, I thought it would be a good time in this Brandon’s Blog to review where we are at this stage of the pandemic and why no matter how much good information about money management there may be available to people, some will insist on to debt do us part.

This 2020 to debt do us part is something brand new

The economic pain and worry Canadians and businesses are experiencing this time around is something brand-new. It is hitting people and companies that have always made their repayments on time. To debt do us part was never part of their vocabulary or lifestyle. They’ve never needed to get a deferral. It is very unpleasant and unsettling. To debt do us part is a very real worry for every Canadian today.

Now that the majority of us have remained in quarantine, we’ve had a lot of time to look at our money behaviours. Have they transformed since we’ve been able to take a look at our cash? Are we most likely to be taking a look at it differently now moving forward? I say yes. I don’t assume any person is going to exit this COVID-19 pandemic unscathed financially.

I have been blogging for years about the need for every Canadian to have in their monthly budget a line item for putting savings into an emergency fund in case of an unforeseen crunch. Before the lockdown, many Canadians were in trouble already. In the 3rd quarter of 2019, we saw household debt to income numbers at around 176%. So that statistic means that for every single dollar we brought in, we owed $1.76. Typically, for an emergency reserve, you should have 3 to 6 months of liquid funds readily available to you. Most Canadians did not.

An emergency fund doesn’t have to be in a very low interest-bearing savings account that you can go to an ATM for. Certainly, it also didn’t need to be cash stuffed in your mattress in the house. It could have been in the form of financial investments that could be liquidated fairly quickly without suffering a loss, should an emergency arise and you needed to get your hands on some money quickly.

By an emergency situation I mean something like a major medical expense, being laid off of work or something like this coronavirus pandemic causing you a loss of earnings such as now being experienced by lots of people as our economy shut down.

The government had no choice for to debt do us part

As a result of so many people being so scared and facing to debt do us part in the face, the federal government had no choice but to come up with a support package for Canadians and Canadian companies. The combination of support programs is wrapped up in the omnibus title of the COVID-19 economic response plan. I have written before on many of the support programs. The federal assistance programs for Canadian business include:

When government support ends to debt do us part

The Canadian federal government had no choice but to provide an aid bundle for Canadians. This point highlights the truth that maybe most Canadians were not prepared with an emergency fund. To debt do us part was part of their everyday life. Unlike the two people in the articles I mentioned in the introduction to this Brandon’s Blog, I think this has been a big wake up call for a lot of people about their to debt do us part.

This is not the moment to be talking to your lender for new credit when you have too much debt. However, it is a perfect time to start thinking about your monthly after-tax income and your monthly spending. You want to get that under control so that you are not spending more than you earn and that your monthly budget has a line for your emergency fund savings. You need to first get on the solid monetary ground while the government’s support programs are still in force.

But what happens to debt do us part when the support programs and the various deferral programs offered by the banks end? In several previous blogs, I hypothesized that the Canadian government cannot end the programs on the original end dates of September 1, 2020. My feeling was that Canadian people and companies would not be ready to go from support to no support so drastically and would have to extend the programs potentially until the end of the 2020 calendar year. Some of these blogs were:

Since then, the federal government has announced several extensions to certain programs:

  • Canada Revenue Agency (CRA) is expanding the payment due day for existing year personal, company, and trust tax returns, including instalment payments, from September 1, 2020, to September 30, 2020.
  • The federal government will give eight added weeks of benefits for people whose jobs or income have actually disappeared as a result of the COVID-19 pandemic, however, only if they look for a job and take one when it’s reasonable to do so.
  • A CEWS extension that will prolong the program up until November 21, 2020, with the intent to supply additional support up until December 19, 2020.

So with these extensions providing extra support, now is the time for everyone to try to get their financial house in order.

How do people avoid to debt do us part in the first place?

I was asked recently in a Facebook business group I belong to:

How do people better put themselves in better financial health in the first place?

My answer was:

That is a great question. It all has to start with understanding clearly your monthly after-tax income, monthly expenses and having a budget that you follow. Each month the budget must include putting something away to an emergency fund and making sure that your income tax is being paid regularly. So that what you are spending is truly after-tax money. All of that can be summed up as living within your means. That goes for your business too.

So while there are still government support programs, now is the time to take a hard critical look at your financial situation and make concrete plans to try to avoid the realities of to debt do us part.

People were already teetering on solid ground. It’s most likely to underscore the value of actually meeting with an expert if you do not know how you get out of this debt on your own. Sitting down with someone like a qualified financial advisor, a community-based credit counsellor or a licensed insolvency trustee is what you need to do.

If the debt is howling at you, you need to really have a strategy to get out of it. When you intend to drop weight, you seek a weight reduction program to educate you. You may additionally choose a personal trainer to help you with an exercise program. So, why not locate somebody to assist you and educate you to shed your debt as well as keep it in control?

You do not need to do that all on your own. It’s going to take some imagination, maybe some cost-cutting, maybe some increased revenue or a combination of all of these. We’re not out of this yet, and eventually, the deferrals and support programs will end. Take action now so that you can have a clear path going forward. Nobody says it will be easy, but to debt do us part does not have to be part of your life forever.

Payday loans and credit card advances are not the answer to debt do us part

Something individuals in the red can refrain from doing is trying to go deeper into debt by raising money on a brand-new debt to repay an old one. When you already have too much debt, the only likely source for this kind of cash that I see is either cash advance on an existing charge card or a payday loan. Regardless, you will be paying a lot more interest than on the original financial obligation you are attempting to refinance.

Payday loans are extremely easy to get. You can go shopping online. You can have cash in your account within a couple of hours. The issue is, depending on the province that you’re in, these are astronomical interest rates as high as 600 percent. It might fix that short-term issue, but what you’re mosting likely to have to handle in the future normally winds up being more payday advances rolling right into a really negative situation. Very same with the cash advance from your credit card. Not as bad as payday loans, however still 20% to 29% rate of interest doing that.

The courts are shut now. Financial institutions are not chasing anybody. People are still obtaining those deferrals. You are not having to pay tax obligations. You can defer paying your tax obligations until the end of September.

So as quickly as we get back to a “new normal”, creditors will certainly begin to call. You will certainly have to pay your mortgage, your taxes and your various other costs. Will that be something people will have the ability to afford? While we still have this “break”, it is actually the very best time to look at your overall picture, your revenue and also expenditures, your month-to-month spending plan. It is additionally the best time to get the expert help you need if you can not do it on your own. This is the ideal time to map out a strong strategy.

To debt do us part summary

I hope you have found this to debt do us part Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

to debt do us part
to debt do us part

 

Categories
Brandon Blog Post

THE BEST CEWS EXTENSION NEWS REVIEWED

cews extension
cews extension

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this Brandon’s Blog, please scroll to the bottom of the page and click on the podcast.

CEWS extension introduction

On Friday, July 17, 2020, the federal government made an announcement regarding the Canada Emergency Wage Subsidy (CEWS). The CEWS extension deals with both extending the date the program continues to and also amends some of its provisions.

This Brandon’s Blog discusses the proposed changes announced by Finance Minister Bill Morneau. I caution that this is merely an announcement about the Liberal government’s intention to make a legislation change. Right now there is no new legislation on the books so the final CEWS extension may look different than what was announced.

CEWS status prior to the July 17 announcement

The CEWS was put in place for an initial 12-week duration from March 15 to June 6, 2020, giving a 75-per-cent wage aid to eligible companies. In my May 20, 2020 blog, CANADA EMERGENCY WAGE SUBSIDY: HELPING YOUR COVID-19 BUSINESS RECOVERY, I wrote about Prime Minister Justin Trudeau introducing on May 15, 2020, amendments to the program to aid businesses to prepare for reopening. These companies needed to be able to rehire workers laid off when the state of an emergency closure was proclaimed.

Justin Trudeau’s May announcement was of a CEWS extension for 3 extra months to August 29. The CEWS covers 75% of a staff member’s wage or salary – as much as $847 per week – for qualified employers. For those able to in addition gain from the Temporary 10% Wage Subsidy for a period, any kind of credit taken under that program will decrease the total to be declared under the CEWS for that precise same period.

Another CEWS extension was inevitable

CEWS is just one of many support programs under the federal government’s COVID-19 Economic Response Plan. In my July 8, 2020 blog, CANADIAN BUSINESS: WHAT WILL BE THE ULTIMATE BUSINESS IN ONTARIO RECOVERY PROGRAM?, I talked about not only the inevitability of a CEWS extension but of extensions for the other government support programs. It is not that I am some insightful visionary, it is just as simple as the coronavirus is not going away. Similarly, the financial pain being experienced by entrepreneurs and their companies and by ordinary people is also not going away.

Everyone will certainly need to stand on their own 2 feet just like they needed to prior to the COVID-19 pandemic. Until the CEWS extension news last Friday, the Canadian company assistance programs were all set up to end August 31. I asked the question “What will take place then?”.

My personal idea was that the government will certainly not be able to finish the financial assistance programs that soon. Instead, I wrote they will certainly have to prolong all the programs once more. They may modify them to start the process of weaning Canadians off of COVID-19 Economic Response Plan assistance. However, they would certainly need to be extended.

I wrote that the government would not intend to extend for more than 90 days, however, Xmas would come shortly after the expiry of a 90-day extension, pandemic or no pandemic. The only part that I got wrong was that the government would not want to shut down the faucet prior to Christmas. So, I wrote that it suggested an extension until January 1, 2021. I also don’t see one thing in the CEWS extension that I predicted. That the government will accompany the new extension with an alert to every Canadian to get their affairs in order since there will certainly be no more assistance programs after December 31.

As I will explain below, I did not see such a warning in last Friday’s announcement.

The CEWS extension

The CEWS safeguards jobs by helping organizations maintain workers on the payroll and also motivating companies to re-hire employees formerly laid off. The Canadian government says that since the CEWS was launched, 3 million Canadian workers have actually had their work sustained, and that number continues to expand.

Finance Minister Bill Morneau revealed last Friday that the CEWS extension would include program changes that would widen the reach of the program. It would also offer much better-targeted assistance to ensure that more workers can return to their jobs promptly as the economy reboots.

The proposed modifications included in the Federal government’s draft proposed legislation for the CEWS extension would:

  • The CEWS extension will prolong the program until November 21, 2020, with the intent to supply additional support until December 19, 2020.
  • Make the subsidy obtainable to a more comprehensive range of companies by consisting of employers with a revenue decrease of less than 30 percent and also offering a slowly lowering base aid to all eligible employers. This would help numerous employers with less than a 30% revenue loss obtain assistance to keep employees.
  • Introduce a top-up subsidy of approximately an extra 25 percent for employers that have actually been most adversely affected by the pandemic. This would be especially practical to companies in industries that are recovering much more slowly.
  • Offer certainty to companies that have actually already made company decisions for July and August by ensuring they would not have their subsidy lower than they would have had under the previous policies.
  • Address specific concerns recognized by stakeholders.

These recommended adjustments come from consultations with labour and business representatives on making certain that the CEWS extension remains to save jobs and help with economic growth.

By helping employees shift back to their jobs and sustaining companies as they boost revenue, these adjustments go to give support to companies to have some certainty that they need to bring back workers.

There are other government subsidy programs too

The federal government continues to evaluate as well as react to the impact of COVID-19 and stands ready to take extra actions as required to maintain the economy. So, perhaps we will see announcements soon, just like the CEWS extension announcement, to extend:

Only time will tell. I will certainly keep you updated as more announcements are made.

“We are ensuring that Canadians are able to get back to work as quickly as possible. The adjustments we are proposing would ensure that the CEWS continues to address Canadians’ needs while also positioning them for growth as economies continue to gradually and safely reopen.” – Bill Morneau, Minister of Finance

CEWS extension summary

I hope you have found this CEWS extension Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Categories
Brandon Blog Post

CANADIAN BUSINESS: WHAT WILL BE THE ULTIMATE BUSINESS IN ONTARIO RECOVERY PROGRAM?

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Canadian business introduction

In April 2020, a survey of entrepreneurs who own what could be called a small Canadian business across the GTA was conducted. It found that almost two-thirds of them might have to shut down for good as they struggle to stay on top of rent and other bills throughout the COVID-19 pandemic.

In this Brandon’s Blog, I look at entrepreneurs in Canadian business, both small and large, and talk about the one essential ingredient that will determine Canadian business success or failure. This one necessary item may turn out to be the only Canadian business recovery program that will ultimately work.

Canadian business opening-up again

Many are progressively opening up under local, provincial and federal government guidance. They need to navigate a host of constraints, including restrictions on the number of customers at any one time. I have read that many say the restrictions with their added layer of costs may stop them from being profitable. Even though COVID-19 cases appear to be under control in Ontario, companies have actually reopened to dramatically smaller sized groups, imperilling their survival.

To save local Canadian businesses, and the millions they employ, the federal government developed Canada’s COVID-19 Economic Response Plan. The federal assistance programs for Canadian business include:

I have already written about most of these support programs. I have attached relevant links above so that you can read up on the various support programs for Canadian business.

Provincial governments have also stepped up. For example, in Ontario, the Doug Ford Conservative government has implemented:

  1. Interest/penalty relief – Canadian business in Ontario will get five months of interest and fine relief to make payments for taxes administered by the Province. From April 1, 2020 – August 31, 2020, Ontario will not apply any penalty interest on any late-filed returns or incomplete or late tax obligation payments under the Employer Health Tax, Tobacco Tax and Gas Tax obligations. This enhances relief from the federal government on interest and other charges from not remitting the amount owing for corporate income tax.
  2. WSIB payment deferments – Employers can delay WSIB payments for 6 months.
  3. Rent support for local Canadian business – Ontario has partnered with the Government of Canada on the Ontario-Canada emergency commercial rent assistance for small businesses and landlords experiencing financial problems throughout the COVID-19 pandemic.

But there are still Canadian business problems

Despite all these support programs, the Canadian business world still has to figure out how to pay the balance of their rent, utility, insurance as well as a host of various other recurring expenses. While some have had the ability to delay these expenses, they can’t do so for life. Companies will become required to take care of their unmet commitments. They will also have to figure out how they are going to go back to paying all their expenses in full once the support programs end and business has not yet come back to the pre-coronavirus pandemic level.

Some companies may have enough cash savings to ride out the pandemic or can access fresh cash resources from owners. That is both good and bad. Entrepreneurs will take from their retirement savings, and in some cases deplete them, in the hopes of keeping their business alive long enough to survive and once again be profitable. It is highly doubtful that Canadian business will be able to borrow from the Banks as a source of fresh capital under these circumstances.

For a lot of others, the crush of past-due costs will certainly limit and maybe even end their business.

What happens when the government support programs end?

That is a big question that I get asked always. The answer is somewhat obvious: Everyone will have to stand on their own two feet just like they had to before the COVID-19 pandemic. Right now all the Canadian business support programs are all scheduled to end August 31. What will happen then?

My personal belief is that the federal and provincial governments will not be able to end the economic response support programs that soon. Rather, I think they will have to extend all the programs again. They may tweak them to begin the process of weaning Canadian business off of government support. Nevertheless, I feel they will have to be extended.

I think the extension will come with stark warnings. I believe the government would not want to extend for more than 90 days, but Christmas will still come in December. Pandemic or no pandemic. Nobody will want to shut off the tap before Christmas. So, that means an extension until the end of the calendar year 2020. With it, the governments will have to warn everyone to get their houses in order now because for certain there will be no more support programs after December 31.

I don’t have any inside information. I am just guessing. But to me, that seems the most realistic to still help Canadian business because entrepreneurs and workers are still all scared. At the same time, the governments’ exit strategy time clock begins ticking. Everyone will have a fair warning.

There is one precious commodity Canadian business will need when the support programs stop

Please humour me. Let us just say you find my prediction to be a reasonable one. On January 1, 2021, Canadian business is not all of a sudden flush with cash. They have survived. Entrepreneurs will still be scared. They certainly will not hire everyone back with an uncertain economic climate. All of the creditors of the businesses will start demanding payment in full. They have been patient and understanding. But now, all business debts will be demanded.

What is the one commodity Canadian business will desperately need? Cash is an obvious one but, no more is coming. Not from the government, the Banks or investors. Entrepreneurs are already tapped out having used personal savings to keep their businesses afloat. The most precious commodity Canadian business will need is TIME. Time to gear up again. Time to get back on their feet and bring in some cash. The Courts will have reopened. Creditors will begin to sue. There will be no more “time-outs” built into our Canadian economic system.

How will businesses get the time they need?

Bankruptcy protection will very likely be the answer

Breathing time that briefly ices up the need to pay off old debt while letting Canadian business function and have the time to find a strategy to keep going. In most cases, that will only be able to happen with a bankruptcy protection insolvency filing.

While bankruptcy is only thought of with going out of business, there are two Canadian federal statutes that allow viable businesses to develop a restructuring plan to lead them back to success. The trouble is that bankruptcy laws don’t give sufficient time to do this while there is still a pandemic. Ongoing COVID-19 health problems will likely suppress the Canadian economy in 2021.

Some out-of-the-box thinking and creativity are going to have to go into bankruptcy restructuring. It will be incumbent on licensed insolvency trustees (formerly called bankruptcy trustees), insolvency lawyers and the courts to recognize viable businesses that deserve to survive. This will be the case even if the processes being recommended are a bit unorthodox. These times are unorthodox and the solutions will have to fit the realities of our time.

I have previously written many blogs on how the two Canadian insolvency statutes can be used to allow Canadian business to restructure. The two statutes are:

For the purpose of this blog, I won’t repeat what I have previously written about corporate restructuring under either the BIA or CCAA. For this blog, what you need to know is that CCAA proceedings are for companies with $5 million or more of debt. BIA proceedings are for those companies with $4,999,999 of debt or less. Both statutes allow for bankruptcy protection filing. They are the Canadian equivalent to Chapter 11 bankruptcy protection in the United States.

How will bankruptcy protections help Canadian business?

For numerous companies battling the consequences of COVID-19, the main issue will not be a massive backlog of debt. It will be the inability to pay off the debt fast due to an absence of immediate profits. Cash will be needed to carry on business and make commitments on a go-forward basis. Given enough time, Canadian business will be able to repay its debts which accrued during the coronavirus shutdown. Unfortunately, the time Canadian business will need will be much longer than how much longer creditors will be willing to wait.

This is where bankruptcy protection filing, under either the BIA or CCAA comes in. First, under a bankruptcy protection filing, there is an automatic stay of proceedings. Creditors will not be able to start or continue collection efforts. This includes repossession by secured creditors or beginning or continuing legal proceedings.

Other benefits of a bankruptcy protection filing for Canadian business will be:

  1. Buying some time to come up with a restructuring plan to keep viable businesses in operation.
  2. Saving jobs through restructuring rather than liquidating the assets of many companies.
  3. Allowing for the sale of entire business units to be integrated into other healthier companies in order for businesses to survive, albeit in a different legal format.
  4. To allow for the sale of redundant assets to raise much-needed cash.
  5. Get out of onerous equipment, IP or premises leases/contracts that need to be jettisoned or else a restructuring is not possible.
  6. Stopping secured lenders from calling a default on loan facilities due to either cash or non-cash impairment charges leading to going concern worries.
  7. Obtain operating capital by way of a new debtor-in-possession loan credit facility for restructuring. Most companies outside of a formal restructuring will be unable to borrow any more money as I have already mentioned. However, in a BIA or CCAA Canadian business restructuring, the court can approve emergency funding and raise that operating loan to the top of the pile by giving it a priority secured loan position.
  8. Stopping Canada Revenue Agency (CRA) from starting or continuing garnishee tactics, general collection efforts and especially placing liens on business property for unpaid taxes.
  9. To allow companies to restructure their debt and clean up their balance sheets in a post lockdown economy.

The biggest resource Canadian business will need is also going to be its largest enemy

So as you can see, I believe that the most important resource that Canadian business will need to survive will not be cash. It will be time. Creditors will no longer want to give businesses more time to repay. Companies will need more time to get back on their feet when the COVID-19 Economic Response Plan support programs end.

The only way I can see that truly happening while allowing for proper restructuring of viable businesses will be under bankruptcy protection filings. Those businesses that are not viable, by definition, will fall by the wayside causing more harm to many good people.

So this why I say formal bankruptcy protection proceedings to allow viable businesses to restructure will be the ultimate business recovery program in a post-lockdown Canada.

Canadian business summary

I hope you have found this Canadian business Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

canadian business
canadian business
Categories
Brandon Blog Post

CANADA IN RECESSION: WILL THE ECONOMY FALL INTO A GREAT DEPRESSION?

canada in recession
canada in recession

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this Canada in recession Brandon’s Blog, please scroll down to the bottom and click on the podcast.

Canada in recession introduction

It’s official. C.D. Howe Institute has declared that Canada in recession because COVID-19 is now a reality. Canada’s economy is in a recession. Nouriel Roubini is a world-known economist and a professor of economics at New York University’s Stern School of Business. He accurately forecasted the credit crisis of 2007-2008. He has some stark current thoughts on just how bad the Canadian economy can go. He has written and talked at length lately about the components that could take Canada in recession to a depression.

Canada in recession – When will there be a recovery?

Dr. Roubini sees three possible scenarios for how things are going to develop in the global economy. He says:

  1. His baseline assumption for North America this year is one of a U-shape recovery.
  2. The equity markets in the US are pricing in a V-shaped recovery with very strong growth in the second half of the year into next year.
  3. There is a risk of a greater depression for the rest of the decade but not for this year.

He believes there are forces that are going to lead Canada into a depression. His view is that there is going to be a U-shape recovery because this is a global shock. Both households and corporations will have to spend less and save more. Precautionary savings are going to go higher. Income is going to be lower. This will translate into less business capital spending. He says there will be a global investment slump because of a global savings glut.

That is a recipe for a very anemic recovery.

Could external forces push the US and Canada in recession into a depression?

The question is how long and how deeply related to this crisis the recession will be? Although in the short term there is Canada in recession, later in the decade is when there will be a price to be paid. That potential for depression and deep slump happens later in the decade as a result of fear and panic leading people and companies to save more and spend less.

So, what can governments do to stave off a worse depression? Dr. Roubini is very pessimistic and believes a greater depression will happen sometime later in the decade. He believes it is only a matter of when and not whether it will happen.

He describes the North American economy as a train wreck in slow-motion. It won’t happen this year but there are fundamental forces like debt and deficits leading people and businesses to insolvency. There will be an inability to fund liabilities coming from demographics that become worse. There will be deflation that is going to make more people insolvent. The need for quantitative easing will debase currencies. The need will be because of the large fiscal deficits that eventually are going to lead to inflation by the middle of the decade.

There is also digital disruption because manufacturers will have to substitute labour with the capital in equipment and technology because businesses will have to cut costs to save more and spend less. That implies more automation and more robotics; especially if we are going to try to lessen our dependence on China for goods.

We are in the process of a democracy backlash. People who are scared are becoming more populist and will try to elect authoritarian populist governments to come to power all over the world. Relations with China will probably become colder because of the coronavirus related anger towards China. It is going to get very ugly.

There will be digital rivalries including cyber warfare. It will get worse over the next few years. This is the way warfare is going to be. It will not be the conventional words the enemies of the Western Hemisphere be it China, Russia, Iran or North Korea. They cannot fight the USA using conventional weapons.

Events in the 2016 US election and the COVID-19 pandemic in 2020 shows our enemies that they can use cyber and biological war to successfully weaken the North American economy and create societal problems. They will continue to interfere with the US democratic process and use man-made disasters. Pandemics and global climate change are two things they can weaponize to try to destabilize our way of life.

This has the potential to make us wind up into a great depression. Government fiscal policy cannot do much about it. That is not the tool we need to fight these new threats.

What about internal forces pushing the US and Canada in recession into a depression?

One huge issue is the debt level; both personal debt and sovereign. We are in way over our heads. We were before this crisis. In terms of how we get out of it is there a natural path that would resolve it? It doesn’t seem clear right now because governments are having to spend trillions of dollars to keep their economies afloat during the coronavirus pandemic. What has kept things in check prior to the pandemic is that interest rates were close to zero, if not negative, like in Europe and Japan. The current economic environment is going to make it impossible for governments to change the historically low-interest rates for the foreseeable future.

I have written many times before discussing different issues relating to record high Canadian household debt levels. The debt levels are the single most internal reason why Canada in recession could become Canada in depression.

Canada in recession summary

I don’t mean to be pessimistic when talking about Canada in recession. However, today, I just don’t see any silver lining. I am sure there is one, I just can’t see it right now.

I hope you have found Canada in recession Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

 

Categories
Brandon Blog Post

CMHC INSURANCE: ENGAGING NEW RULES FOR COVID-19 MORTGAGE APPROVAL

chmc insurance
chmc insurance

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

The Ira Smith Trustee Team wishes all of our Canadian readers a healthy, happy and safe Canada Day.

cmhc insurance
cmhc insurance

If you would prefer to listen to the audio version of this Brandon’s Blog, please scroll to the bottom and click on the podcast.

CMHC Insurance introduction

CMHC insurance is helping to stabilize Canada’s economic system as well as sustain the financial health of families during the COVID-19 pandemic. Effective July 1, 2020, CMHC insurance rules are changing. It will affect the cost of real estate in Canada. It is also designed to minimize risks to CMHC and therefore the Canadian economy.

I describe what those changes are and why they are being made in this Brandon’s Blog.

What is CMHC Insurance?

In simple terms, CMHC insurance is insurance provided to mortgage lenders to protect them in case of mortgage defaults. If the lender needs to sell the home and suffers a loss, CMHC insurance pays off the lender to cover that loss.

CMHC insurance allows lenders to continue making mortgage loans at reasonable interest rates to those people who would not otherwise qualify. At the present time, the down payment required to get CMHC insurance is only 5 percent of the purchase price. One of the changes that I describe below, is that it will rise to 10 percent.

How Much Is CMHC Insurance

Like any other insurance product, there are CMHC insurance premiums. The mortgage lender pays the insurance costs. It is determined by taking into account the size of your mortgage and the amount of your down payment. The lending institution passes this cost on to the borrower. It can be paid as a lump sum or included in the mortgage which obviously affects the mortgage payments.

Here is a link to the CMHC insurance page where you can use the CMHC insurance premium calculator. This will allow you to calculate your potential mortgage insurance premium rates.

CMHC And The COVID-19 Pandemic Response

Early on, in coordinated action with the Bank of Canada and with Finance, CMHC relaunched a program to make certain that financial institutions have access to term financing. The reason is so mortgage lenders can have the necessary liquidity to continue to offer mortgage financing. This ensures that the mortgage market and therefore the real estate markets remain functional.

Under the program, the Canadian government can buy up to $150 billion of insured home mortgages. They are also prepared to increase the issuance of traditional securitization programs, as needed.

On top of that, CMHC acted quickly to assist Canadians who are having difficulty paying their home mortgage as a result of the coronavirus pandemic. Acting with Genworth Financial Canada and Canada Guaranty, CMHC is using short-term deferral of mortgage payments for up to 6 months to help Canadian homeowners. CMHC believes that about 12 percent of homeowners have elected to postpone repayments until now. This number may in fact grow depending on what happens with job recalls and government support programs this Fall.

The same mortgage deferral is offered to multi-unit real estate owners in order to accommodate the loss of rental income. As well CMHC has taken actions to guarantee that charitable, as well as co-operative housing service providers, remain able to get government rent subsidies. CMHC is urging recipients of federal assistance to refrain from evictions during the COVID-19 pandemic.

Almost everything CMHC insurance has done in response to the COVID-19 situation talks about allowing Canadians to borrow. The federal government is taking on more financial debt to fund COVID-19 support programs. Mortgage deferments are adding to already historically high household debt.

CMHC Insurance guidelines

Canadians are amongst the global leaders in household financial debt. Pre-COVID-19, the proportion of gross financial debt to GDP for Canada went to 99 percent. This is due to not only more borrowing, but also declining GDP. CMHC estimates that it could go to over 115 percent in Q2 2020 and get to 130 percent in Q3, before decreasing. At those levels, GDP growth is choked off.

CMHC is now forecasting a decline in average real estate prices between 9 to 18 percent in the coming 12 months. The resulting mix of greater mortgage debt, declining home prices as well as increased unemployment is the reason CMHC takes issue for Canada’s longer-term financial security.

CMHC is trying to figure out how to handle expanding mortgage debt “deferral high cliff” that looms in the autumn when some jobless people will need to start paying their home mortgages once more. As long as one-fifth of all home mortgages could be delinquent if Canada’s economic situation has not adequately recuperated.

CMHC insurance feels a responsibility to prevent enhanced losses that arise from dropping real estate prices. CMHC believes that if it does not act, a first-time buyer looking to buy a $600,000 house with a 5 percent down payment stands to lose over $90,000 of value on their $30,000 financial investment if rates fall by 10 percent. In contrast, a 10 percent down payment provides more of a cushion.

CMHC insurance will be expected to cover losses if properties need to be sold. For these reasons, CMHC is evaluating whether it needs to alter its underwriting because of its assessment of future market conditions.

CMHC Insurance rules are changing

CMHC says that its support for homeownership cannot be endless. Canadians believe that owning a home is crucial for retirement savings. Over the past 20 years, the typical Canadian homeowner has had a tax-free gain of $340,000 from their house. CMHC believes that house prices and the resulting mortgage debt levels are significantly unreachable for first-time buyers.

Effective July 1, 2020, CMHC insurance is changing its insurance underwriting for all new applications. The changes are:

  • limiting the Gross/Total Debt Servicing (GDS/TDS) proportions. The test will allow for 35% of gross income to be spent on housing. It will also only allow total borrowing costs to be 42% of gross income.
  • requiring a credit rating a minimum of 680 for at least one borrower; and
  • non-traditional sources for a down payment that is from borrowed funds will no longer be counted as equity for insurance purposes.

CMHC has also taken another action to further handle the risk to the CMHC insurance business, as well as inevitably Canadian taxpayers. During this uncertain time, CMHC has put on hold mortgage insurance coverage for refinancing, unless the funds are used for repair work or reinvestment in the real estate. While making this decision on multi-unit properties requiring CMCH insurance, they have not yet figured out what is going to happen when these mortgages cannot be renewed without CMHC insurance.

CMHC insurance says that COVID-19 has subjected enduring vulnerabilities in Canadian financial markets. It believes that its actions will safeguard home purchasers, minimize government and taxpayer risk as well as sustain the stability of real estate markets.

These new requirements will certainly curtail demand amongst the general Canadian population. The new CMHC insurance rules will also lower the number of people qualifying. One thing CMHC barely mentions, other than for language about saving Canadian taxpayers from losses, is that it will slow down the growth in the portfolio of CMHC insurance provided mortgages. This is what it really is all about.

CMHC Insurance rules summary

I hope you have found the CMHC insurance Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

The Ira Smith Trustee Team wishes all of our Canadian readers a healthy, happy and safe Canada Day.

cmhc insurance
cmhc insurance
Categories
Brandon Blog Post

INSOLVENCIES IN CANADA: THE CALM BEFORE THE SCARY STORM?

The Ira Smith Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Insolvencies in Canada introduction

Insolvencies in Canada are at a record low. Is it the calm before the scary storm?

Consumer insolvencies in Canada have been driven to unusually reduced degrees in recent years because of sustained low-interest rates and strong property values.

In this Brandon’s Blog, I discuss what could very well happen in the 4th quarter of 2020 and into 2021.

Insolvencies in Canada – recent history

The lower number of insolvency filings is not a new phenomenon. Insolvencies in Canada have been at historically low levels for many years. It was not until last year that personal insolvency filings increased year over year.

In 2019, consumer insolvencies for the 12-month period finishing December 31, 2019, increased by 9.5% compared to the 12-months ending December 31, 2018. Personal bankruptcy decreased by 1.2%, while consumer proposals were 17.9% higher.

After many successive years of steady decline, business bankruptcies in Canada had reached a plateau level in 2019. Typically speaking, business bankruptcies in Canada have been stable.

During the 1st quarter of 2020, the Office of the Superintendent of Bankruptcy Canada (OSB) reports that between the 4th quarter of 2019 and the end of the 1st quarter of 2020, for insolvencies in Canada:

  • Total insolvency filings decreased by 5.4%.
  • Consumer filings were down by 5.5%.
  • Business insolvency filings were 2.6% lower.
  • In all cases, bankruptcy filings were drastically lower and restructuring proposals were essentially flat.
  • For personal filings, Alberta was basically flat while the other provinces and territory showed decreases.
  • In business filings, Ontario showed a slight increase (8.3%) and British Columbia showed a huge increase (43.5%). Again, it was restructuring proposals, not bankruptcy, making up the majority of business filings. All other provinces and territories showed a decrease.

Then the effects of the economic shutdown of the country started taking hold in April 2020.

April 2020 insolvencies in Canada and the United States

The total variety of insolvencies in Canada (both bankruptcy and proposal filings) decreased by 38.7% in April 2020 contrasted to March 2020. Personal bankruptcy decreased by 41.5% and proposals decreased by 37.2%.

The number of insolvencies filed in April 2020 was 43.5% less than the total in April 2019. Consumer bankruptcies decreased by 43.1%, while consumer proposals decreased by 54.8%.

The story in the United States is very similar. American Banker reports that presently in the US, personal bankruptcy filings are actually reduced year over year. It reports that according to information from the federal courts, there were 186,000 consumer bankruptcy cases in the first quarter of 2019. By comparison, there were 175,000 for the initial quarter of 2020.

A lot more noticeably, the rate of consumer insolvency cases for April of 2020 was 46% lower than in April of 2019.

There are a variety of reasons in both countries. From my discussions with a couple of US bankruptcy lawyers, I am friendly with, it seems the reasons in both countries are generally the same.

In no particular order, the main reasons are:

  • Mortgage payment deferral programs masking what might otherwise be increased delinquencies.
  • Lower overall credit card spending while people are at home in self-quarantine.
  • Various government programs supplying much-needed cash to unemployed people and businesses.
  • Government programs deferring the timing for filing income tax returns and the payment of income tax.
  • Moral suasion so far stopping banks, credit card companies and collection agencies from aggressively making collection attempts during this time.
  • The closure of the courts making it impossible to sue anyone.

    insolvencies in canada
    insolvencies in canada

The economy is starting to reopen

In conjunction with the federal government, the provinces and territories are starting to reopen cities and businesses. No doubt there will be a lot of growing pains as the economy reopens. What should we expect? What will it mean for insolvencies in Canada?

In his first speech as Governor of the Bank of Canada, on June 22, 2020, Tiff Macklem stated that he expects there will be an initial boost to the Canadian economy as it reopens and activity resumes. He does not expect that good news to last very long. Rather, he expects there will be the 2nd stage of economic recovery that will certainly be long and slow, due to the remaining unpredictability around the coronavirus.

The federal government will need to wean Canadians off of the various support programs. When that happens, all the financial pain currently hiding under the radar will rise to the forefront. COVID-19 support programs, payment deferrals and other “time outs” will end and the courts will reopen. Creditors will get back to business as usual in chasing delinquent accounts. The federal, provincial and territorial governments will feel they have done enough to the tune of trillions of dollars. Their attitude will be, in so many words, it is now time for you to stand on your own two feet again.

In fact, some government attitudes are already changing.

Will temporary layoffs be a harbinger for business insolvencies in Canada?

Throughout the coronavirus pandemic, BC seemed to handle their lockdown and other COVID-19 things a bit differently than the other provinces and territories. As they now consider reopening, BC businesses are worried.

British Columbia businesses are discouraged by Labour Minister Harry Bains’s failure to recognize the seriousness of problems facing the mainly small and medium-sized businesses. Their issue is the possibility for thousands of companies to have to make an insolvency filing. Their main worry is that they will be compelled to make severance payments as a result of the unexpected scenarios brought by the COVID-19 pandemic.

The Minister has it within his power to supply a Ministerial Order to expand the temporary layoff time frame under the Employment Standards Act to provide companies with the breathing room” required to survive, recoup, and facilitate return-to-work for laid-off staff.

All provinces and territories face extraordinary difficulties as a result of the economic results from COVID-19. Few business owners can plan for or have the cash-on-hand to terminate all or a considerable part of their labour force at the same time throughout the very best of times.

BC companies will be faced with fears as the clock ticks to target dates beginning in very early July requiring several companies to either recall or permanently terminate laid-off staff members. They don’t have enough business or money to rehire everyone. They also don’t have the cash to make the severance payments. Without legislative support, this problem will face all Canadian businesses.

In the nick of time, the federal government has come to the rescue. On June 23, 2020, Prime Minister Justin Trudeau announced that the federal government has expanded the period for temporary layoffs by as much as 6 months. Employers now have more time to recall staff members who were laid off due to COVID-19.

Now, for employees who were laid off before March 31, the government has proposed that their employers have the earlier of 6 months or up until December 30 to recall their staff. For employees laid off between March 31 and September 30, their company will have up until December 30, unless a later recall day was given on their layoff notification.

I caution that this is a proposal floated by our PM right now and not actual legislation. Labour legislation is largely left up to the provinces and territories. It is interesting to note that the Feds seem to be stepping into this. As we all know, ultimately, businesses will either be able to survive or will have to restructure under our laws for insolvencies in Canada.

Will extending employee recalls be a harbinger for personal insolvencies in Canada?

So now that employees can expect to remain unemployed for longer, what is that going to mean? For several years now polls have shown that Canadians are on the brink of insolvency. As I already mentioned, rock-bottom interest rates and rising real estate values, leading to lots of home equity lines of credit room to borrow on. This has kept Canadians in debt and out of becoming one of the statistics for insolvencies in Canada.

So the question is, once the Canada Employment Response Benefit (CERB) runs out, what will the unemployed do? Seems to me there are a few options, none of them good:

  1. Cut back on spending as much as possible. In places like the Greater Toronto Area (GTA), you have to be a magician to be able to live on $2,000 per month (after putting away the amount you will have to pay eventually in CERB income tax).
  2. Burn through the rest of your savings until you have no cash.
  3. As a result of 1 or 2, go deeper into debt on your lines of credit and credit cards until you have no more borrowing room.

Once all of this has happened, the only thing left to do will be to consult with a licensed insolvency trustee (formerly called a bankruptcy trustee) to discuss your realistic options for eliminating debt.

Insolvencies in Canada summary

I hope you have found the insolvencies in Canada Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

insolvencies in canada
insolvencies in canada
Categories
Brandon Blog Post

THE GREAT UNTOLD STORY ON MY CRA ACCOUNT BUSINESS UPDATED RULES THAT YOU MUST READ

my cra account business

The Ira Smith Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Stay healthy, well balanced and safe and secure everyone.

If you would prefer to listen to the audio version of this My CRA Account Business Brandon’s Blog, please scroll to the bottom and click play on the podcast.

My CRA account business introduction

On May 28, 2020, Canada Revenue Agency (CRA) made an announcement concerning the CRA and COVID-19 collections, audit, objections and appeals procedures. It looks like they are starting to slowly open up again. So, it appears that the time-out honeymoon for my CRA account business for business and personal income tax matters is over and there will now be new rules.

In this Brandon’s Blog, I will describe them for you.

Collection on brand-new financial debts

Collections activities on brand-new debts will be put on hold up until additional notification, and also versatile settlement arrangements will be readily available. If you cannot pay your taxes, child and family benefit overpayments, Canada student loans, or other federal government program overpayments completely, payment arrangements are offered.

Collection officers will certainly attend to pre-existing cases individually. CRA says it will do so in a way to prevent financial difficulty. I think the fact that either you or your company owes CRA money that you cannot pay, that in itself spells financial difficulty!

My CRA account business audits returning

The CRA is returning to a complete function of their audit group. They say that they are adjusting their methods given the health as well as economic impacts of COVID-19. They will be focusing as a priority on:

  • higher dollar audits first;
  • audits close to the conclusion;
  • those with a calculated significance to the Government of Canada, provinces and other taxation stakeholders;
  • initiatives to combat scams and other criminal activity; and
  • CRA will for now continue to recognize electronic signatures as having met the signature requirements of the Income Tax Act, as a temporary administrative measure.

The CRA statement said that they are developing new methods of interacting with taxpayers. CRA will function with taxpayers and my CRA account business to establish steps and methods to adapt to the present truth. For instance, one new way is that they are now going to supply taxpayers with the alternative to send requested details via electronic mail.

Some vital adjustments will be given using added time and in advance consultation on requests to supply the CRA with information and access. Public health regulations will certainly be followed. Added practical steps will be expanded both in terms of timing or other aspects of any CRA request.

Requirements for Information (RFI) provided before March 16 and due after that day will be reviewed. Taxpayers as well as 3rd parties, including financial institutions, will be gotten in touch with where the CRA continues to need the information in the RFI.

The CRA is looking at new measures to catch people making unsupported claims for pandemic emergency benefits.

My CRA account business objections, appeals and taxpayer relief

CRA says that Canadians’ entitlement to benefits and credits are essential to continue to be provided throughout COVID-19. There should not be any delays with the handling of these objections.

For objections related to various other tax obligation matters submitted on personal or business income tax matters, the CRA is presently holding these accounts in abeyance. No collection activity will be taken with respect to these accounts right now. For objections that are due between March 18 and June 30, 2020, CRA has extended the due date to June 30, 2020.

The Canada Revenue Agency extended some of the filing deadlines for individuals, corporations and trusts in a move to help taxpayers and tax preparers dealing with the COVID-19 pandemic. Any money owed to the Canada Revenue Agency can be deferred until September 1st, 2020, with no penalties or interest payable.

Taxpayers that are unable to file a return or make a payment by the tax-filing and payment deadlines as a result of COVID-19 can request the cancellation of penalty as well as interest charged to their account. Penalty and interest will certainly not be charged if the new due dates that the federal government has introduced to tax-filing and payments are met.

As soon as CRA service operations begin again, the Taxpayer Relief Program will review claims associated with COVID-19 on a top priority basis.

Suspending individual (T1) validation and review

Some review of income tax returns was launched prior to the COVID-19 pandemic. Taxpayers might have been contacted to provide more details in connection with amounts declared. If Canadians have gotten any CRA correspondence that provides a timeline for action or submission of information or backup documents, that is currently on hold. You don’t yet need to respond.

CRA does remind everyone that t is necessary to keep in mind that, although assessments have been delayed, it does not avoid future actions or evaluations from being finished. Taxpayers will need to keep their information and documentation, in case they are chosen for review in the future.

My CRA account business summary

I hope you found this my CRA account business information helpful. It appears that right now CRA is still in “stand down” mode. However, the recent announcement that I described shows that they are letting Canadian taxpayers know that soon, they will start getting back to business.

The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Stay healthy, well balanced and safe and secure everyone.

Call a Trustee Now!