Taxman will seek COVID assistance clawback in 2021

Government can’t afford to ignore tax on CERB and other assistance payments

It may seem ironic for the Canadian Taxpayers Federation (CTF) to advocate for payment of a federal tax in 2021.

But the federation says it is essential for the federal government to collect the taxation owed for the many financial subsidies handed out by Ottawa this year to alleviate the economic impact of the COVID-19 pandemic.

British Columbians have benefited from those programs, most notably the Canada Employment Response Benefit (CERB) of $2,000 a month, however the money received is taxable unless it is repayed.

Kris Sims, B.C. director for the CTF, said she hopes people are putting some of that money aside to account for tax payments come next year.

“Right now that money is coming to you raw, no tax is coming off it. The government will be coming for that next year,” Sims said.

“Our hope that people are being prudent right now and setting some of that money aside to pay the tax.”

READ MORE: COVID-19: BC sales, carbon tax payments must be paid by Sept. 30

While it was stated any COVID-19 pandemic assistance would be taxable, Sims still feels the federal government didn’t do enough to stress that point, or to stress applying for the money only if you really need it.

“We are talking about billions here and the federal government is in no position financially to not collect those taxes next year. There might be ways to soften the blow – deferred payment over a period of time perhaps – but frankly we can’t afford to forgive those taxes.

“In B.C., the province is facing a $12.8 billion deficit this year so there is a lot of work ahead to climb out of a hole.”

Sims said it gave pause for concern to see people with the opportunity to return to work deciding instead to stay at home and collect CERB.

“People would have been better off to return to work where that opportunity existed instead of choosing to have a CERB summer because the taxation could be a financial blow come next year,” she said.

“But you can’t blame people for having to collect it because COVID-19 is not their fault. It would have been a bit more prudent for the government to plan for rainy day, but the rainy day came and we were not ready for it.”

Sims said poor taxpayer dollar spending choices have left the federal Liberals with little room to maneuver when confronted by an escalating debt.

She suggests benefit recipients see a financial advisor to best understand how to off-set any pending tax hit, or utilize the online tax calculation tool provided by the Canada Revenue Agency.

The CTF earlier this month also commended the province hitting the pause button on three different tax hits: BC Carbon Tax hike from eight to 10 cents a litre delayed until April 2021, Employer Health Tax payment delayed until Dec. 31, 2020; and the beverage Pop Tax and Netflix Tax delayed until April 2021.

READ MORE: B.C. deficit forecast $12.8 billion after first three months of COVID-19

Like us on Facebook and follow us on Twitter.

taxes

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Brian Shiosaki helps his neighbours by shoveling the sidewalk near his home in Rutland during a large snowfall in Kelowna Tuesday. (Carli Berry/Capital News)
Special weather statement in effect for Okanagan Valley

The Okanagan could see up to 15 centimeters of snow on Friday

Sprott Shaw College's Lunch with Santa, pictured here at Penticton's 2019 Christmas Parade, will be held virtually this year on Dec. 5. (Western News File)
Construction activity in Summerland was busy in September, according to the latest Summerland building permit statistics. (File photo)
Summerland’s September building permits worth close to $8M

Statistics show increase over same month a year earlier

Rebecca Rudnisky, an X-ray technologist at the Summerland Health Centre, explains the operations of the new digital X-ray unit during a tour by members of the Summerland Health Care Auxiliary. (Contributed)
New x-ray machine in Summerland thanks to Health Care Auxiliary

Auxiliary raised over $800,000 to replace old equipment

Provincial health officer Dr. Bonnie Henry presents modelling of COVID-19 spread in B.C., March 25, 2020. (B.C. government photo)
B.C. sets another COVID-19 record with 203 new cases

up to 1,766 active cases in B.C., two more deaths

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Instead of having a party, Thomas Smith and Tiffanie Trudell have asked the public to send their son, Damien (pictured), happy birthday cards. (Contributed)
“I’m just going to be lonely:” Shuswap family asks for help celebrating son’s birthday

Parents astonished as people the world over say they will be sending cards

Elections BC has sent out almost 700,000 mail voting packages as of Oct. 14 with just under 3.5 million registered voters. (Black Press Media File)
By Oct. 21, Elections BC had received an estimated 396,900 returned vote-by-mail packages. This represents about 55 per cent of packages issued to date. (Black Press Media File)
Early voters in Southern Interior contribute to breaking records

61,900 vote-by-mail packages were requested in the Southern Interior

(Kamloops this Week)
Grandfather accused of using grandchild to make child porn residing in Salmon Arm area

66-year-old’s offences alleged to have taken place in Kamloops

Stacey Darren Alec pleaded guilty to three charges relating to child pornography at the Vernon law courts Wednesday, Oct. 21, 2020. (Caitlin Clow - Morning Star)
Guilty plea in child porn charges for Vernon man

The man in his 50s will appear for sentencing Nov. 9

Vernon-Monashee candidate Harwinder Sandhu signs have been tampered with repeatedly leading up to the Oct. 24 election. (Contributed)
More Okanagan election signs vandalized

Vernon-Monashee NDP candidate Hardwinder Sandhu hit hard with repairs

Kristy Dyer Cartoon
Dyer: Wood pellets cause carbon emissions in more ways than one

Kristy Dyer has a background in art and physics and consulted for Silicon Valley

Most Read