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Moody Tax Law speak on COVID-19 business impacts

Posted on March 30, 2021 by 40 Mile Commentator

By Justin Seward

Commentator/Courier

Vexxit Business in conjunction with Alberta Chamber of Commerce hosted a Simplifying Federal COVID-19 Relief for your Businesss discussion on March 24.
Global News Edmonton senior anchor Jennifer Crosby moderated the hour-long discussion with Moody Tax Law’s Chief Executive Officer and director Kim Moody and director Kenneth Keung.
Crosby began the discussion by asking Moody about how business has been impacted in Alberta in the last year.
“This whole last year has been a real struggle,” said Moody.
“Especially private business owners in my view and I’ve been rather loud about this. I think especially in certain industries, the private business sector has disproportionately taken the brunt of the lockdowns and the restrictions and it’s just a terrible time. There’s some industries that have certainly thrived and Alberta business owners are pretty resilient. I call tell you across the board, it’s pretty terrible.”
Keung was asked about he is adapting to the changes and the rules and regulation coming out in recent announcements.
“There was a lot of new announcements throughout 2020 and it was a very busy year,” said Keung.
“I had so many calls from across the country — that forces me to keep up to date. For regular business owners who are not legal experts, it’s almost impossible to truly understand the rules just because how truly complicated they are.”
One of the poll question was if businesses were not applying for federal relief, what is the main reason for the hesitation and Moody was asked why businesses are not choosing to collect the funds that are there
“I wouldn’t say a lot, but routinely, yes,” said Moody.
“There’s a few reasons why. Number one- they’re scared, because there (has)been no shortage of threats made by our illustrious Prime Minister about how they’re going to go to jail or penalties or what have you—that’s had an impact and people are scared. Second, it’s pretty easy online. I call it the ‘Click, click, very easy to get subsidies.’ But realizing ‘Holy cow, is it really that easy?’ And finding out later that ‘Gese this is really complex. I’m nervous to apply again.’ I think one of those two usually in the hesitation camp I call it. It’s usually one of those two reasons.”
Moody thought the obvious reasons for businesses to qualify for benefits, is if they’re successful, they will receive the funds and he reiterated that there are no shortage of businesses that are struggling.
“Hopefully this funding allows them to employ Canadians and to help people pay their bills and to allow the valuable small businesses that drive our country to continue,” said Moody.
“It’s just a shame, a lot of them unfortunately, are in distress and many cases fold.”
Programs include the Canadian Emergency Wage Subsidy (CEWS), Canadian Emergency Rent Subsidy (CERS).
CEWS entitles up to 75 per cent as a maximum wage subsidy rate for employees, the revenue drop will continue to compare the eligible revenue to a time prior to March 2020.
Keung said that could be up to $847 a week per employee.

CERS(Canadian Emergency Rent Subsidy) is where Canadian businesses, non-profit organization or charities who have seen a drop in revenue during the COVID-19 pandemic can apply to cover a part of their commercial rent or property expenses from September 2020 to June 2021.
“This one as we seen in the polls (is) much less utilized,” said Keung.
Canada Emergency Business Account (CEBA) started out as a $40,000 loan available to certain parties and had to be repaid by Dec. 31, 2022 and then businesses were eligible for a 25 per cent reduction and $10,000 would be forgiven.
“When the program first rolled out last March and early April, it was pretty generous in terms of what you can spend the money on,” said Moody.
“ It got criticized quite a lot for eligibility problems and because it was tied to a payroll account and the size of your payroll account. They really tinkered with CEBA a lot over the last year.”
It was announced last week that CEBA applications are now extended to June 30.
A $20,000 extension was announced late last year and can increase that loan to $60,000.
If a business lands the extra $20,000, they will be required to have revised contractual terms.
Canadian Emergency Response Benefit (CERB) was rolled out to get funds into the hands of Canadians quickly.
“However as time passed, it became rather obvious that it was a little too easy to get the money,” said Moody.
“Yes, fraud was considered in the design of the system. I’m always looking for information on this because my suspicion is that the fraud was a lot more than they budgeted for and it also contributed to what I call ‘CERB vacation,’ where there’s a lot of workers kind of like being paid the amount of money that they’re being paid and ultimately being paid more than they would’ve earned.”
CERB ended Sept.26, 2020 where people could then go in EI.
These programs have costed Canada CERS(Canadian Emergency Rent Subsidy) is where Canadian businesses, non-profit organization or charities who have seen a drop in revenue during the COVID-19 pandemic can apply to cover a part of their commercial rent or property expenses from September 2020 to June 2021.
“This one as we seen in the polls (is) much less utilized,” said Keung.
Canada Emergency Business Account (CEBA) started out as a $40,000 loan available to certain parties and had to be repaid by Dec. 31, 2022 and then businesses were eligible for a 25 per cent reduction and $10,000 would be forgiven.
“When the program first rolled out last March and early April, it was pretty generous in terms of what you can spend the money on,” said Moody.
“ It got criticized quite a lot for eligibility problems and because it was tied to a payroll account and the size of your payroll account. They really tinkered with CEBA a lot over the last year.”
It was announced last week that CEBA applications are now extended to June 30.
A $20,000 extension was announced late last year and can increase that loan to $60,000.
If a business lands the extra $20,000, they will be required to have revised contractual terms.
Canadian Emergency Response Benefit (CERB) was rolled out to get funds into the hands of Canadians quickly.
“However as time passed, it became rather obvious that it was a little too easy to get the money,” said Moody.
“Yes, fraud was considered in the design of the system. I’m always looking for information on this because my suspicion is that the fraud was a lot more than they budgeted for and it also contributed to what I call ‘CERB vacation,’ where there’s a lot of workers kind of like being paid the amount of money that they’re being paid and ultimately being paid more than they would’ve earned.”
CERB ended Sept.26, 2020 where people could then go in EI.
These programs have costed Canada $252 billion.

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