Business owners, in particular, need assistance to interpret the various federal and provincial pandemic programs, which can also vary depending on where a business is based.drazen_zigic/iStockPhoto / Getty Images
The recent round of pandemic lockdowns has forced advisors to get up to speed on the latest government programs that could help clients and their families who are most affected.
Federal and provincial COVID-19 support programs have evolved since the pandemic started almost two years ago for individuals and small business owners.
For example, Ottawa’s controversial Canadian Emergency Response Benefit (CERB) for people put out of work by pandemic shutdowns is now closed, but new programs like the Canada Worker Lockdown Benefit (CWLB) are in effect. Programs for affected business owners have also changed.
The good news is that criteria and eligibility for many of the programs are clearer now than those first launched in 2020 because policymakers and the public have become more accustomed to lockdown life, experts say.
Advisors can do their part by helping clients navigate the application process and ensure they’re applying for the proper support programs, says Barry Travers, a partner and national leader at KPMG LLP’s public sector tax practice in Toronto.
Specifically, advisors should help clients go through the information that’s available online, answer the appropriate questions, and make sure they’re eligible before they apply “so that [they] don’t get [themselves] into a situation [in which they] get paid out and then have to start paying back,” Mr. Travers says.
An example is with CERB, which some workers were forced to pay back when they later discovered they weren’t eligible. The federal government also recently passed a bill requiring publicly traded corporations that pay taxable dividends to shareholders to repay any Canada Emergency Wage Subsidy (CEWS) benefits received during the same claim period.
Mr. Travers says the federal government has also made it easier to understand whether benefits provided are before or after taxes.
For example, Ottawa has continued its Canada Recovery Caregiving Benefit and Canada Recovery Sickness Benefit programs, which each provide people who are eligible with $500 a week ($450 after taxes withheld).
A more recent program for individuals is the CWLB, which is for employed and self-employed people who can’t work due to a mandated COVID-19 lockdown. The benefit pays out $300 a week ($270 after taxes). An Employment and Social Development Canada spokesperson says the program is available to workers who are ineligible for Employment Insurance (EI) and those who are eligible for EI, “as long as they have not and will not be paid benefits through EI for the same week.”
Programs expanded for more coverage
On the business side, some pandemic programs have been updated to make them more broadly available, Mr. Travers says.
The CEWS and Canada Emergency Rent Subsidy were replaced with two new programs last fall, each offering wage and rent support: the Tourism and Hospitality Recovery Program (THRP) and the Hardest-Hit Business Recovery Program.
Mr. Travers says the THRP has been made available to any organization affected directly by the lockdowns to the extent they experience the required revenue decline, not just tourism and hospitality businesses.
“They’ve opened it up more broadly than they ever thought they had to because of the current lockdown,” he says.
Tim Lew, certified financial planner with Kind Wealth, a fee-for-service financial planning firm, points to some provincial programs that advisors should also be on top of.
One example is the Ontario COVID-19 Worker Income Protection Benefit, which will give workers up to three days of paid emergency leave for coronavirus-related reasons such as getting a test, self-isolating, and caring for someone who has it.
On the business side, the province recently announced $10,000 grants for small businesses forced to close due to public health measures, such as gyms, museums and galleries, tour services, and before- and after-school programs. British Columbia is also providing grants of up to $10,000 for certain businesses mandated to shut down temporarily amid surging COVID-19 cases.
But for many businesses, the relief may not be enough as the pandemic drags on.
“It remains to be seen if these relief programs encompass more of a paper or real impact with regards to the sustainability of small business operations through this lockdown window,” Mr. Lew says.
One major concern – and something Mr. Lew says advisors will need to help clients figure out – is how the extended lockdowns will affect business owners approaching retirement, especially if they’re relying on the income from the sale of the company to fund their retirement.
How to rely on investment income
Aaron Schechter, a tax partner at Crowe Soberman LLP in Toronto, says advisors can help clients find ways to take advantage of government support programs for which they’re eligible while also drawing income from their investment portfolios, as needed, to help cover their bills during the pandemic.
“The income tests associated with the Canada Worker Lockdown Benefit don’t take into account portfolio type investment income and the Canada Recovery Caregiving Benefit and the Canada Recovery Sickness Benefit have no income tests at all,” he says. “So, advisors shouldn’t be worried about disqualifying their clients.”
Business owners, in particular, need assistance to interpret the various federal and provincial pandemic programs, which can also vary depending on where their businesses are based, Mr. Schechter adds.
“These programs have been changing and evolving continuously and they’re complicated,” he says. “I don’t know how the government expects regular business owners to keep up and actually do this by themselves.”
Mr. Schechter says business owners should seek professional advice if they want to make a claim under any of the wage or rent subsidy programs.
Take steps to connect with affected clients
Jason Heath, certified financial planner with the fee-only planning firm Objective Financial Partners Inc. in Markham, Ont., recommends advisors be proactive and contact clients who may be affected by the pandemic lockdowns – either themselves or their family members.
For example, parents may have adult children who have lost income due to pandemic shutdowns and are looking for ways to help them out financially.
“You see a lot of stories these days about parents providing financial support to help their children buy their first home,” he says. “But, I think there are other opportunities to help and certainly a job loss could be one of them.”
Mr. Heath says advisors should also contact clients proactively and share relevant information on government programs as they’re introduced.
“Even if they’re not the experts, and even if the client already knows about [these programs], there’s no harm and just saying, ‘Hey, I look out for more than just your investments or more than just your insurance,’” he says. “If ... you bring up government benefits they didn’t know they qualified for, you found free money for them and they will be grateful.”
Editor’s note: A previous version of this article incorrectly stated the Canada Worker Lockdown Benefit (CWLB) is available only to those who do not qualify for EI.
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