CRA 2020: How to Get Emergency Financial Relief Now

Many Canadians are struggling to adjust to the disruptions caused by COVID-19. Fortunately, financial relief is on the way in April for those who need it.

A person suffering

Image source: Getty Images

Deputy Prime Minister Chrystia Freeland has called the COVID-19 outbreak the greatest crisis faced by Canada since World War II. Many Canadians have been thrust into a desperate financial situation and are looking for relief.

Fortunately, the Canadian government has mirrored others around the world. Canada has rolled out aid packages for its citizens. I’d discussed the package when it was in its infancy. The bailout has since been altered to better fit the needs of Canadians right now. Today, I want to discuss the Canada Emergency Response Benefit (CERB). Applications are set to open next week.

Financial relief: CERB applications open April 6

CERB applications will open on April 6. Canadians have been encouraged to submit based on the month they were born. Those born in January, February, and March should apply on the Monday, April 6, those born on April, May, and June on Tuesday, and so on. CERB is available to all Canadians age 15 and older who have stopped working because of the COVID-19 disruptions. Applicants have to have earned at least $5,000 in 2019 or in the 12 months preceding the application.

Prime Minister Justin Trudeau has called for parliament to reconvene to work more on this substantial economic package. Businesses all over Canada are feeling the squeeze of this crisis. Calls are growing louder for the government to take more decisive action.

Finance Minister Bill Morneau confirmed that businesses, regardless of their size, will be eligible to apply for the Canada Emergency Wage Subsidy. However, they will need to show that they have experienced a 30% drop in gross revenue or more over the past year.

Canadians face desperate times

Over one million Canadians filed for employment insurance in the first week of lockdowns in Canada. The record applications for financial relief has put a historic burden on the CRA. Unemployment could hit 15% amid this pandemic, according to a forecast by the parliamentary budget watchdog.

Meanwhile, Royal Bank and other top financial institutions have suggested that Canada has already slipped into a recession. This should come as no surprise, considering the magnitude of the economic shutdown. Banks have projected that Canadian GDP could fall by 15-20% in the second quarter.

Many Canadians were struggling with high debt levels before this crisis. Household debt-to-income ratio came in at $1.763 in the fourth quarter of 2019. This was a marginal improvement from the prior quarter. However, it is still a worryingly high figure.

The MNP Consumer Debt Index, released on Monday, showed that half of Canadian respondents (49%) said they were on the brink of insolvency. Respondents said they were $200 or less away from not being able to meet their debt obligations each month. A quarter of respondents said they were already unable to meet these obligations.

Conclusion

This survey underscores the precarious position many Canadians find themselves in today. Those who have lost their jobs due to the COVID-19 disruptions may want to seek financial relief through CERB in April. The Canadian government must act decisively to ensure economic stability and guarantee the financial health of those who have been blind-sided by this crisis.

Readers: stay safe and always remember to explore all financial relief options that have been made available to you.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan owns shares of ROYAL BANK OF CANADA.

More on Investing

growing plant shoots on stacked coins
Dividend Stocks

4 Ways to Grow $100,000 Into $1 Million in Retirement Savings

Anyone can build a million-dollar retirement portfolio. Here are four ways you could practically grow $100,000 to $1 million.

Read more »

Pot stocks are a riskier investment
Cannabis Stocks

Steer Clear: This Stock Spells Trouble

A newly listed cannabis stock is outperforming in 2024 but investors should stay clear to avoid trouble and losses.

Read more »

Red siren flashing
Energy Stocks

Buy Alert: 4 Reasons Why TC Energy Stock Is a Must-Own Now

A large-cap energy stock is a strong buy today for four compelling reasons.

Read more »

Shopping and e-commerce
Tech Stocks

Is Lightspeed Commerce Stock a Buy Now?

Despite the near-term weakness, I am bullish on Lightspeed due to its solid fundamentals, healthy growth prospects, and attractive valuation.

Read more »

A shopper makes purchases from an online store.
Dividend Stocks

3 Reasons to Buy TFI Stock Like There’s No Tomorrow

TFI stock (TSX:TFII) had a hard 2023, but now it's set up for a solid 2024, with an acquisition that…

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

5 Secrets of TFSA Millionaires

These lesser-known secrets can help you set up the perfect long-term portfolio and achieve a million-dollar TFSA!

Read more »

Canadian stocks are rising
Dividend Stocks

iShares S&P/TSX Capped REIT Index ETF (TSX:XRE): Why I Like this ETF Better Than a Rental Property

XRE is a great ETF for gaining exposure to the Canadian real estate sector.

Read more »

analyze data
Dividend Stocks

How to Build a Powerful Passive-Income Portfolio With Just $20,000

These fundamentally strong TSX stocks have paid and increased their dividend in all market conditions. Add these stocks to build…

Read more »