CRA 2020: 3 COVID-19 Changes That Could Last Forever

Huge changes have come to the Canada Revenue Agency (CRA) in 2020 due to the COVID-19 pandemic, and some of these measures may become permanent.

Coronavirus written newspaper close up shot to the text.

Image source: Getty Images

The COVID-19 pandemic has shaken Canadian society, ushering in radical changes in public and private life. Some of the biggest changes have occurred at the Canada Revenue Agency (CRA). In response to the pressures of the pandemic, the federal government pushed forward radical new programs to provide financial relief to individuals and businesses.

Today I want to discuss how some of these changes could last forever.

CRA 2020: How CERB could become permanent

In March, the federal government introduced the Canada Emergency Response Benefit (CERB). This radical program allowed Canadians whose job prospects were negatively impacted by the pandemic to immediately apply for financial relief. This financial relief came in the form of a taxable $2,000/month payment that would stretch for four months. As of early June, the CRA has processed more than 15 million applications.

Back in 2015, the Trudeau-led Liberals ran on a progressive campaign that pushed them to a majority government. One of the programs they had suggested was a basic income pilot, which would allow for a guaranteed monthly payment to Canadians.

In many ways, the CERB is in line with the original concept. Canadian unemployment has soared to the mid-teens, and many job losses may be permanent. This could spark an extension of the CERB program or a reinvention of the basic income idea.

Canadians should also explore building their own passive income streams. Canadian Western Bank is a great dividend stock to target for those seeking steady income. The stock last possessed a very favourable price-to-earnings ratio of 8.5 and a price-to-book value of 0.8.

Moreover, Canadian Western offers a quarterly dividend of $0.29 per share, which represents a 4.6% yield. The bank has delivered dividend-growth for 28 consecutive years.

Subsidies for businesses

Businesses have been hit hard by the COVID-19 pandemic and subsequent lockdowns. In response, the federal government allowed businesses to apply for a subsidy through the CRA. The Canada Emergency Wage Subsidy (CEWS) provides a subsidy of 75% of employee wages for 24 weeks. This is retroactive from March 15, 2020 to August 29, 2020.

The CRA wage subsidy will also help businesses re-hire previously laid off workers. As I’d mentioned previously, it may take more time than anticipated for jobs to return. Because of this, the federal government may explore more strategies that will help support businesses that are emerging from this historical crisis.

Income tax deadlines

Another measure the federal government took to support Canadians was to extend the filing deadline for income tax. The extension of these deadlines is a measure that could bleed into the next tax year. Canadians should expect a chaotic filing year in 2021 as taxpayers sift through the chaos of 2020.

The CRA will also begin sifting through CERB applications, which is expected to be a long and painstaking process. Officials may therefore look to offer further extensions that could provide relief both to taxpayers and CRA employees.

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 has no position in any of the stocks mentioned.

More on Dividend Stocks

Businessperson's Hand Putting Coin In Piggybank
Dividend Stocks

How Much Can You Really Earn in Passive TFSA Income?

With a diversified portfolio of high yield stocks like Enbridge (TSX:ENB) you could potentially get up to $4,400 per year…

Read more »

data analyze research
Dividend Stocks

2 Stocks to Invest in a Sideways Economy

Not all stocks are equally vulnerable to the weak economy and market, and the right stable investments can help you…

Read more »

Value for money
Dividend Stocks

Why Canadian Investors Should Add This Value Stock to Their Portfolios

This value stock is down now, but this comes all from outside impacts. A year from now, you'll likely wish…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

This 7.1% Dividend Stock Pays Serious Cash

After the pullback, Enbridge stock offers a compelling dividend yield of almost 7.1% It's a good consideration for passive income.

Read more »

stock research, analyze data
Dividend Stocks

3 TSX Stocks With Unbeatable Passive Income and Bargain Prices

Three TSX stocks trading at bargain prices are buying opportunities for their relatively safe and sustainable dividend payments.

Read more »

value for money
Dividend Stocks

3 Cheap Dividend Stocks Paying up to 10%

Income-seeking investors can consider buying shares of high-dividend stocks with monthly payouts, such as Slate Grocery REIT.

Read more »

Senior couple at the lake having a picnic
Dividend Stocks

Retirees: Here’s How to Boost Your CPP Pension

The CPP can only cover a portion of your daily expenses. Take control of your pension, and boost the $811…

Read more »

grow dividends
Dividend Stocks

Boost Your Passive Income With These 3 Cheap Dividend Stocks

Given their high yields and discounted stock prices, these three cheap dividend stocks could be an ideal buy to boost…

Read more »