CRA Update: CERB Is Ending in September. Prepare Now

The CERB program is, unfortunately, coming to an end. However, if you save even a few hundred dollars of CERB payments and make the right investments, it could alter your financial situation forever.

The Canada Emergency Relief Benefit (CERB) is ending soon. Finance Minister Bill Morneau indicated this during the recent fiscal snapshot delivered by the government. In other words, millions of Canadians must now prepare to wean themselves off the popular CERB program.

According to Statistics Canada, CERB has over 8.16 million applicants and has cost the government a total of $53.53 billion thus far. The government is ending the program to save costs and also encourage people to start looking for work as the economy reopens. For millions of Canadians, this means they have only a few weeks left to collect support benefits. 

Saving some cash and deploying it in the right places could secure your future, even when the CERB program ends. Here’s how. 

Save a portion of CERB

The maximum amount any CERB applicant can claim is $8,000. This amount should have been plenty to cover expenses over the past few months. Savvy savers who set even 10% aside each bi-weekly payment should now have $800 saved up. Even if you start saving a portion of your CERB payments going forward, you can collect $800 in a few weeks. 

By itself, $800 isn’t much. In most parts of the country, that would barely cover a month’s rent or two months’ worth of groceries. However, investing this amount in the right stocks could help you create a stable and expanding stream of passive income. Think of it as a mini-CERB you’ve created yourself. 

Invest in robust stocks

It’s difficult to pick stocks, especially with the economic crisis we now face. However, some companies have stood the test of time and performed better than expected, despite the pandemic and lockdown. 

Utility giant Fortis, for example, has barely lost any value. The stock is down a mere 5% year to date, while the dividend yield remains high at 3.74%. Meanwhile, the stock price has appreciated 7% compounded every year for the past decade.

If Fortis delivers similar gains and dividends over the next 10 years, a $800 investment could turn into $1,633 by 2030. If you top up your savings by just $200 every year, the investment could be worth $4,432 by 2030. 

Robust stocks like Fortis should provide you a financial cushion over the long term. However, if you’re trying to create wealth, you might want to look into growth stocks instead of income stocks. 

Growth stocks

Growth stocks could help you reach your goals much faster. Constellation Software, for example, has delivered a 40-fold return since 2010. The enterprise software giant acquires and integrates smaller companies to drive expansion. A similar result over the next 10 years could turn your $800 investment into $32,000 by 2030. 

In other words, saving just 10% of your CERB payments and deploying it in the right stock could help you accumulate enough capital to make a downpayment on a house within 10 years. That’s the power of compounding wealth through savvy investments.  

Bottom line

The wildly popular CERB program is, unfortunately, coming to an end. However, if you save even a few hundred dollars of CERB payments and make the right investments, it could alter your financial situation forever. Good luck, and stay safe! 

Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Software.

More on Investing

man studies at computer
Dividend Stocks

No Workplace Pension? Here’s the Math Behind a $1,000-a-Month Income Goal

A $1,000 monthly income goal becomes more manageable when you separate the capital target from the savings needed to reach…

Read more »

concept of growth
Dividend Stocks

An Ideal TSX Dividend Stock for Consistent TFSA Passive Income

This company has increased its dividend annually for decades.

Read more »

AI investing could have upward trajectory
Stocks for Beginners

3 of the Best Canadian Stocks to Buy and Hold in a TFSA

Learn why now is a good time to buy Canadian stocks as the market dynamics shift due to changes in…

Read more »

Tractor spraying a field of wheat with fertilizer
Dividend Stocks

Nutrien’s Dividend Is Only Part of the Story: Here’s the Recovery Case

Nutrien’s recovery case rests on better asset decisions and spending discipline, with a dividend providing income along the way.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Friday, November 6

The TSX could remain volatile today after Thursday’s sharp selloff as investors await key Canadian and U.S. employment data and…

Read more »

worker with shovel looks into hole in dirt
Stock Market

Why Thursday’s AI Stock Sell-Off Hurt So Much, and What Canadian Investors Should Do Now

"Stocks go down faster than they go up, but they go up more than they go down."

Read more »

Group of people in a line at an ATM waiting to make a cash withdrawal
Stocks for Beginners

TD vs. Royal Bank: Which Dividend Stock Would I Buy With $10,000?

TD offers slightly more current income, while Royal Bank's broader earnings mix earns my preference for a patient holding.

Read more »

financial chart graphs and oil pumps on a field
Stocks for Beginners

What $10,000 in Freehold Royalties Could Add to Your Income Over a Year

Freehold could produce about $634 in annual income from a $10,000 budget, with commodity prices still influencing the payment.

Read more »