CAUTION: 2 Ways the CRA Could Take Back Your $8,000 CERB!

CRA is over its generous “Santa-like” CERB distribution phase, and is now back to default recovery mode. Anyone who got CERB when they didn’t deserve it, have to give it back.

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When the pandemic was at its worst, every government had to fight several battles simultaneously to keep things from completely falling apart. They had to beef up their health sector, lend a hand to their industries to keep the wheels of the economy coming to a complete halt, and help the people who had their livelihood taken away by the pandemic.

CERB came at a time when it was needed most. Despite the speculations and debates that CERB wasn’t exactly the best way to keep people (and economy afloat), it provided an invaluable service. The government decided to go with trusting the people route instead of thorough scrutiny one when it came to the disbursement of CERB, the need of the hour.

But now that things have settled down a bit, CRA has returned to its core competency: Ensuring payment of financial obligations. Usually, the CRA is interested in taxes, but make no mistake: if you got $8,000 in CERB when you didn’t quality, CRA will track you down and take it back. There are two ways that CRA can take back your CERB.

You send it back

Even if you qualified for CERB when you started getting your $2,000 a month payouts, that doesn’t mean you are eligible for the full $8,000. If your financial situation changed after you started receiving CERB payments, you might need to send it back.

It might be because you found paid work, or became self-employed and started earning a decent sum, all the while getting CERB cheques on the side.

You will also need to send it back if you applied and received CERB from both CRA and Service Canada. That’s the most polite way CRA can take back your $8,000 CERB, or whatever amount you receive for which you didn’t quality.

A venture capital stock

If your financial situation is tight after sending back the CERB, you may not be able to save much. Rather than shopping around for expensive stocks, pick one of the high-growth stocks like Xebec Adsorption (TSXV:XBC) that is currently trading at just $4.11 per share.

Just because it’s under $5, it doesn’t mean that this stock isn’t expensive. It is trading at a price to earnings ratio of 45, and price to book 8.4 times.

Apart from being a bit oversold, the stock is quite solid. Its balance sheet is strong. The company focuses on gas purification and Cleantech. It has a strong footprint in Europe and Asia as well. The company is well poised for the clean energy transformation, which means that even that the technology and products its offering now will become even more relevant in the future.

It has been an explosive grower in the past five years, with compound average growth rate (CAGR) reaching to a monstrous number of 117%. While the projection is too optimistic, but if the company can sustain this growth rate for just six years, it can convert your $1,000 investment into $100,000, equivalent to 50 months of CERB.

Foolish takeaway

If you are receiving CERB, you should be actively looking for work because no matter how generous the government is willing to be, it can’t keep supporting its people through CERB forever.

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 Adam Othman has no position in any of the stocks mentioned.

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