Are you concerned that the $2,000 Canada Emergency Response Benefit (CERB) payment is ending? Is the job market not looking promising in your sector? Relax. The Canada Revenue Agency (CRA) is bringing a new Canada Recovery Benefit (CRB) on September 27 after the CERB ends. If you are still unemployed and are actively looking for a job, the $1,600 CRB payment is coming soon.
The CRA CRB coming soon
Canada’s unemployment rate has reduced from 13.7% in May to 10.9% in July, according to Statistics Canada. But the unemployment rate is uneven. Employment is higher for part-time workers than full-time workers. Sectors where jobs require close physical proximity, such as accommodation, food services, and retail trade, will take a little longer to recover. Region-wise, the unemployment rate is 15.6% in Newfoundland and Labrador, while that in New Brunswick has returned to the pre-COVID level.
To help the severely hit segments of the economy, the CRA is bringing a new Employment Insurance (EI)-like benefit for part-time workers and self-employed. Now, to get the new CRB, the following five conditions should be true for you:
- You are a Canadian above 15 years of age with a valid Social Insurance Number.
- You do not qualify for EI.
- Your 2019 or 2020 working income was at least $5,000.
- You lost your job or suffered from income reduction because of COVID-19 related issues.
- You did not quit your job voluntarily or were terminated for reasons like poor performance or non-compliance.
The similarities and difference in EI and CRB
The CRA is launching the CRB to support unemployed Canadians until they get a job or start earning sufficient income. Service Canada will pay the EI benefit from the contributions both the employee and employer made during the employment. The CRA will pay the CRB from the taxpayers’ money. While the EI does offer better benefits than the CRB, the latter is a good bargain for no premium.
The government will make both the CRB and EI payments in arrears and add them to your taxable income. You will have to apply bi-weekly or monthly for the benefit. Like the EI, the CRB also gives sickness and caregiving benefits. The Canada Recovery Sickness Benefit (CRSB) gives you $500 for two weeks if you fall sick or are self-isolated. The Canada Recovery Caregiving Benefit (CRCB) gives you $500 a week for caring for a dependent.
But what sets the CRB and EI apart is the benefit amount and period. The CRB is the minimum that you can get in the new EI. You can get the CRB of $400 a week for up to 26 weeks. This is the minimum for EI. Your EI can stretch to 45 weeks and give you up to $573 a week, depending on your insured working hours, the unemployment rate in your area, and average weekly income.
Here’s a better cash benefit
Depending on the CRA benefits is not a good way to handle emergencies. What if there was no CERB or CRB? It’s always good to have a personal benefits pool that can keep your pockets full in emergencies. If you have $200,000 in your Tax-Free Savings Account (TFSA), invest them in pipeline operator Enbridge (TSX:ENB)(NYSE:ENB) and earn $1,300 a month.
Enbridge makes money by transmitting oil and natural gas through its largest pipeline infrastructure in North America. It has stable cash flows, which it gives as dividends. It even increases its dividend per share every year between 8% and 11% by building more pipelines and transmitting more oil and natural gas.
The pandemic has grounded planes and closed factories, which reduced oil demand and, therefore, oil supply and in turn reducing Enbridge’s revenue by 40%. However, its cash flow increased by 12% in the second quarter driven by higher cash flows from renewable energy. Its stock is down 20% year to date, which has increased its dividend yield to 7.86%. This is a good time to lock such a high yield, which will also grow every year for a lifetime.
Your Enbridge investment could give you $2,000 in passive income by 2026 as the company increases its dividends. This money will not be added to your taxable income.
