Did you apply for the Canada Recovery Benefit (CRB) last week? Did you get error code 026, which stated, “You cannot apply for the Canada Recovery Benefit as you have applied for all eligible periods. The next periods become available every second Monday”? The Canada Revenue Agency (CRA) has asked you to reapply this week.
Many Canadians who depended on the Canada Emergency Response Benefit (CERB) to pay their bills applied for the CRB. Under the new benefit, they would get $1,000 before tax for two weeks of eligibility. The CRB is for those who don’t have an Employment Insurance (EI) or have exhausted their EI.
The glitch
When Canadians applied for the CRB, the CRA’s system did a check on various data sets to confirm eligibility. The problem occurred, because the CRA had changed the way it shares information with Employment and Social Development Canada (ESDC) and did not update it in its system.
The idea behind this system check was to ensure that one person doesn’t apply for both the CRB and EI. Instead of making things easy, the system complicated it. Individuals who were eligible for or were getting EI earlier this year got the error. For the rest (around 600,000 Canadians) CRB application got approved.
Now, the CRA has updated the information and is updating it daily. Hence, it is asking those who got the error code to reapply. If your information says that you are eligible, the CRA will process your application. But if you are still getting the same error, you will have to wait longer. The CRA helpline will be busy.
How to reapply for the CRB
This time when you apply for the CRB, be careful and select the right option. The CRA has changed the wordings to make things clear. The option reads:
- “you were not employed or self-employed for reasons related to COVID-19,” or
- “you had a 50% reduction in your average weekly income compared to the previous year due to COVID-19.”
The first option applies to you if you lost your job before the pandemic and were receiving EI. But now, your EI has been exhausted, and you are still out of job because of COVID-19. And you are actively searching for work. The rest of the application process is the same.
A better benefit than the CRB
This time, the government is giving cash benefits. But government benefits won’t be there when you have a personal crisis. Your financial strength is put to test in a crisis. It was tested in the 2009 Great Recession, and it is being tested again. In 2009, the Canadian government created the Tax-Free Savings Account (TFSA) to encourage Canadians to save for the next crisis.
You can contribute up to $6,000 annually this year in the TFSA. If you don’t have that much, you can contribute $100 a week. As this is your emergency money, you might not want to risk losing it. You can invest it in a high-dividend stock like Enbridge (TSX: ENB)(NYSE: ENB).
The oil and natural gas pipeline business is something even Warren Buffett prefers because of its stable cash flows. The pandemic-induced travel restrictions have reduced oil demand, because of which the pipelines are not operating at full capacity.
Enbridge neither produces nor stores oil. Hence, its exposure to oil prices is minimal. It earns money when oil transmits through its pipelines. Its job is to build and maintain these pipelines. Once they are built, it just rakes in cash for pulling the plug. Its profits are intact, and its cash flows are also strong, sufficient to pay dividends and maintain pipelines.
But the oil crisis has reduced Enbridge stock by 30% and inflated its dividend yields to 8.48%. This means if you invest $5,200 ($100 a week) in Enbridge, the stock will pay you $440 a year in dividends. And when the oil demand returns, probably in the next three years, it will appreciate your $5,200 to $7,300.
