Uh-Oh! Canada Revenue Agency Might Ask for Your $14,000 CERB Back

The CRA has started sending letters to people who received double CERB payment. It might ask for the whole amount back if you applied under false pretenses.

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The CRA is getting ready to take back what’s and not rightfully yours. At the beginning of the CERB benefit, several people got dual payments: One from the CRA and the other from Service Canada. Right now, these are the only people the CRA has issued letters to, and they are just demanding the extra payment back. But that’s not where it might stop.

The next step might be people who claimed the CERB benefits when they didn’t deserve it. Fraudulent CERB recipients might be expected to pay everything back, and if they got the benefit for every month, it could add up to a hefty $14,000 bill.

If you received the CERB payment as a deserving recipient and managed to save some of it (even if it’s just one month’s payment, that is, $2,000), you can invest it in two growth stocks. This way, you may have enough assets of your own to survive for a few months in case the government doesn’t come through the next time.

An HR company

Morneau Shepell (TSX:MSI) is a Toronto-based HR and tech company. It has been in business since 1966. It started out as an actuarial and benefit consulting firm and has now evolved into tech-based HR firms that offer modern HR solutions and other relevant services to their clients. The bulk of business revenue is generated by the company’s administrative solutions and well-being sector.

MSI also offers monthly dividends, and its current yield is 2.77%. The payout ratio is 108%, which ironically is less than it has been in the past five years. Its dividend-adjusted CAGR for the past decade comes out to 16.9%. If it can sustain or improve upon it, your $1,000 investment in the company might turn to over $22,000 in two decades.

A funeral company

It might seem ominous to be in the business of death, but if you invest in Park Lawn (TSX:PLC), it can also be profitable. The company is Canadian-owned but headquartered in the U.S. It’s the only publicly traded company in this business in the country. It owns 108 funeral homes and 114 cemeteries in both Canada and the U.S. It’s constantly acquiring new locations and expanding its sphere, especially in the U.S. market, where it actually has proper competition.

It also pays monthly dividends and is currently offering a yield of 1.58%. During the market crash, the stock fell by almost 50%, but the company managed to recover most of its lost progress. It grew by 77% since the crash. And though it is still far off from its pre-pandemic or even its start-of-the-year valuation, the 10-year CAGR (dividend-adjusted) is 21.5%. It’s enough to convert $1,000 investment into $49,000 in two decades.

Foolish takeaway

Growth stocks are a smart way to convert small investment amounts into sizeable nest eggs. But they also come at a risk. You can mitigate that risk considerably through diversification. But it’s still better than relying solely on your primary income and government intervention in case you lose the primary income because of problems like the pandemic.

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. The Motley Fool recommends MORNEAU SHEPELL INC.

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