What You Need to Know About the CRB Extension

The Canada Recovery Benefit extension provides a critical lifeline, but investing in stocks like Constellation Software (TSX:CSU) cements that financial support.

| More on:
Knowledge concept with quote written on wooden blocks

Image source: Getty Images

The Canada Recovery Benefit (CRB) has been a critical part of our economic stability over the past year. This month, the government intends to offer a CRB extension by a further 12 weeks. Here’s what you need to know about this extension and the best way to leverage this cash payout.

CRB extension details

The CRB program was launched as a bridge after the Canada Emergency Response Benefit (CERB) program ended in September last year. The program was meant to offer eligible recipients $500 a week for a maximum of 38 weeks. That period is due to end on June 19.

In light of the weak economy and a third wave of cases, the Justin Trudeau government has proposed a CRB extension. This extends the benefits by another 12 weeks until September 25. It also grants the Canada Revenue Agency (CRA) flexibility to extend the CRB further to November 20, depending on the economic situation. 

However, the payouts have been trimmed in this latest CRB extension. Eligible applicants can now expect only $300 a week in benefit payments from July 17, 2021. When the 20% tax deduction at source is considered, Canadians may receive only $270 in weekly payments from the CRB program going forward.  

The program has been extended but scaled back. Eventually, it may elapse completely. The reopening and economic rebound should allow millions of Canadians to regain employment. But for millions of others their jobs and businesses no longer exist. The recovery is likely to be uneven, which is why you may want to invest some of your CRB cash to protect your family over the long run.  

Invest your CRB cash

Canada’s extensive benefit schemes have helped millions of families survive the crisis of the past year. However, people who invested their benefit in the stock market instead of spending it all have managed to create their own extension of financial freedom. 

The TSX 60 Index is up 27% over the past one year. High-growth tech stocks are up triple digits. A well-timed, savvy investment could eliminate the need for government benefits altogether. 

In 2021, reasonably priced growth stocks like Constellation Software (TSX:CSU) are worth your attention. Constellation’s value has more than tripled over the past five years. The growth has also been remarkably steady, with minor drawdowns along the way. 

Constellation acquires niche software companies. Over the years, the company has accumulated over 300 small- and medium-sized software firms. More than half of these firms supply software services to government agencies. That makes the company’s cash flows remarkably stable and predictable. 

At the moment, Constellation stock is trading at $1,768. That’s a few weeks of CRB payments. If you could save and invest this amount, it could help you preserve capital for 2022, when the government considers winding down its benefit programs. 

Bottom line

The government has implemented a CRB extension. However, the program has been scaled back and will eventually be shut down. Canadians need to consider investing some of their spare cash in robust stocks to cushion the blow.

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

More on Tech Stocks

Concept of big data flow, analysis, and visualizing complex information for artificial intelligence
Tech Stocks

Attention, TFSA Investors: These 2 AI Stocks Look Dirt-Cheap

Constellation Software (TSX:CSU) and another AI stock are looking way too cheap to ignore any longer.

Read more »

A chip in a circuit board says "AI"
Tech Stocks

3 Canadian Tech Companies Ready to Ride the AI Train

Some business models and technologies are naturally more receptive to AI transformation than others and, consequently, are ready for AI-fueled…

Read more »

Circuit board with a microchips
Tech Stocks

3 Promising AI Stocks That Are Cheaper Than Nvidia

Nvidia is positioned to outpace the broader markets in the future. But these three AI stocks may have higher upside…

Read more »

Young woman sat at laptop by a window
Tech Stocks

Could Docebo Stock Reach $200?

Down 55% from all-time highs, Docebo stock trades at a discount to consensus price target estimates in 2024.

Read more »

potted green plant grows up in arrow shape
Tech Stocks

2 Stocks Under $50 That Could Double Your Money in 5 Years

Growth stocks can help you double your money in the next five years. And you don’t need hundreds of dollars…

Read more »

A bull and bear face off.
Tech Stocks

Bull Market Buys: 1 Top Tech Stock to Own Right Now

Down 40% from all-time highs, Datadog stock trades at a discount to consensus price target estimates in 2024.

Read more »

Money growing in soil , Business success concept.
Tech Stocks

The Smartest TSX Growth Stocks to Buy in July 2024

If you are looking for some smart growth stocks, here are four to look at right now.

Read more »

Man data analyze
Tech Stocks

Is Shopify Stock’s Growth Sustainable?

There's a reason Shopify stock (TSX:SHOP) has been getting analyst upgrades, and investors should be paying attention.

Read more »