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

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

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

Business man on stock market financial trade indicator background.
Energy Stocks

Market Volatility: 2 Value Stocks to Buy Right Now

The market volatility does not look like it will let up any time soon, but these two stocks are too…

Read more »

movies, theatre, popcorn
Tech Stocks

Cineplex Stock Shoots Up as Meme Stocks Rally

Cineplex (TSX:CGX) stock seems to have started a rebound after meme stocks started climbing on Monday. But should investors buy…

Read more »

Target. Stand out from the crowd
Tech Stocks

This Is, Hands Down, the Top Canadian High-Growth Stock to Buy This Week

I expect this attractive Canadian high-growth stock to rally in the near term, as it’s set to announce its latest…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Tech Stocks

Why Sierra Wireless (TSX:SW) Stock Has Surged 79% in 2022

Sierra Wireless Inc. (TSX:SW)(NASDAQ:SWIR) is a tech stock that has soared on the back of a big acquisition announcement last…

Read more »

Financial technology concept.
Tech Stocks

BlackBerry Stock is Rallying! Buy Before It’s Too Late

BlackBerry’s improving fundamentals have helped its stock soar lately and outperform the broader market.

Read more »

A gamer uses goggles to play an augmented reality game. tech
Tech Stocks

The Best U.S. Tech Stocks to Buy in August

Tech stocks in the U.S. such as Microsoft and Broadcom have the potential to generate massive wealth for long-term investors.

Read more »

grow money, wealth build
Tech Stocks

How to Create $100,000 by Investing $500/Month

These two TSX stocks will aid you in building wealth of $100,000 over the next 8.5 years.

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Tech Stocks

This Battered Growth Stock Could Soar Over the Next 3 Months

Docebo (TSX:DCBO)(NASDAQ:DCBO) is a top work-from-anywhere stock that may be in for a sizeable move to the upside in coming…

Read more »