DFK Tax Digest – Winter 2021

  • Canada Emergency Rent Subsidy – On November 2, 2020, the federal government introduced legislation which includes measures to implement the new Canada Emergency Rent Subsidy (“CERS”).  CERS replaces the previous federal government rent subsidy program – the Canada Emergency Commercial Rent Assistance (“CECRA”) program.  The CECRA program is now closed.
  • Tax Treatment of Canada Emergency Business Account (CEBA) – The Canada Emergency Business Account (CEBA) was launched by the Federal Government on April 9, 2020.  The purpose of the program is “…to support businesses by providing financing for their expenses that cannot be avoided or deferred as they take steps to safely navigate a period of shutdown, thereby helping to position businesses for successful relaunch when the economy reopens.”   It does this by providing small businesses and not-for-profits with interest-free loans of up to $40,000.  If the balance of the loan is repaid on or before December 31, 2022 the government will forgive 25% of the loan (up to $10,000).
  • Corporate Ownership of Life Insurance Policy – There are several advantages to owning a life insurance policy within a corporation that not only provide positive tax implications in the present but also minimize future risk and tax costs. Corporate-owned life insurance policies can provide liquidity and build wealth for owner-manager businesses and are useful tax and estate planning tools.  Note that when a life insurance policy is owned by a corporation, the shareholder should not be designated as a beneficiary of any proceeds to avoid shareholder benefit issues.
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