The Canada Emergency Wage Subsidy (CEWS), which has generously provided emergency relief for wages paid during periods of revenue decline, has been extended, potentially to the end of the year. But there’s one big problem with the program, according to 65% of our August Knowledge Bureau poll respondents, and that’s complexity. Close to 700 financial professionals believe that the revamped program is too complicated, although many stated this complexity is likely required to ensure fairness. Here’s what they said:
“Yes, it’s complicated but it should be. With a $343 billion deficit this needed to be reined in and become a little more blended. The previous hard line on Revenue decline was both unfair and arbitrary and this method provides a fairer approach for all small business. I do agree that using a monthly time frame would have been better than 14-day periods for payroll periods.” - Alan Rowell
“At a minimum CRA should have had a stub period right at the beginning so that calculations were based on month end periods - these period dates are just ridiculously stupid!” - Karen Zeiger
“CRA has made it easy for the small business who has a competent bookkeeper to apply for the CEWS. It also keeps people accountable as you have to use real figures.” - Andrea Fockens
“It is even complicated to understand for an accountant and almost impossible for a small business person. The CRA spreadsheet helps but after my client completed the subsidy calculated was $0, even though my quick review calculated it should be 75% of wages.” - Lynn Johnson
“It is too complex and revenue lost from 2019 to 2020 cannot be compared. We have hundreds if not thousands of additional expenses per month, revenue is capped to stay safe and social distance, so to achieve more revenue will cost more pay so profits are substantially lower if we are even 20% lower in revenue.” - Ron
“Auditors already had lifetime job security - now their children may be working on reviews and audits of submissions. I understand the desire to be more reasonable with amounts being handed out BUT it takes a bean counter to decipher the information and do the calculations. For each company we work with we will be doing two calculations to determine which one is to the client’s advantage. That means we have to complete two data sets, albeit there are some duplications. At some point the gravy train has to stop. I’m not sure the extension was necessary, but it is what we have to work with now.” - Doris Woodman-McMillan
“Complicated, yes. Fairness, yes. Meets the objective - yes. No doubt the intricacies of the mathematical calculations involved in deriving the end result defeats the simplicity purpose but if we put 5 different businesses with the CEWS Claims, it will be appreciated that they got their value as to the losses they incurred. No more “get nothing” but “get something”. If that’s what it is to make everyone pleased, may be but for sure I agree on the fact that businesses will pay a cost for it to their accountant. Hopefully other comments become true with enhanced calculator present from CRA.” - Suresh Madaan
“Practically, every complexity was a response to business community feedback in the consultation process. Fairness is seldom simple, and simplicity tends to be unfair. The real problem, in my view, is the need for a clean, easy user interface between the businesses needing to file a claim and the spaghetti code of tax legislation drafted under severe time constraints.” - Hugh Neilson
“I understand the need to wean businesses off the benefit, but it would have been sufficient to either lower the base or have a revenue-based reduction. Combining the two, with the additional severe loss top off makes it unnecessarily complicated.” - Dovid Lando
“Yes, yes and yes ... this was supposed to make life easier for small business ... it appears to just be a way to keep accountants busy. Many small business owners will now have to pay an accountant to track and advise them.” - Jennifer Walker
And the last word goes to. . .
“May be a good year for this accountant to retire!” - Minna
We thank everyone for weighing in. Please join us again for this month’s poll question: “Should Canada have a minimum Basic Income in place for all Canadians?”
Additional educational resources: For more information on pandemic benefit program updates, extended filing deadlines and their financial fallout, including the complex auditing process that still lies ahead, attend to the September 30 Virtual CE Summit.
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