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URGENT NEED IN SOUTH ASIA (Primarily India, Pakistan & Bangladesh) to fight COVID. . You can also contribute by sharing this!

With reference to my earlier posting that I am joining the Federal Conservatives as a card carrying member, one of the reasons I gave is that I was extremely un...happy with how the Liberals dealt with the Pandemic Relief package and its extremely adverse effects on the debt scenario of the country. Here is my more detailed logic. - The Pandemic relief package will cost about $ 350 billion. - Of this, abt. 90 billion will go towards the CERB (the $ 2000 per month Relief). - CERB has become the come the worst ever boo-boo in history by a Canadian Govt. - Of the $ 350 billion package, over 25% is spent on CERB. It would have about half if the NDP HAD NOT BLACKED - MAILED the govt. to extend the payments. Being a minority Govt., Trudeau fell for it but shame on Jagmeet and his team. - CERB program is equivalent to organized crime. There are about 8.5 million recipients, while the Unemployment Claims reported ARE LESS THAN HALF. So there is potentially abt. 4.5 million FALSE CLAIMS. - We should demand a thorough investigation of the claims immediately. Eventually all this money will come out of the tax payer's pocket and the false claim recipients probably pay No or very Minimal Taxes.The total of up to $ 12,000 they got from CERB is more than double of what they have ever earned in a year when they worked, if they worked. - As far as the debt of $ 1 trillion+ I referred to, the better indicator id the the Debt to GDP ratio. Before the package, Canada had the lowest (best) ratio of 32% among the G7 countries. With GDP going down and the $ 350 billion new debt, the ratio is expected to be close to 50% - One of the World's largest Credit Rating Agency (FITCH) has already announced that Canada is close to loosing its AAA credit rating due to the high debt. Which will eventually mean higher borrowing costs for Canada. - There were much better ways to develop a Relief Package and which I will discuss in my next posting.

After much thought, I have become a card carrying member of the Federal Conservatives. The Federal NDP is really not worth talking about, while the Federal Liberals and Trudeau will make Canada a heavy indebted nation. We have already crossed the $ 1 trillion mark.

FOR COMPANIES -WAGE SUBSIDY There are 2 wage subsidy programs announced by the Canadian Govt. under the COVID-19 Package. The first is called the Temporary Wag...e Subsidy. This gives you a 10% subsidy on the Gross payroll of the company for the period 18th March to June 19th, 2020.This is a Manual calculation and the March and June salaries also have to be pro-rated. There are some limitations: (a) For the period you can not claim more than $ 1375 per employee, and (b) a Maximum of $ 25K for the company for the above period, but NO SALES conditions. ALL companies with a payroll (RP account) can claim this. You claim this very simply by reducing your CRA remittance amount for the month by the subsidy amount. However, it can be applied ONLY against the tax deductions portion of your remittance amount (NOT CPP or EI portions). Associated companies are NOT REQUIRED to share the limit, as is required in the small business deduction. OR 2) If your sales has dropped 30%* or more, than you can apply for a 75% wage subsidy. This is called the Canada Emergency Wage Subsidy. It can be presently claimed for the period of March 15th to June 6th, 2020. March and June salaries would have to be prorated, as in the first case. This subsidy has no limit for the employer (like the $ 25K in the first case).However, the 75% would apply to only the first $ 58,700/year earned by an employee.One acceptable calculation for the 30% drop in sales is by comparing March 2020 sales with March 2019 sales. You can also do the same for April and May sales. This effectively means that if you do not qualify in one month, you can in the other(s). * Like the first case, ANY company (with a RP account) can apply.This will be an on-line application. The employers entitlement to this subsidy will be based entirely on salary actually paid to the the employee. The govt. is accepting that employers may for this period, based on above, reduce salaries to the 75% level and has thus said that they would expect employers to at least make best efforts to top up salaries to 100% of the maximum wages covered. Based on the $ 58,700, the maximum benefit you can get per employee is $ 847 per week and there is NO Restriction on the number of employees. This is quite significant. ARE THERE ANY OTHER BENEFITS FOR CORPORATIONS? YES, but none are really adding to your bottom line. They are designed to ease cash flow and provide more credit to the companies. I will summarize that for you in my next posting. NOTE: In any particular month you can only claim one subsidy. * See my later date posting on change in rules for calculating sales drop. Rauf Kadri CPA.CA, Registered Financial Adviser, LL.B. (UK)

MY CRYSTAL BALL The Corona virus shall come to pass, unless it is Armageddon (end of the world). But what will take many years to heal will be the global econom...y including Canada. It is obvious we are in a recession, although the official definition is 2 consecutive quarters of negative GDP growth. I am worried about a depression. There is no ‘official’ definition of a depression but from previous depressions we can learn what happens. The most common factors are(a) sustained and deep recession. GDP goes down around 10%, and (b) unemployment rises to over 20%. It then takes many years to recover. The PM yesterday announced that to date 500,000 applications were received for EI. In the Same period last year it was 27,000. In the coming weeks I see this figure easily cross 2 million. I also see weaker financial institutions crashing globally including Canada. Stock markets are in an official BEAR run - defined as 20% fall from their peak. A new world economic order is seen in my crystal ball. In my next posting I shall speak of our place in the new order. See more