House Call with Carol Hughes

An about face on some CERB repayments and a temporary tax credit for working from home

Last week I wrote about how the government was set to claw back CERB payments from some Canadians including those self-employed who applied for the program in good faith. This was happening after rules had been changed mid-stream, making it appear the government couldn’t see the folly of their move.

While most people had applied for the program with the understanding that it was applicable for their circumstances, often after confirming they were eligible with the Canada Revenue Agency (CRA), the government was on a path to treat them as if they had somehow cheated the program.

To make matters worse, there seemed to be an element of picking winners and losers based on the outcomes from differing pandemic relief programs. While the wage subsidy (CEWS) was flowing to employers, even for those who paid out dividends to investors, the clawback on the self-employed hinted that Canada may not value their economic contribution in the same way it does that of employers. It also didn’t help that many of those worrying about paying back the CERB were made aware of the possibility of that by mail over the holiday season and being asked to repay by December 31, 2020.

Now, the government has listened to reasoned arguments and backtracked, announcing that people who accessed CERB based on their gross income instead of net income, if they met the other eligibility criteria, will not have to return their CERB payments. Similarly, self-employed Canadians who applied for CERB, and who would have qualified based on their gross income, will no longer be required to repay, provided they also met all the other eligibility requirements. It is worth noting this policy applies regardless of whether applicants accessed CERB through the CRA or through Service Canada. Those who meet these conditions and have already voluntarily repaid their CERB will have that money returned.

While the about-face is an important development, it isn’t unfair to note that it comes months late and has placed families in a stressful situation, in an already difficult time. Also, it was out of touch for the government to have threatened people who received the wrong information about them to pay back as much as $14,000 during the holiday season. There were individuals looking at selling off assets to be able to raise that kind of money. We cannot forget that before the pandemic, 46 percent of Canadians were $200 away from debt.

Mercifully, over the last year, New Democrats have successfully negotiated and improved key elements of the government’s pandemic response. Part of that is a feature of a minority parliament where negotiations are needed to maintain confidence, and part of that is related to the fact that we are all experiencing this unusual event for the first time—together. It’s been described as building an airplane as you fly it. Throughout the process, New Democrats have suggested many ways that programs could be improved and implemented with good results. This CERB adjustment is just another example of that and is something that Canadians can be proud of, especially when compared to other jurisdictions that haven’t fared as well when it comes to political co-operation. That said, we will continue to advocate waiving CERB repayments for people with low incomes and for youth aging out of care.

Finally, there is a new, temporary tax credit for individuals who found themselves working from home during the pandemic. It allows eligible employees to claim a deduction of $2 for each day they worked from home over a period of at least four consecutive weeks in 2020, plus any other days they worked from home up to a maximum of $400. There are many costs associated with working from home and hopefully this credit will help with some of those.