Heads up, Canadians: Due to the COVID-19 pandemic, this is going to be a tax season like no other.
If you collected COVID-19-related benefit payments last year, you might end up owing more money than in previous years. However, if you spent part of 2020 working from home, you could wind up with a bigger tax refund than usual.
Here’s what you need to know about filing your taxes this season, including important deadlines.
Has the deadline been extended?
Despite this being a more complex tax season, the Canada Revenue Agency (CRA) has not extended the tax filing deadline. The due date is still April 30 for most Canadians, and June 15 for self-employed people.
To avoid interest charges, Canadians need to pay any taxes owed by April 30. However, not everyone has to comply with that rule this year.
Those who had a total taxable income of $75,000 or less and received one or more of the COVID-19 benefits listed below don’t have to pay their taxes until April 30, 2022.
Eligible benefits:
Canada emergency response benefit (CERB).
Canada emergency student benefit (CESB).
Canada recovery benefit (CRB).
Canada recovery caregiving benefit (CRCB).
Canada recovery sickness benefit (CRSB).
Employment Insurance benefits.
Similar provincial emergency benefits.
Qualifying Canadians “will have that full year after the filing deadline of April 30th [2021]” to pay any tax debt without facing interest charges, said Francesco Sorbara, Parliamentary Secretary to the Minister of National Revenue.
Those who qualify for the payment deferral still need to file on time if they owe taxes — or they’ll face a late-filing penalty.
Will I owe taxes on my government benefits?
The benefits listed above are considered taxable income, so the federal government introduced the tax-payment deferral to help out the many Canadians who will have to pay taxes on their benefit payments.
“[Many] lost jobs and collected benefits, and they may have some amounts owing,” said Sorbara. “We’re giving some flexibility there.”
WATCH | CRA prepares for a complicated tax season:
From job losses to recovery benefits, this tax season is expected to be complicated and the Canada Revenue Agency is hiring 2,000 people to help field questions. 1:53
The government didn’t withhold any taxes on CERB and CESB benefit payments Canadians received in 2020.
It did withhold a 10 per cent tax for people who received CRB, CRCB and CRSB benefits, but tax expert Jamie Golombek said many of those individuals will still owe the government money, as most Canadians’ income is taxed at a much higher rate than 10 per cent.
“For many people, [10 per cent is] not going to be enough, particularly for those who had other sources of income throughout the year,” said Golombek, managing director of tax and estate planning at CIBC.
“You may actually find out for the first time ever in your life that you actually owe some taxes.”
Working from home? Claim your cash
Due to the pandemic, many Canadians worked from home for part of 2020, which means they may be eligible for a home office expenses tax deduction.
To qualify, you must have worked from home more than 50 per cent of the time for at least four consecutive weeks last year.
There are two options for Canadians claiming home office expenses. The first is the detailed method, which involves calculating what percentage of your household costs — such as hydro, rent and internet — can be applied to your home office space. Also, you’re required to save all relevant receipts.
If that sounds like too much work, don’t fret. To simplify the process for people who worked from home for the first time in 2020, the CRA has introduced a new, temporary flat rate method. It allows employees to claim a tax deduction of $2 for each day they worked from home, up to a maximum of $400.
“We’ve kept it simple. They can file it without filing any documentation, any forms,” said Sorbara.
Software designer Pat Suwalski is seen working from his desk at home in Nepean, Ont. (Pat Suwalski)
Software developer Pat Suwalski of Nepean, Ont., has been mainly working from home since April 2020. He filed his taxes on Wednesday using the flat rate method and said it took him just minutes to calculate his deduction.
“I’m a pretty honest guy, so I took a calendar and I started counting [work] days,” he said.
Suwalski counted 188 work-from-home days last year. Multiply that by $2 a day and he gets a tax deduction of $376.
“I’ll take it,” he said. “It’s great that they made [the process] simpler.”
Which method should you choose if you worked from home this year? Golombek said the flat rate method may be the best option if you’re a homeowner, because it’s easier and chances are you’ll come out ahead.
That’s because mortgage payments — typically a homeowner’s biggest monthly bill — can’t be claimed as a home office expense.
“Our experience is that homeowners, typically speaking, don’t have enough expenses … to beat the $2-a-day method,” Golombek said.
While homeowners can’t claim their mortgage payments, renters can claim a portion of their rent based on the size of their home office space compared to their entire home. As a result, Golombek says they may reap bigger rewards by choosing the detailed method.
“Depending on [what] percentage of their home they’re using, [renters] typically would probably come out ahead on the detailed method.”
Digital tax credit
Golombek also points out one of the new wrinkles this tax season, which is that the government is offering a tax credit to people who subscribed to digital news services in 2020.
Canadians can claim up to $500 for subscriptions to qualifying Canadian media, such as newspapers, magazines, websites and podcasts, that don’t have a broadcast licence and offer primarily original news content.
“I call it a bit of a fun new credit,” Golombek said.
The CRA told CBC News it will post a list of eligible subscriptions on its website in March and that it will only include organizations that wish to have the information publicly posted.
If you still have questions about your taxes, you can call the CRA tax information line at 1-800-959-8281. The agency said it has beefed up resources at its call centre, as it anticipates higher than normal call volumes this tax season.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
