Abuse of the Canada Emergency Wage Subsidy (CEWS).

Another one of the Village Idiot's ideas with no checks and balances...and cost the taxpayers $Billions. And this doesn't include privately owned bushiness's, this is just corporations !!!

Quote:

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Canada Revenue Agency (CRA) is launching a website to help Canadians track which employers have been using government wage subsidies during the COVID-19 pandemic.

The CRA says its Canada Emergency Wage Subsidy (CEWS) Registry website is part of a push for transparency around the government program, which as of last week included payments to 368,000 businesses and non-profits.

For privacy reasons, the agency says the public registry does not include sole proprietors.

The move comes after news reports showed many large businesses paid out dividends to shareholders this year while collecting the wage subsidy.

According to an investigation by the Financial Post, 68 publicly traded Canadian companies received $1.03 billion in wage subsidies over a six-month period this year, while paying out more than $5 billion in dividends to shareholders.

Of 53 businesses that CBC News looked at, more than half were found to have paid out dividends to shareholders while collecting the wage subsidy.

The CRA’s announcement notes that it has a separate webpage called CRA Leads for people to report businesses who wrongfully claimed a subsidy.

The wage subsidies are meant to support employee paychecks at businesses where revenue has dropped, and the CRA says it could make ineligible businesses repay the subsidy plus a penalty, or even imprison fraudsters.

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It’s the proverbial “tip of the iceberg”....

I see Pierre actually confronted the Finance minister on this back in Apr...

https://www.facebook.com/27321532378...99215720360038

I know people who own outlets of a well-known Canadian restaurant franchise who claim they are making more money this year than last year due to CEWS.

Yes there are stories like this turning up everywhere.

People who had shell companies for tax reasons etc prior to the pandemic, small companies where accounting is easily manipulated, many collected the $40K loan and will keep the $10K that was forgiveable.

The ants will always pay for the grasshoppers. Always have, always will.

I wonder how many well connected Liberal Companies have hidden money away Adscam 4.0

It's all about the money,Making more money.
The greed is real over money always will be.

"I just wanna stay broke forever, ya that's the chit noone says lol"

It was bound to happen.

The question is how long can the government keep this up we know the virus isn't going anywhere anytime soon.

I have said it since the beginning of the summer , everyone thinks next year will be so much better. What's going to make it any better the way we are dealing with it?



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Before the discussion around supply chain blew up, consider this.
I'll use the person I know that does all the electrical for Starbucks.

2019.
He would need to use credit to buy trucks, wiring, breakers, lights, panels and more....Go or send a crew to do a store. Cash outlay of tens or hundreds of thousands. He doesnt get paid, until the job is done. Sometimes, some jobs, he's putting tens of thousands and not getting paid for 4-8 months.

He has used every thing he can to stay afloat in 2020.
Obviously I wont disclose numbers. Will just say, I don't know how he's sleeping at night.

Then there's all this stuff, people or companies abusing the bailouts, and more I might mention.

But lets assume, lets live in Utopia for a moment. Ignore all the above.
If he starts having problems sourcing wire, breakers and relays, widgets and gadgets....He's done...As will thousands of other businesses go under...

Me, I've rarely if never wished I could see the future. This last year???
Even if "we" get through the winter, I can foresee something wicked and ugly.

fear and greed.

I saw something like this happening and have said it in the pass, only I was expecting a massive power outage instead. We might still get that yet to.
It is what it is.

I watched a video about the housing crash

The 2008 crash started in 2005 and didn't recover untill 2012.

More people are out of work and more people who deterred their mortgage than in 2008. Only difference now and then is the interest rates . They went up in 2005 while they went down now.

Only thing keeping people alive are lower interest rates . When they go up we are in trouble. The house market is not like the stock market and will take some time for the crash . A year maybe 2 once the demand is gone because of affordability big possiblity of a crash.

Add higher taxes carbon and the cost of living up the threat is a real possibility.


Taxes are going to be a killer next year putting millions in a darker place than they need to be.

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Fishfood. We saw it coming in 2005, 2006.
I don't recall exactly, but somewhere in there, I was told to reduce the companies exposure to Asset Backed Commercial Paper. "Paper" or pools of debt, backed by assets. In the subprime housing world, pools of mortages "secured" by asssets. Regardless, I went from being long over a billion dollars worth, down to 100-200 million.

When it really blew up in Sept of 2008, credit ( liquidity) dried up. Oddly enough, like what might happen when all kinds of widgets and gadgets dry up. Or have to bought from China/Thailand.

There are soooo many moving, related parts to all this. "Who knows"

The companies that are abusing CEWS? All kinds.
What about the loans? How many have borrowed $40,000, put $30,000 under a mattress for the free $10,000
We've discussed people abusing CERB.
Me? How hard would it have been for the government to say..
here you go...But if your houshold income for 2019 was > $x.00......no. Why should a house where between two people they bring in say $150,000......Others need it.
and on and on and on and on....

Basically, I can foresee a perfect storm, where a whole bunch of things....And I strongly suspect getting through the next month or two....lol, please

" Why should a house where between two people they bring in say $150,000......Others need it.
and on and on and on and on...."

You got my vote.

So will some of these businesses have to pay back ?

Surely not all of them took losses or the 30 % to be eligible for the benefit.

We see with the cerb they gave it to them and certainly aren't going to claw it back. Justin said.

Also didn't the government get on board with this program ? At the beginning ?



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Quote:

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Originally Posted by JBen

Basically, I can foresee a perfect storm, where a whole bunch of things....And I strongly suspect getting through the next month or two....lol, please

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Oh it's a big one brewing but noone is paying any attention to it.

I asked someone last week how they were .

The reply good, can't complain because nobody is listening lol.

People think things will bounce right back to normal but it's far from the truth ..so many people are going to be in world of hurt. Some understand it many do not .

Why is it that many people who made a fortune off the real estate market are backing off to invest in other things?

What do they know that we don't ?

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Quote:

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Originally Posted by Gilroy

" Why should a house where between two people they bring in say $150,000......Others need it.
and on and on and on and on...."

You got my vote.

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$150k is a lot of annual salary ... but I'm willing to bet it is exactly that demographic that has the most debt in Canada ... and if you pull the plug on income, you will have a ROYAL disaster in the economy.

I think I've mentioned I am now in financing. Almost, sort of the other side of the equation. My old life, we were trained how to remove emotion from decision. To us, numbers are just that. Numbers.
Working with people now, especially when trying to explain why places won't extend credit to them, or why their rates are so high. Banks dont care about your life, your story, the how or why. All they see are the numbers.

Our "market" is subprime. These days (prior to2020), more than 50% of the population. We get people that are prime as well, but they are in the minority.
I've had "clients" with little income and decent credit resumes, and brutal. I've had clients that make more than $100,000 with brutal credit resumes.
Will say, while a number of things cause inflation, as a general, broad, umbrella type statement. The biggest factor is spending.
Who has the most to spend and the most credit ( that leads to even more spending??)
?????????

Couldn't begin to guess on Real Estate Fishfood. Lots of people are trying to figure that beast out.

one other thing maybe worth mentioning.
In the last couple months the number of people we are seeing with little income, having hard times getting credit is increasing. One of my hardest days was about a month ago. Had a young mother, same age as one of my daughters.

Going through a nasty divorce, 3 young kids. I could hear kids in the background crying, the desperation in her voice. "How am I suppose to prove income, when I lost my job, and cant get a loan, so I can get to a job"....

Not a good day that.

Quote:

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Originally Posted by MarkB

$150k is a lot of annual salary ... but I'm willing to bet it is exactly that demographic that has the most debt in Canada ... and if you pull the plug on income, you will have a ROYAL disaster in the economy.

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Mark I only replied to that because most pensioners are well under half of that amount.

I don't think most pensioners would even get a car loan these days never mind a mortgage as JBEN says its all figures.

Another demographic that is and will get whacked...
We get some approved Gilroy. Depends on specifics, even ODSP as a single source of income can be enough, but, depends on credit resumes, TDS ( debt income ratio)........When you do the math

You would not believe how many people we ( theres 8 of us here) are are currently seeing, that are dead in the water before we pull their credit.
"CERB" doesnt count as income?

And if anyone is curious.
760-900... prime
700-759.....Good
660-712.... Fair
575-659....Average

Point there, is that about 5 years ago. Only about 35% were subprime. By 2019 is was over 50%
2020???????

Quote:

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Originally Posted by JBen

Another demographic that is and will get whacked...
We get some approved Gilroy. Depends on specifics, even ODSP as a single source of income can be enough, but, depends on credit resumes, TDS ( debt income ratio)........When you do the math

You would not believe how many people we ( theres 8 of us here) are currently seeing, that are dead in the water before we pull their credit.
"CERB" doesnt count as income?

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I got to say I am pretty in the dark when it comes credit as I have not used it much. I reduced my credit limit down to 5grand
simply to stop any liability in case my card got compromised. Don't think I have ever asked for a credit score in my life.

Call me some day, I'll walk you through a couple things. One of which is that you could be hurting yourself by reducing limits.

Everyone can request their bureau once a year free. Given this year I suggest it.
They also currently have a couple free things. You wont see all you want to but. Not sure if they still are offering it, but there's also a 30 day trial. Sign up, see a "score" and some other things ( again, not all) ...cancel.
https://www.consumer.equifax.ca/cana...ent=Core_Brand

Quote:

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Originally Posted by JBen

The companies that are abusing CEWS? All kinds.
What about the loans? How many have borrowed $40,000, put $30,000 under a mattress for the free $10,000
We've discussed people abusing CERB.

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I know a bunch of truckers around here that have done that. They are essential worker’s and haven’t lost a days work because of Covid. ????????? What a joke!

Quote:

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Originally Posted by JBen

How many have borrowed $40,000, put $30,000 under a mattress for the free $10,000

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Only a fool would put the money "under a mattress." The smart move is take the $30,000 put it into the market. You've got two years to pay it back. Free $10,000 plus what you make on the investment. :D

Quote:

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Originally Posted by Badenoch

Only a fool would put the money "under a mattress." The smart move is take the $30,000 put it into the market. You've got two years to pay it back. Free $10,000 plus what you make on the investment. :D

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Every bodies situation is different. As is their risk tolerance. Just as two people with near identical credit resumes and incomes. One might get denied, one approved.

$40,000k.
Drop it in a TFSA, invest in one of those banks. Collect Dividends with a yield of about 4% everyone is complaining about. In 2.years your up $14k plus any appreciation.

Drop it in an RSP. Get a tax refund of 30% and a dividend yield of 5%. In two years, use a credit line to pay back 30k....

Thanks for the $29,000 suckers.

If your appetite for risk is greater rather than stable banks, you can use leverage to greatly enhance returns.

Invest in ABCP. Back in the day the yield on those was quite high.

Or maybe. You just drop 10k into two TFSAs. Tax free growth for life.

10k in RESPs and get another $1,500 back from each. There’s a college fund for your fortunate children...

20k into an RSP. Get a refund of about $8,000 ( which can be dropped in a TFSA to pay off the loan) and dividend yield of about $1,000 per year. Plus any capital appreciation

Meanwhile, people that struggle...... Thanks for playing suckers.

fear and greed

I know a few small business owners and the way it was explained to them by their accountants was that it isn't just free money. The money has to be spent on certain things related to the business, you can't just stick 40k in the bank or invest it in the market. It's also my understanding that by accepting the money you also agree to being audited.

Now they don't have the man power to audit everyone so you can basically do whatever you want with the money and take a chance, but I don't think it's free money with no strings attached. It could also end up like CERB and they won't go after any abusers.

Everyone’s situation is different. Everyone is unique unto themselves.

Just as a big company can get CEWs, use the $ to pay employees, rather than revenue from “sales”. Pay dividends or buy back shares........

how many will get audited?

/edit
should have added because your right. But at the very least, $30k “under a mattress”. Free $10k

I think the CEWS is separate program from the 40k for small business program.

Any "free" money from the government should be seen as a trap, unless you are a big time political donor.