April 12, 2021
by David Chong Yen, CPA, CA, CFP, Louise Wong, CPA, CA, TEP, Basil Nicastri, CPA, CA and Eugene Chu, CPA, CA
It’s been over a year since COVID-19 shutdown the world. The closures left many dentists uncertain about their future and finances. In response, the government introduced several financial vaccines, including the Canada Emergency Business Account (CEBA), Canada Emergency Commercial Rent Assistance (CECRA), Canada Emergency Recovery Benefit (CERB) and the Canada Emergency Wage Subsidy (CEWS). A recent survey administered by the Oral Health Group found that more than 90% of dentists found the CEWS to be helpful. Here’s why:
Preserved the goodwill. Staff are a huge part of a practice’s goodwill. During COVID-19, we found the number one issue dentists were facing was a labour shortage. CEWS provided an incentive for staff to return to work. You could give your staff a raise and offer them more money than sitting at home collecting CERB.
Timely. Initially, CEWS provided a payout of up to 75% of employee’s wages, to a maximum of $847 per week to those that qualified. CEWS cheques totalling tens of thousands were not uncommon for dental practices during the initial months of reopening. This gave practices a boost when it needed it the most. CEWS benefits have since been substantially reduced and taxes will have to be paid on CEWS payouts, but practices are also now on more sure footing.
Flexible. The CEWS doesn’t have onerous eligibility requirements. They wanted businesses to qualify. Some examples include:
Longevity. CEWS has been extended until June 5, 2021. The program will have lasted at least 14 months. What was initially a program meant to end in August 2020 has been there to support businesses throughout the pandemic.
Compared to the other programs, we can see why more than 90% of dentists found CEWS helpful. CEBA provided an interest free loan, but extra money sitting in the bank account was not going to get your business back on its feet. CERB payments gave some financial relief, but it made it harder to convince staff to return to work. If your landlord applied, CECRA provided cheaper rent, but cheap rent doesn’t get staff and patients back through the doors.
COVID-19 reminded us that the team should be viewed as an asset not an expense. CEWS enabled us to enhance the practice’s most important asset at a lower cost.
This article was prepared by David Chong Yen*, CPA, CA, CFP, Louise Wong*, CPA, CA, TEP, Basil Nicastri*, CPA, CA and Eugene Chu, CPA, CA of DCY Professional Corporation Chartered Professional Accountants who are tax specialists* and have been advising dentists for decades. Additional information can be obtained by phone (416) 510-8888, fax (416) 510-2699, or e-mail email@example.com / firstname.lastname@example.org / email@example.com / firstname.lastname@example.org . Visit our website at www.dcy.ca. This article is intended to present tax saving and planning ideas and is not intended to replace professional advice.
As seen in the print issue of Oral Health April 2021