April Showers Bring May Flowers
Historically, April has had less than ideal weather. That being said, clouds have silver linings. For April this implies that precipitation today gives way to verdant growth, warmer days and cheery gardens buzzing with life and beauty. We see a parallel in our current circumstance as society comes to terms with a socioeconomically soggy springtime. The White House has announced that many of their country’s restrictions will remain in place until the end of April. Trudeau has hinted at the same. Realistically, we would not be surprised to see these dates pushed out even further. We view these measures as necessary to control the virus and we’re thankful society is showing signs of solidarity that we have not seen in decades. The tradeoff will be a restrictive April for a brighter May. It’s time to stay safe at home with good books and warm beverages. We encourage you to call or video chat with your friends and loved ones. Stay connected with one another and look forward with us to May’s flowers.
The recent buzz with the bees:
- Pet adoption rates have been spiking across the continent as furry friends are welcomed to the family. The BC SPCA noted 100 adoptions in 2 days.
- With the reduction in traffic, air pollution in at least four major Canadian cities is visibly improving.
- Home baking is taking the world by storm. While flour may be harder to find at the store, Canada has no shortage of wheat and we are assured that there is plenty more coming soon. CNN recently had a slideshow of some creative CoViD-19 baking that’s sure to leaven the mood.
- The Vancouver Art Gallery and Royal BC Museum recently launched free digital activities for the whole family.
- UBC Science has collected a list of online science education programs and activities for any housebound kids in your lives.
- McSweeny’s has posted a reimagined storyline of the children’s classic, Frog & Toad, in the CoViD-19 era.
- J.K Rowling has launched an online hub of Harry Potter at Home
Our Thoughts on the Markets
The markets are continuing to search for a rhythm with daily swings between positive and negative headlines. Research firms and economists have projected multiple recovery scenarios and have come up with a wide range of possibilities. Governments around the world continued to announce additional stimulus measures. Trump has hinted at an additional $2 trillion USD infrastructure spending bill to follow the recently approved relief bill. We note that the support goes far beyond the Wall St. bailout of 2008, extending all the way to Main St. The actions of the Federal Reserve have calmed the bond market and liquidity is returning to many asset classes.
We anticipate continued volatility for the coming days as there are still many hurdles left to jump over before the economy can reopen. The medical news flow over the next few weeks will be very negative, as will the economic data points. While markets tend to look beyond the immediate, it’s hard to imagine a sustained rally taking hold until the uncertainty surrounding the path forward becomes less foggy. There is still a great deal of uncertainty around delayed/missed earnings combined with unknown restart dates for many businesses. Most industries that require person-to-person interactions are paused. Many of the service-related industries that have stayed open have seen reduction in business. There is no modern precedent on which to model economic forecasts. Having said all that, there are some green shoots starting to take hold. Many studies are already underway to develop a vaccine to prevent the disease, as well as drug studies to treat those afflicted. Manufacturing companies have retooled to focus on producing much needed medical supplies and ventilators. Essential service industries are hiring displaced workers. Governments are responding with never before seen levels of monetary and fiscal stimulus.
We spend a lot of time discussing the importance of a long-term investment strategy that is grounded to your financial plan. This becomes our roadmap whether times are good or bad. As a basic premise: markets tend to rise more than they fall. The global economy has expanded over time. While we continue to wade through uncertainty, both economically and health wise, human resilience and ingenuity will not be broken.
Some good news from closer to home, we’ve seen a plateau emerge from our active cases here in BC. With any luck, our apparent successes can be mirrored across the continent. Testing continues to become more accurate and more widespread. Vaccine and treatment research improves with every new result that comes in. As we progress through these unprecedented times together, remember that we are here for you. We will work with you to revisit financial plans and strategize on adjustments to help you navigate forward through these difficult times. If you have any questions please let us know. With each day that passes we are one day closer to returning to normalcy.
Nevin, Tom, Karen, Jack & Rob
Scammers are (still) also working-from-home!
Based on the interest from our previous post, we wanted to expand on the resources covering the current scams and fraudulent schemes being reported around the country. Remember, many organizations will not send you a link to click on! Most financial institutions, including our own, will simply notify you to log in to your secure portal to access the document or request.
Here is a list of high-risk interactions and recently reported scams.
Many phishing attempts are coming in by text message. We urge extreme caution when a text arrives from a number not in your contact list that contains a link. If any website or survey asks you for personal information or login credentials, pause and double check the address.
If you ever have a concern, take a moment and verify. Remember to look for the padlock in your address bar!
Update: Support for Businesses and Individuals
BC Update: The Province has announced changes to BC Hydro to support businesses and individuals
- BC Hydro rates will drop by 1% for all customers
- Residential customers who have had job or wage disruption will receive a 3-month bill credit
- Small businesses that have been forced to close will have April-June bills forgiven
- Large businesses may apply for a three-month deferment
COVID-19 is fundamentally a public health issue that is impacting all Canadian families, some more directly as individuals fall ill. The economic impact on individuals and throughout the business community is also being widely felt and has prompted the federal government to announce additional emergency support measures. This content is intended to provide Business Owners with high-level details on the new measures.
The pandemic situation continues to move quickly, and some of the details here may fall out of date. This content reflects our understanding as of March 30, 2020. You can refer to the Government of Canada website for further information.
Here is a summary:
Canada Emergency Wage Subsidy (CEWS)
This replaces the Temporary Wage Subsidy for Employers of 10% previously announced. If businesses show that their revenues have decreased by at least 30% due to COVID-19, they will be eligible for the CEWS. This subsidy will apply to businesses of all sizes, as well as non-profit organizations and charities. Notably, the number of employees in the business is irrelevant in determining eligibility.
Employers who are eligible for the CEWS will have 75% of their employees’ salaries covered by the government. Per employee, the 75% subsidy will apply to the first $58,700 of salary. This works out to $847 per week. Employers are encouraged to top up employee wages that are not covered by the CEWS. The CEWS will be backdated to March 15, 2020.
Please refer to the Government of Canada website for additional details that the government is expected to provide in the near future. Outstanding questions on the CEWS include, but are not limited to, the following:
- Whether unincorporated businesses such as proprietorships and partnerships are eligible to apply
- Whether there is a total cap on the subsidy per employer
- How employers can access the subsidy
- When the subsidy will be provided
- Whether a verification process is required to access the CEWS. There will be “serious consequences” for businesses that attempt to abuse the CEWS.
Canada Emergency Response Benefit (CERB)
The CERB, which provides a taxable benefit of $2,000 a month for up to 4 months for individuals who are unable to work due to COVID-19, lost their jobs, or are not eligible for EI, will continue to be available. The CERB is available from March 15, 2020 until October 3, 2020.
The government will make the application for the CERB available on its website in early April. Workers can also apply via phone. CERB payments are expected to be made around 10 days after application.
Canada Emergency Business Account (CEBA)
The CEBA will provide loans of up to $40,000 to qualifying small businesses and non-profit organizations. These businesses will have to verify that they paid between $50,000 to $1 million in total payroll in 2019 to qualify. Other key details include the following: The CEBA is interest-free for the first year; Up to 25% ($10,000) of the loan may be forgivable under certain conditions; The CEBA will be provided through financial institutions. The government has announced that it will provide more information on the CEBA in the weeks after March 27, 2020.
Deferral of GST/HST payments
Businesses, included self-employed individuals, are now able to defer GST and HST payments until June 30, 2020. It is unclear whether this deferral extends to the actual filing of the GST and HST returns.
Income tax filing deadlines and payment due dates
The CRA has published the following schedule summarizing revised due dates for income tax filings and payments. We recommend that you check this page if further changes to due dates are announced.
Government of Canada website
We want to hear from you!
It is more important than ever that we stay connected to support each other while we follow the public health guidelines and stay safe at home. We wanted to share some of our personal moments from the past few weeks. We encourage you to send us an update on what has kept you busy during these unprecedented times and let us know how you’re doing. Here’s a snapshot from each of us:
Nevin has been busy organizing his extensive collection of travel photos and sharing one per day. His latest post: this beautiful shot from Kinkiaku-ji in Kyoto, Japan from 2008.
Tom has turned work-from-home into work-from-island as he puts the finishing touches on his Salt Spring hideaway with the company of his pup Luna (seen here sitting by Tom's favorite lookout).
Rob has taken a keen interest in bread making over the past few weeks and recently baked up these naturally leavened country style loaves.
Jack has been busy at work in his garden with his family. He recently started a number of seeds to get a head start on his veggies for when the weather warms up.
Karen has been teaching her daughter how a guard dog can help with social distancing practices.
Chernick & Associates Wealth Management Group
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Vancouver, BC V6E 2E9
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