The Year to Forget and What We Are Hoping 2021 Will Bring - CCG Personal Wealth Management
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FORESIGHT
B Y T H E C O R P O R AT E C O N C E P T G R O U P
Issue 56 – January 2021
2020, The Year to Forget and What
We Are Hoping 2021 Will Bring
2020, will be remembered as a year that most people would like to
forget. Since, 2020 has been a steady flow of negative covid news,
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2
2020, The Year to Forget and What We Are Hoping 2021 Will Bring
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I’m going to highlight some of the positive things that happened in 2020:
•• Biden wins the U.S. presidency and promises to re-unite America.
•• People had more family time and many added a four-legged addition to their family.
•• Better health became a priority.
•• In July, Professor Kristen Radford in Australia reported preclinical laboratory studies of a new cancer
vaccine that could be used to treat blood cancers… plus solid malignancies including breast, lung,
renal, ovarian, and pancreatic cancers, and glioblastoma.
•• The IEA expects an 8% decrease in global carbon dioxide emissions for 2020.
•• Covid vaccines developed in record time and distribution started in December 2020.
•• Developments in telemedicine and e-health have been accelerated.
•• Remote working may become a permanent part of many employees work life, which should lead to
better work life balance.
•• Top 5 Google Searches in Canada for 2020:
1) U.S. Election 2) Coronavirus, 3) Kobe Bryant, 4) Zoom, 5) Raptors
2021 will hopefully bring the re-scheduled Summer Olympics in Tokyo
and the World Expo in Dubai.
Here are some projections regarding covid in 2021:
•• More vaccines will be coming in 2021. As I am writing this in December 2020, Oxford University/
Astra-Zeneca, Johnson and Johnson and Novavax all have vaccines that are close to finishing up stage
3 trials. According to the NY Times Covid-19 Vaccine Tracker there are another 18 vaccines in stage 3
and 19 in stage 2.
•• Prime Minister Trudeau is predicting that by the end of September 2021 all Canadians who want a
shot will be vaccinated.
•• Management consultant; McKinsey is projecting that the U.S. could reach herd immunity (65-70% of
population protected) by as early as the 3rd quarter of 2021.
•• Also, there are 3 home covid tests approved for use in the U.S., so expect some to be approved in
Canada in 2021.
Linkedin has an interesting article called: “24 Big Ideas that will change our world in 2021”.
Here are what I considered the top 3:
1. The Remote Classroom will get a much-needed upgrade. Tools main idea? City dwellers should have everything they need (work,
like Engageli are being developed specifically for the classroom. bars, restaurants, shops, schools, healthcare, leisure) within a
One key idea: making it easy for students to “sit” together at tables of 15-minute trip — on foot or bike — from home.
two to eight learners, while an instructor’s lesson unfolds. Students
3. For many workers, the 9-to-5 will become a 3-2-2. Companies
can confer with table-mates without being heard by the larger group.
may let employees work from home two or more days per week,
Meanwhile, the instructor can explain things to all the tables at once,
with some opting for three days in office, two days remote and then
while still being able to visit specific tables to make sure everything
two days off — a 3-2-2 work week, if you will — according to Ashley
is on track.
Whillans, a professor at Harvard Business School.
2. The Blueprint of cities will be altered. The pandemic will change
the face of cities, remodeling them in ways that will make urban Whatever 2021 brings, it has to be better than 2020.
life more sustainable. Mayors from all over the world have put the
- By Russell Nagano
launch of “15-minute cities” at the heart of their recovery plans. The
*sources: CNN, The Economist, McKinsey, NY Times, CBC, Linkedin
3
HIGHLIGHTS FROM THE 2020
FALL ECONOMIC STATEMENT
The Federal government released their Fall Economic There were new spending initiatives to help people through the
pandemic and beyond, and of course new sources of government tax
Statement on November 30, 2020. The 223-page document
revenue have been established to pay for the programs. My article
is titled, Supporting Canadians and Fighting COVID-19. highlights some of the notable parts of the paper.
Programs to Help Canadians
Business Supports Canada-wide Early Learning and Child Care System
The Canada Emergency Wage Subsidy, Canada Emergency Rent Sub- The Fall Economic Statement announced early investments to lay the ground-
sidy, and Lockdown Support have all been extended until at least March work for a Canada-wide childcare system, in partnership with provinces, ter-
13, 2021. These are programs to help keep businesses running and people ritories and Indigenous peoples.
employed, despite diminished revenues.
Budget 2021 will lay out the plan to provide affordable, accessible, and inclu-
Simplifying Home Office Expense Deductions sive childcare from coast to coast. The plan will also include enhanced sup-
port for before- and after-school care for older children to provide parents with
Canada Revenue Agency (CRA), will allow employees working from home flexibility to balance work and family.
in 2020 due to COVID-19 with modest expenses to claim up to $400, based
on the amount of time working from home, without the need to track detailed Interest on Canada Student Loans and Canada Apprentice Loans
expenses, and will generally not request that people provide a signed form
from their employers. This will help people cover costs such as office furni- To ease student debt during the economic recovery, the government intends
ture, Internet, etc., that will help them work more comfortably and efficiently to eliminate the interest on repayment of the federal portion of the Canada
from home. Student Loans and Canada Apprentice Loans for 2021-22.
Support for Families with Children Long Term Care
Middle- and low-income families will get up to $1,200 for each child under The pandemic has certainly put a microscope on the deficiencies in the Long-
the age of 6 in 2021. Families that qualify for the Canada Child Benefit and Term Care system across the country. The federal government announced it
earn a net income of $120,000 or less will get the money in four tax-free is committing up to $1 billion for a Safe Long-Term Care Fund, to help prov-
payments of $300 each. Families that earn a net income above $120,000 inces and territories protect people in long-term care and support infection
would be entitled to half the payment lower income families receive. prevention and control.
Generating Revenue for Government Programs and Expenditures
How do we pay for all the additional spending? The answer is, new rates. There are, however, some targeted tax initiatives. Here is a summary
sources of tax revenue and fortifying the collection of existing taxes. of some of the proposed changes to increase government revenues.
Some good news, there were no changes to personal or corporate tax
Changes to Employee Stock Options Cracking Down on Tax Compliance
A $200,000 annual limit will apply on employee stock option grants that can Since the Budget in 2016, the government has committed $350 million per
qualify for the employee stock option deduction. This limit will be based on year on an ongoing basis for Canada Revenue Agency (CRA) to combat
the fair market value of the shares underlying the options, at the time the tax evasion and aggressive tax avoidance (i.e. offshore tax evasion and the
options are granted. underground economy).
Employee stock options granted by Canadian-controlled private corpora- This paper proposes an additional $606 million over 5 years starting in
tions (CCPCs) will not be subject to the new limit. This is key, as start-ups 2021-22, to allow the CRA to hire additional offshore focused auditors to
will not be impacted by this change. In recognition of the fact that some non- focus on this segment of the population. Additionally, the government in-
CCPCs could be start-ups, emerging or scale-up companies, non CCPC tends to modernize Canada’s anti-avoidance rules which seeks to address
employers with annual gross revenues of $500 million or less, will not be sophisticated and aggressive tax planning.
subject to the new limit either.
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Taxation of Cross Border Digital Products and Services Tax on Canadian Housing Owned by Foreign Non-Resident Owners
Under current rules, foreign-based digital businesses (i.e. mobile Speculative demand from foreign, non-resident investors will be
apps, online video gaming, video and music streaming, etc.) with targeted. Steps will be taken to implement a national, tax-based
no physical presence in Canada can sell their goods and services measure targeting the unproductive use of domestic housing that is
without charging Sales Tax (GST/HST). This puts Canadian vendors owned by non-resident, non-Canadians (i.e. those who use Canada as
of digital products at a disadvantage. a place to passively store their wealth in housing).
To combat this, the government is proposing foreign-based vendors Taxation of Short-Term Accommodation through Digital Platforms
of digital products and services be required to register for, collect and
remit the GST/HST on their taxable sales to Canadian consumers. Many are now using digital platforms like airbnb for renting out
their residences, or other residential property, for short-term
Canadians also often purchase digital products or services through periods. Currently collection of GST/HST is sporadic which puts
digital marketplace platforms (e.g., “app stores”). To ensure that the traditional Canadian accommodation providers like hotels at a
GST/HST applies equally to these sales, the government proposes comparative disadvantage.
that digital marketplace platforms be required to register for the
GST/HST, and to collect and remit the tax on the sale of digital The government proposes to apply GST/HST to all platform-based
products or services of foreign-based vendors to Canadians that the (like airbnb) short-term rental accommodation supplied in Canada.
platform facilitates. The GST/HST will be required to be collected and remitted – by
either the property owner, or the digital accommodation platform – on
short-term accommodation that is supplied in Canada through a digital
accommodation platform.
The pandemic has prompted the government to implement They are proposing some interesting ways to generate
several programs to assist Canadians during a difficult additional taxes to pay for the pandemic measures.
economic time. The Fall Economic Statement has outlined the
programs as well as proposed measures to try to pay for them. - By Scott Goddard
Source: Government of Canada
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Scott Goddard Hons.B.A., CFP
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s.goddard@ccgpersonalwealth.com value per security at a constant amount or that the full amount of your
investment in the fund will be returned to you. Fund values change
Russell Nagano B.Comm, CFP
frequently and past performance may not be repeated.
r.nagano@ccgpwm.onmicrosoft.com
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