Business
CEWS 2.0 – Why I see it as another attack on the small business owner
July 18, 2017 – The Minister of Finance announces draft legislation of the Tax on Split Income (TOSI) rule changes that would have far reaching impact into the small business community and although some changes were made, the rules have negatively impacted small businesses ever since and will continue for years to come.
Three years later, July 17, 2020 – The same Minister of Finance tables legislation of the changes to the Canada Emergency Wage Subsidy (CEWS), what I like to call CEWS 2.0 which will also continue for years to come.
Before you try to correct me and say that the subsidy is only for 2020, please read on.
While many media and politician soundbites like to give the impression of how CEWS 2.0 will help small business, I cannot help but see this as an opposite approach.
Do not get me wrong, money is money, and businesses will take all the help they can get, and if my business qualifies, I will take full advantage of it, but I personally don’t have to pay a tax specialist to figure it out.
There are two new calculations to CEWS 2.0.
- a baseline amount based on the percentage of revenue decline in the month compared to either the same month in 2019, or the January-February 2020 average revenue amount.
- a top-up amount based on the three-previous month revenue decline where it exceeds 50%.
Instead of an all or nothing at a 30% decline, even a 1% decline will get you a pro-rated payout, although the costs of figuring out your eligible amount might outweigh the benefit.
In fact, you could have an increase in revenue compared to this time last year and still get a payout. Make sense?
If the previous three months were greater than a 50% decline you qualify for the top-up amount regardless of the result for the current month.
The complexity of the CEWS design will reward those that have experts in their corner compared to those that do not.
Consider the following scenario:
A large public corporation that has employees making more than $1,129 a week will be able to not only have a simple calculation, they will not have anyone “related” to the corporation that they have to do extra baseline remuneration calculations for. Just like CEWS 1.0, in CEWS 2.0 every employee including the CEO will be subsidized in a public corporation, with no clawback mechanism (as recommended in my earlier article, the Keep it Simple S…ubsidy).
In the large public corporation, the bookkeeping, payroll, and accounting function will be up to date and (I would hope) accurate because of internal controls. They also frequently have large accounting and I.T. departments to easily calculate the eligibility and amounts for such a subsidy.
But let us compare this to a small owner-managed business like a restaurant for example. The profit margins in restaurants are already sliced thinner than the meat on a charcuterie board. Add to this the extra costs of social distancing and safety precautions, as well as the inconsistency of regulations for being closed, re-opened, and closed again as we navigate the pandemic and restaurants seem like a lost cause for a business owner.
Assuming they are able to still successfully navigate the minefield that COVID19 has placed on their livelihoods, many restaurants have dozens of part-time staff, including family members.
So right away we have a glaring difference: relatives.
The rules in CEWS 2.0 has not reduced any of the requirements for calculations to be made with respect to relatives working in the business. Relatives must have been being paid as a wage employee during one of a few optional calculation periods prior to March 15, 2020 to be eligible for any of the CEWS.
Do you remember TOSI?
TOSI basically was designed so you could only income split dividends with related persons under a complex set of strict rules. Even though restaurants are considered “food services”, the Canada Revenue Agency (CRA) and Finance have in Example 4B of their TOSI explanatory notes an example of a restaurant which would not be considered a service. In doing so, they sent the message to continue to pay yourselves in dividends if you run a family owned restaurant.
As a result, family owned restaurants continued to do just that.
Fast forward to 2020 and you now have family members working in a low margin business, with no support for their dividend remuneration under CEWS 1.0 or CEWS 2.0.
Even if the small business owner was one of the lucky fortune tellers that decided to pay themselves wages, they still have to do a baseline calculation (two different ways – weekly or bi-weekly – for each claim period) just to figure out how much they might be able to get.
Keep in mind the bi-weekly periods are the periods that were set by finance, not the period you may already be using for your payroll cutoff.
Now we have the part-time restaurant staff in my example. The family business now must calculate the average weekly earnings of each individual staff member during the claim period to figure out what the maximum amount of benefit is.
To make it better, the bookkeeping records better be pristine and accurate on a month to month basis, rather than on an annual basis like many, if not most, small businesses do.
Enter in that sale on the 1st of this month instead of the 31st of last month, and you could be looked at as “gaming the system”.
If you are a late-night pub restaurant, make sure that you are closing out the tills at 11:59pm on the 31st of the month – or your numbers would be inaccurate and you could be called a “tax cheat.”
I can’t wait for the Halloween pub crawls this year, when the weekly earnings of those late-night pub staff will have to also be cut off at midnight Saturday, October 31st. At least there will be plenty of mask wearing that night.
So, we now have increased the compliance costs for the small restaurants for monthly reporting, weekly payroll calculations, overnight cutoffs on month-ends, and special treatment for relatives of the business.
It doesn’t take a tax specialist, a cost-accounting CPA, or a PhD in mathematics to figure out that this is going to cost more per employee in overhead costs to the small family business in comparison to the large public corporation.
While I am more than happy to receive money from my clients for doing the immense research and calculations that will be required, the fact remains for the small business owner, is all of this extra work and compliance cost worth it in the end?
Sadly, you will not know if it is worth it, until after you have put in the work to calculate it.
If you happen to be one of the lucky ones that qualifies, you will then have to track the amount of CEWS you received for each employee separately.
This is because the CRA in question 29 of their Frequently Asked Questions on CEWS said that there will be a new box at the bottom of the T4 required to be filled in for the amount of CEWS received for that employee.
But what about my earlier statement that CEWS will impact businesses for years to come? With your calculation and compliance is going on until the end of February 2021 with the addition of the T4 box, does it end there?
February 2021 will just be the beginning. This will begin the audits of the CEWS claims (if they have not already started).
Since the CEWS is required to be reported on the 2020 T4 slips filed by the business in February 2021, would it be fair to say that the three-year tax compliance clock only begins at that time?
This means from now until February of 2024 you can expect to have a call from (likely the payroll audit division of) the CRA to take a look at:
- your weekly employee wage calculations;
- the monthly revenue calculations;
- the monthly cut-offs;
- the timing of your invoices;
- the CEWS amounts allocated to individual staff members; and
- the scrutiny of amounts paid to relatives;
All while you have the joy of having an internal debate with yourself on whether to pay your tax specialist to deal with them, or to try and go at it alone and confused.
July 2017 – TOSI
July 2020 – CEWS 2.0
I wonder what July 2023 will bring.
This article was originally published on July 23, 2020.
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Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the founder of CGL Strategic Business & Tax Advisors (CGLtax.ca). Cory is an advocate for small business in his role as Alberta Governor for the Canadian Federation of Independent Business (CFIB); converts legislation into layman terms for fun; and provides Canadian tax advisory services to other CPA firms across Canada; opinions are his own.
Biography of Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr can be found here.
It’s been nearly a year since I last wrote about the CBC. In the intervening months, the Prescott memo on bias at the BBC was released, whose stunning allegations of systemic journalistic malpractice “inspired” multiple senior officials to leave the corporation. Given how the institutional bias driving problems at the BBC is undoubtedly widely shared by CBC employees, I’d be surprised if there weren’t similar flaws embedded inside the stuff we’re being fed here in Canada.
Apparently, besides receiving nearly two billion dollars¹ annually in direct and indirect government funding, CBC also employs around a third of all of Canada’s full time journalists. So taxpayers have a legitimate interest in knowing what we’re getting out of the deal.
Naturally, corporate president Marie-Philippe Bouchard has solemnly denied the existence of any bias in CBC reporting. But I’d be more comfortable seeing some evidence of that with my own eyes. Given that I personally can easily go multiple months without watching any CBC programming or even visiting their website, “my own eyes” will require some creative redefinition.
So this time around I collected the titles and descriptions from nearly 300 stories that were randomly chosen from the CBC Top Stories RSS feed from the first half of 2025. You can view the results for yourself here. I then used AI tools to analyze the data for possible bias (how events are interpreted) and agendas (which events are selected). I also looked for:
- Institutional viewpoint bias
- Public-sector framing
- Cultural-identity prioritization
- Government-source dependency
- Social-progressive emphasis
Here’s what I discovered.
Story Selection Bias
Millions of things happen every day. And many thousands of those might be of interest to Canadians. Naturally, no news publisher has the bandwidth to cover all of them, so deciding which stories to include in anyone’s Top Story feed will involve a lot of filtering. To give us a sense of what filtering standards are used at the CBC, let’s break down coverage by topic.
Of the 300 stories covered by my data, around 30 percent – month after month – focused on Donald Trump and U.S.- Canada relations. Another 12-15 percent related to Gaza and the Israel-Palestine conflict. Domestic politics – including election coverage – took up another 12 percent, Indigenous issues attracted 9 percent, climate and the environment grabbed 8 percent, and gender identity, health-care worker assaults, immigrant suffering, and crime attracted around 4 percent each.
Now here’s a partial list of significant stories from the target time frame (the first half of 2025) that weren’t meaningfully represented in my sample of CBC’s Top Stories:
- Housing affordability crisis barely appears (one of the top voter concerns in actual 2025 polls).
- Immigration levels and labour-market impact.
- Crime-rate increases or policing controversies (unless tied to Indigenous or racialized victims).
- Private-sector investment success stories.
- Any sustained positive coverage of the oil/gas sector (even when prices are high).
- Critical examination of public-sector growth or pension liabilities.
- Chinese interference or CCP influence in Canada (despite ongoing inquiries in real life).
- The rest of the known galaxy (besides Gaza and the U.S.)
Interpretation Bias
There’s an obvious pattern of favoring certain identity narratives. The Indigenous are always framed as victims of historic injustice, Palestinian and Gazan actions are overwhelmingly sympathetic, while anything done by Israelis is “aggression”. Transgender representation in uniformly affirmative while dissent is bigotry.
By contrast, stories critical of immigration policy, sympathetic to Israeli/Jewish perspectives, or skeptical of gender medicine are virtually non-existent in this sample.
That’s not to say that, in the real world, injustice doesn’t exist. It surely does. But a neutral and objective news service should be able to present important stories using a neutral and objective voice. That obviously doesn’t happen at the CBC.
Consider these obvious examples:
- “Trump claims there are only ‘2 genders.’ Historians say that’s never been true” – here’s an overt editorial contradiction in the headline itself.
- “Trump bans transgender female athletes from women’s sports” which is framed as an attack rather than a policy debate.
And your choice of wording counts more than you might realize. Verbs like “slams”, “blasts”, and “warns” are used almost exclusively describing the actions of conservative figures like Trump, Poilievre, or Danielle Smith, while “experts say”, “historians say”, and “doctors say” are repeatedly used to rebut conservative policy.
Similarly, Palestinian casualties are invariably “killed“ by Israeli forces – using the active voice – while Israeli casualties, when mentioned at all, are described using the passive voice.
Institutional Viewpoint Bias
A primary – perhaps the primary job – of a serious journalist is to challenge the government’s narrative. Because if journalists don’t even try to hold public officials to account, then no one else can. Even the valuable work of the Auditor General or the Parliamentary Budget Officer will be wasted, because there will be no one to amplify their claims of wrongdoing. And Canadians will have no way of hearing the bad news.
So it can’t be a good sign when around 62 percent of domestic political stories published by the nation’s public broadcaster either quote government (federal or provincial) sources as the primary voice, or are framed around government announcements, reports, funding promises, or inquiries.
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In other words, a majority of what the CBC does involves providing stenography services for their paymasters.
Here are just a few examples:
- “Federal government apologizes for ‘profound harm’ of Dundas Harbour relocations”
- “Jordan’s Principle funding… being extended through 2026: Indigenous Services”
- “Liberal government announces dental care expansion the day before expected election call”
Agencies like the Bank of Canada, Indigenous Services Canada, and Transportation Safety Board are routinely presented as authoritative and neutral. By contrast, opposition or industry critiques are usually presented as secondary (“…but critics say”) or are simply invisible. Overall, private-sector actors like airlines, oil companies, or developers are far more likely to be criticized.
All this is classic institutional bias: the state and its agencies are the default lens through which reality is filtered.
Not unlike the horrors going on at the BBC, much of this bias is likely unconscious. I’m sure that presenting this evidence to CBC editors and managers would evoke little more than blank stares. This stuff flies way below the radar.
But as one of the AI tools I used concluded:
In short, this 2025 CBC RSS sample shows a very strong and consistent left-progressive institutional bias both in story selection (agenda) and in framing (interpretation). The outlet functions less as a neutral public broadcaster and more as an amplifier of government, public-sector, and social-progressive narratives, with particular hostility reserved for Donald Trump, Canadian conservatives, and anything that could be construed as “right-wing misinformation.”
And here’s the bottom line from a second tool:
The data reveals a consistent editorial worldview where legitimate change flows from institutions downward, identity group membership is newsworthy, and systemic intervention is the default solution framework.
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Is Updating a Few Thousand Readers Worth a Half Million Taxpayer Dollars? |
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| Plenty has been written about the many difficulties faced by legacy news media operations. You might even recall reading about the troubled CBC and the Liberal government’s ill-fated Online News Act in these very pages. Traditional subscription and broadcast models are drying up, and on-line ad-based revenues are in sharp decline. | ||||||
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Business
COP30 finally admits what resource workers already knew: prosperity and lower emissions must go hand in hand
From Resource Works
By Jim Rushton
What a difference a few weeks make
Finally, the Conference of the Parties to the UN climate convention (COP30) adopted a pragmatic tone that will appeal to the working class. Too bad it took thirty meetings. Pragmatism produces results, not missed targets.
We should not have been surprised. Influential figures like Bill Gates and Canadian-Venezuelan analyst Quico Toro, who have long argued that efforts to reduce CO₂ should focus more on technology and prosperity, and less on energy consumption and declining growth, have gained ground.
In the World Energy Outlook 2025, prepared by the International Energy Agency for COP30, you can see that many of the views held by the people above had already gone mainstream before the conference started.
The World Energy Outlook 2025 lays out three scenarios: Current Policies (CPS), Stated Policies (STEPS), and Net Zero Emissions by 2050 (NZE). In WEO 2025, all three scenarios reflect longer timelines for the decline of fossil fuels than in earlier editions, and the NZE pathway explicitly states that major technological breakthroughs will be required.
Unfortunately, many potential technologies are adamantly opposed by the loudest groups within the Climate Change Movement because they are not perfect. Even some continue to oppose nuclear power, one of the few proven sources of large-scale, zero-carbon, firm electricity.
Another noteworthy standout in WEO 2025 was the strong recognition that energy security, costs, and supply chains are now the primary considerations in determining each country’s energy mix.
What all this means is we are breaking away from emotionally charged, fear-based policies and rhetoric and moving toward a practical “let’s do things better” approach.
For 30 years, the radical leadership of the environmental movement has focused on what we should stop doing and on sacrificing prosperity. Essentially, what has been going on is an attack on working people in the industrialized and developing world.
Today, workers in the developed world are so anxious that many are losing faith in democratic institutions. Meanwhile, people in the emerging and developing world see light at the end of the tunnel and are determined to industrialize.
Clearly, it is time to merge the fight to lower CO₂ emissions with prosperity. “Let’s do things better” captures the history of human progress and resonates with working people today.
What does it take for longer, healthier, safer, and more sustainable lives? It takes the pragmatism of workers. They spend their lives striving to improve workplace safety, to develop tools that enable them to perform tasks more effectively with less physical effort, to earn higher pay, to produce more food with less land, and to preserve their opportunity to continue working.
Resource workers have felt under attack and are humiliated when celebrities fly in on a helicopter to denigrate their work and make references to the virtues of small-plot gardening, or politicians who tell them to go back to school for “jobs of the future”, only to find themselves in low-paying service jobs.
As the COP30 discussion indicates, we have reached a turning point. It is time to focus on doing what needs to be done, but doing it better. It is time to stop banning activities entirely as though circumstances and technology never change. Demanding perfection hides what is possible, slows progress and, in some cases, stops it altogether.
Bill Gates’ memo to COP30 points to the turn in the road:
“We should measure success by our impact on human welfare more than our impact on the global temperature, and our success relies on putting energy, health, and agriculture at the centre of our strategies.”
Gates also makes a point that will resonate with working people: “Using more energy is a good thing because it is closely correlated with economic growth.” Ironically, a statement made by a billionaire resonates with working people more than does the message of many climate activists.
The work at the Port of Prince Rupert comes to mind, given its growing role in supplying cleaner cooking and heating fuels, when we are reminded that 2 billion people worldwide cook and/or heat their homes with highly polluting open fires (wood, charcoal, dung, agricultural waste).
Persuasion published Quico Toro’s essay on November 13, 2025, which speaks another truth.
“COP imagines these emissions as something a country’s government can set, like the dial on a thermostat. But emissions are more like GDP: the outcome of a complex process that politicians would like to be able to control, but do not actually control.”
I am feeling more secure about the future here in Canada and BC, as governments, First Nations and the public are leaning into climate and economic pragmatism.
There will be hard discussions and uncomfortable trade-offs. Past decisions need to be re-examined in good faith. Do they meet today’s demands? Are we doing what needs to be done better? Is it the right move for today’s youth and future generations? Will we bring back the hope and opportunity of a growing middle class?
Nobody, not the Liberal government, the BC NDP government, First Nations, none of us would have predicted the world we are facing today, where our economy and sovereignty are challenged.
Today, oil, natural gas, and critical minerals, not one or two but all three, are the financial backstop Canada needs, as we rebuild the economy and secure our sovereignty.
Look West: Jobs and Prosperity for Stronger BC and Canada is as much of an admission that we are falling behind as it is a call to action. Success will take billions of dollars, the exact amount unknown.
But what we do know is that oil, gas, and critical minerals generate the most public revenue, the highest incomes, and are our most significant exports. They are Canada’s bank and comparative advantage. They will provide the cash flow needed to get it done.
Not maximizing oil production and exports is fighting with both hands tied behind our back. We all know it; now we need to focus on doing it better because circumstances have changed dramatically.
Jim Rushton is a 46-year veteran of BC’s resource and transportation sectors, with experience in union representation, economic development, and terminal management.
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