CERB is a social program which has helped Canadians directly affected by the economic impact of COVID-19. Why is it taxable when it is not “earned income”? It’s like taking from Peter to pay Paul, right? Here is my theory.
- Bankers want to see income on tax returns for the purpose of substantiating credit worthiness. The personal tax return is their universal tool along with credit bureaus.
- The federal government wants to keep everyone in the tax pool despite income levels and the basic personal tax exemption. Imposing a tax liability even on the most vulnerable keeps people in the system.
- Feeds the bureaucracy
- Calculations of the “Canada Child Benefit” program along with GST / carbon tax rebates are now enshrined with the reporting of “taxable income”. Your government wants to include CERB income as a calculated variable.
- It’s consistent with your government’s tax collection agenda given its propensity to overspend.