Why Does Your Government Make CERB Taxable?

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.

  1. 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.
  2. 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.
  3. Feeds the bureaucracy
  4. 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.
  5. It’s consistent with your government’s tax collection agenda given its propensity to overspend.