CSRS 4200: Impacts of a New Compilation Standard

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A change to CPA standards will soon impact on the scope of work we do for many of you.

This change, which has been years in the making, updates the rules for preparing and presenting certain types of financial statements.  The goal is to make “Notice to Reader” style financial statements more meaningful – both to you as the business owner, and to whoever else ends up viewing them.

All CPA firms will have to adopt the new standards for fiscal years ending December 14, 2021 and beyond.

Lohn Caulder is planning for a seamless transition to the new standard.  Clients should only notice small changes – a slightly altered look to your financial statements, and being asked a few additional questions each year.  A brief summary of these changes follows.

What is Changing?

Financial Statements

The new standards shouldn’t change the numbers on your financial statements, but they will add additional context.  The changes can be found in 2 primary areas:

  • Compilation Engagement Report: This is the new name for the “Notice to Reader” report found on page 3 of your statements. It will be quite a bit longer than what you are used to seeing.  Most notably, it now describes the responsibilities of both management and practitioner.  You can see an example of a the new wording on page 5 of the CPA Canada briefing
  • Basis of Accounting Note: The “Basis of accounting” note will describe the accounting method used in your business (most commonly: cash basis, accrual basis, or a mixture of the two). Many of business owners won’t know how to describe their ‘basis of accounting’, so we will help.  But please keep this in mind: you will be asked to acknowledge responsibility for the basis of accounting, so please ask as many questions as you need to!
Other Changes

In practical terms, implementing the new standard means we, the accountants, will be collecting more information from you, the business owners.  Please bear with us if we ask more questions than usual.  Some typical questions include:

  1. Enquires about the intended and expected users of your financial statements.
  2. Discussions about the methods of accounting you use.
  3. Asking you to sign Engagement and Management Representation letters before releasing the financial statements.
  4. Filling in gaps in our knowledge of your business. This could include things such as the number of people you employee, additions to your product line, or changes to your corporate structure.

For anyone who really wants to dig in we recommend this summary from CPA Canada: Compilation Engagements Management Briefing.  Or, as always, give us a call or send us an email.

CERS: The New Subsidy for Renters AND Owners

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We aren’t the first to say this, but things sure are changing fast these days!  Back in August (which feels like years ago now!), we wrote about Canada’s covid-related subsidies in a newsletter titled “CEWS in the News”.  Since then, every single subsidy we covered has been tweaked, extended, updated, or otherwise nixed

Today’s newsletter focuses on a subsidy that didn’t exist back in August.  We are going to talk about a new, significant addition to Canada’s covid relief program that we want to be sure every client of ours is aware of: the Canada Emergency Rent Subsidy, or “CERS”

For those who haven’t heard of it yet (it was just announced in October), CERS is a federal subsidy that assists businesses with their monthly property costs.  CERS is available to virtually all Canadian businesses, non-profits, and charities – to both renters and property owners – who have seen a drop in monthly revenues.  The subsidy runs in 4 week periods, starting with September 27 to October 24th, and continues through to June 2021.  At this point there is very little deadline pressure – CRA says they will start processing applications on November 30th, and continue to accept new applications for up to 6 months after the end of each period.

So how much is this subsidy worth?  The answer is, as usual, it depends!  CERS only funds a portion of your eligible property costs.  The important questions are: Which costs are eligible? and What portion of these costs can be claimed?

1. Which property costs are eligible for CERS?

If you are a renter, this includes most costs you are required to pay under a lease agreement, up to $75,000 per claim period. Think: base rent (excluding GST!), property taxes, insurance, and certain customary operating costs.

If you own your business property (which excludes homes), eligible costs may include property taxes, insurance, and interest on your mortgage, not to exceed $75,000 per claim period.

2. What portion of your costs can be claimed?

The portion of your costs that qualify for subsidy are tied to declining monthly revenues.

  • Revenue drops of 70% or more qualify for the maximum subsidy – 65%
  • Revenue drops over 50% and below 70% qualify for a subsidy between 40% and 65% (the calculation for this tier of subsidy is a bit too complicated for a newsletter!)
  • Revenue drops under 50% qualify for a subsidy equal to 80% of their revenue drop (for example, if revenues dropped 20%, your subsidy is 16%)

There is a final tier of subsidy we hope none of you find yourself in.  If any of you are in an industry that has been temporarily shut down due to a mandatory public health order, you qualify for the base subsidy plus a 25% top-up.  This bumps the maximum claim up to 90%.

Of course, this information is all high-level, and businesses will need to look at their eligibility on a case-by-case basis. If you think you might qualify, or have any questions about CERS or other subsidy programs, we are here to help!

Introducing “Portal”

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With winter fast approaching and 2020 almost in the rear-view mirror (finally!), we here at Lohn Caulder are marking the changing season with a big change of our own. We are very excited to announce the launch our new cloud document platform, simply called “PORTAL”.

Over the next few weeks, we will be creating a unique and secure Portal space for every one of our clients. Be on the lookout for an email invitation coming later this week (please check your spam folder if you don’t see it). We would like each and every one of you to register as soon as possible! Setup is truly quick and painless.

Your Portal will become the primary secure way to both send and receive documents with us. When your tax material is ready to send to the accountants, just upload it to Portal and we get a notification telling us it’s there. When your financial statements and tax documents are ready, we upload them to Portal and you get the notification.

Further, each client Portal is designed to double as a library of your Lohn Caulder documents. Going forward, you will be able to easily access things like tax returns and financial statements from anywhere with an internet connection.

Further still (!), the Lohn Caulder Portal is compatible with DocuSign, the first electronic signature platform accepted by the Canada Revenue Agency. We will be able to upload documents for you to sign with your mouse, your finger, even a saved signature file. No more printing, signing, scanning, and re-emailing documents!

Of course, most of you do already send and receive digital documents by email. While we have never experienced an email hack (knock on wood), we listen very attentively to the online security experts. We want to be sure your personal information is as safe as it can be. With Portal, we are partnering with CCH Wolters Kluwer, a firm with massive amounts of experience in cyberspace security. Hopefully this helps us all sleep just a little better at night.

We have put a tremendous amount of thought into how to best serve our clients in these fast-changing times.  We are confident that Portal will provide the necessary security and convenience to allow us to continue to provide you with the best possible service.

If you have any questions about the Portal you can always call us at 604-687-5444 or send an email to

CEWS in the News

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Have you applied for the CEBA, CEWS, and TWS?

The CEBA application is due August 31, 2020!

If your business has suffered any decline in revenue, you can now qualify for “CEWS 2.0.”

To aid Canadian employers during COVID-19, the Canada Emergency Business Account (CEBA); the Canada Emergency Wage Subsidy (CEWS); and the Temporary Wage Subsidy (TWS) are programs we encourage everyone who thinks they might qualify to contact us for further details.

The CEBA provides a $40,000 loan that is interest-free until December 31, 2022, and $10,000 of the principal could be forgiven if a minimum of $30,000 has been repaid by December 31, 2022.

The loan is available to Canadian operating businesses with 2019 gross payroll between $20,000 and $1,500,000, or Canadian operating businesses that have filed a 2018 and 2019 tax return and have eligible non-deferrable expenses – such as rent, property taxes, utilities, and insurance— between $40,000 and $1,500,000

If you think you qualify please contact us or your corporate financial institution to apply for this loan.  The deadline to apply is August 31!

CEWS for Periods 1 to 4 (March 15 to July 4, 2020)
The CEWS program is a payroll subsidy for employers that suffered a decline in revenue of at least 15% in March 2020, and 30% in any of April, May, and/or June 2020. The revenue decline is based on comparison to the revenue in the same month in 2019 or the average revenue of January and February 2020.

CEWS for Periods 5 and Onwards (after July 5, 2020 – “CEWS 2.0”)
The CEWS program has been extended to at least November 21, 2020, and has moved away from an all-or-nothing approach, so that eligible employers with any decline in revenue will qualify.

The base subsidy will be available to eligible employers that experience any decline in revenue, and the subsidy amount will be dependent on the extent of the revenue decline when comparing the revenue of the reference month to either (1) the revenue of the same month in 2019, or (2) the average revenue for January and February 2020.

A top-up subsidy will be available to eligible employers that experience a decline in revenue exceeding 50% when comparing the average revenue in the preceding 3 months to either (1) the average revenue in the same 3 months in 2019, or (2) the average revenue in January and February 2020.

The reference periods used to compare the revenue decline percentages for both the base subsidy and top-up subsidy must be consistent throughout periods 5 to 9.

CEWS Application
Applications for claim period 5 (July 5 to August 1) will open on August 17, 2020.

Retroactive claims for any of the periods 1 through 4 can be made now.

To proceed with the application, or if you have questions, please contact Andy Li at

10% Temporary Wage Subsidy (TWS)
Most businesses with existing payroll accounts and regular salaries will qualify for the TWS even if they did not meet the revenue decline tests required for the CEWS.

The 10% TWS is a 3-month measure that allows eligible employers to claim a subsidy equal to 10% of the remuneration paid form March 18 to June 19, 2020, up to a maximum of $1,375 for each eligible employee and $25,000 for each eligible employer.

Reporting for the TWS is now available.

*   *    *    *    *    *    *    *    *    *   *    *

Please visit our Covid-19 resource page on our website:

Business Owners & COVID-19: What You Should Know

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Our managing partner of Lohn Caulder LLP , Jason Nakano, has teamed up with Bruce Lindsay and Shane McMahon from OceanFront Wealth to speak about investment opportunities and tax subsidies related to COVID-19.

If you are a business owner and curious what your options are during COVID-19 please watch this presentation:

For further details about the Canadian COVID-19 subsidies available, please check out our dedicated page by clicking here.

Update on COVID-19 Benefit Programs

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The Federal Government continues to tinker with the specifics of their giant subsidy program for Canadian businesses.  We are sending you information based on announcements made, to date.  Draft legislation has yet to be released, so things are still in flux.  But here is what we know at this time:

Payroll Assistance for Employers

1. Corporations, partnerships, proprietors, charities and not-for-profit organizations of all size are eligible for a subsidy from the Government regarding their payroll costs, called the ‘Canada Emergency Wage Subsidy.’

2. To qualify for the subsidy, the entity must be able to prove a greater-than-30% decline in revenues, for the eligible periods March 15 through June 6, 2020, comparing revenues of March of 2019 to March of 2020 through May of 2019 to May of 2020, monthly.  Those businesses who file monthly GST returns will already be set up to make this calculation, even though, as of today, they are almost a month away from the filing due date of the March 2020 GST return.  Others who file less frequently, or who didn’t exist in March of 2019 will have more difficulty in making this calculation.  Details are to follow for those businesses soon, we hope.

3. Starting from March 15, 2020, you can apply for a taxable subsidy for a maximum of 75% the first $58,700 of salary costs per employee, for a maximum of $847/week/employee.  You might ask: why such odd numbers ? There’s no answer offered for that, but the weekly subsidy is calculated as 75% x $58,700 divided by 52 weeks.

4. What about the other 25% ?  At this time, there is no apparent obligation for employers to ‘top up’ the wage by digging into their own pockets.  Therefore, businesses can, if necessary, drop their payroll by 25% and have the Federal Government cover the entirety of their new, lower wage cost.

5. The Government only ‘encourages’ Canadian businesses to maintain payrolls at their previous levels, using their “best efforts” – there is no current obligation to do so.

6. If you have laid off employees for the simple reason that there is no work to be done (for example, restaurants and bars, or many others forced to close due to ‘social distancing’ and other requirements), then you cannot get a subsidy for them while they are laid off.  Those workers may, individually, be eligible for the ‘CERB’ benefit, outlined below.

7. Wages for this purpose apparently include non-arm’s length wages, so long as they remain reasonable as to the amount paid.  Therefore, owner-managers of wage paying entities should be able to include their own wages in the subsidy application.

8. Businesses must apply for the subsidy through a CRA portal that does not yet exist.   It will be available in 3 to 6 weeks.  Another up to 6 weeks could be needed to receive the funds – so your subsidy could be as much as 12 weeks delayed, from now.  If you lack the finances to maintain payroll, even at a 75% level, then you won’t get a subsidy, or the subsidy you receive will presumably have to be repaid.

9. Since the online CRA portal does not yet exist, businesses have time to firstly calculate whether they have indeed suffered a 30% revenue loss, March 2020 vs. March 2019.

10. Those businesses that do not qualify for this new subsidy may continue to qualify for the previously announced wage subsidy of 10% of remuneration paid from March 18 to June 19, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.  Employers can reduce the remittance of payroll income tax according to their calculation of the amount of the subsidy.

11. Your business should register for direct deposit with CRA to ensure the funds are received on a timely basis.  We encourage clients to register for “My Business Account” with CRA online to manage that.

Assistance for the Self-Employed and Other Individuals

There is another program aimed directly at persons who have been laid off, or who otherwise have lost their income.  It is called the ‘Canada Emergency Response Benefit’ (CERB).

1. It also runs from March 15th, 2020, for up to 16 weeks, maximum.  Applications will begin the week of April 6, 2020.

2. The CERB applies to workers who have stopped working due to COVID-19, are sick, are quarantined, giving care to someone with COVID-19, or who must stay home because they are parents of children who are sick or at home because of school and daycare closures, for at least 14 consecutive days in the initial 4-week period.

3. The CERB applies to wage earners, contract workers, self-employed persons and others not otherwise eligible for EI (Employment Insurance).

4. It is for a maximum of $2000 for a 4-week period ($500/week).

5. You will be able to apply online or by phone.  We encourage clients to register for “My Account” with CRA online.

Business Credit Availability

The Government of Canada has announced a small business lending program to provide greater access to capital.  It is called the ‘Canada Emergency Business Account.’

1. Applications must be made through your financial institution.

2. The program will provide interest-free loans of up to $40,000 to small businesses and non-profits to help cover operating costs where their revenues have been reduced due to COVID-19.

3. Repaying the balance of the loan by December 31, 2022 will result in loan forgiveness of 25% (up to $10,000).

Please contact us for any additional information.

The Lohn Caulder Team

Lohn Caulder COVID-19 Firm Update

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Dear Clients and Friends –

We at Lohn Caulder are still at work !  However, ‘work’ happens to be at 45 different locations across the city, all connected electronically on a secure communication system.

While there are some staff in our regular office, generally they are not accessible from the outside.  Our building has been, more or less, ‘locked down’.

Please have patience during this difficult time.  We hope to be as accessible as ever over the phone, or e-mail.

Here’s a video message from Jason Nakano, our managing partner, to bring you up to date:

Canada’s COVID-19 Economic Response Plan – Key Points for Businesses and Individuals

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Since the beginning of March, restrictions and measures related to COVID-19 have rapidly escalated. While the first stages focused on public health and safety, in very short order, businesses and personal finances began to be affected. It is clear that these challenges will become worse before they get better. In an effort to combat these effects, the Government of Canada released a series of financial measures in mid-March.

This newsletter summarizes selected government comments up to March 18, 2020.


Tax Return Due Date Deferral: The personal tax filing due date will be deferred until June 1, 2020. However, those expecting refunds or benefits (such as the GST/HST credit, Guaranteed Income Supplement and Canada Child Benefit) should file as early as possible. The government release encourages Canadians not to delay their filings in order to ensure their income-tested benefits are accurately computed.

Tax Payment Deferral: Taxpayers may defer, until after August 31, 2020, the payment of income tax amounts that become owing on or after March 18, 2020 (also including installments) and before September 2020. The government documents indicate that payment will be deferred “until after August 31, 2020”, which seems to imply payment will be due on September 1. No interest or penalties will accumulate on these amounts during this period.

Individuals Without Paid Sick Leave: For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the government is:

  • Waiving the one-week waiting period for those in imposed quarantine that claim Employment Insurance (EI) sickness benefits, effective March 15, 2020.
  • Waiving the requirement to provide a medical certificate to access EI sickness benefits.
  • Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks (comparable to EI sickness benefit). This benefit would provide income support to:
  • workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits;
  • workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not quality for EI sickness benefits; and
  • parents with children who require care or supervision due to school closures, and are unable to earn employment income, regardless of whether they qualify for EI or not.

Application for the Benefit will be available in April 2020, and require Canadians to attest (and continue to attest every two weeks) that they meet the eligibility requirements. Individuals can apply through CRA’s MyAccount, their My Service Canada Account, or by calling an automated toll-free number not yet released.

Longer-Term Income Support

  • An Emergency Support Benefit will provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment. The individual amounts and process will be disclosed shortly.
  • Implementing changes to the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process.
  • Low/Modest Income Individuals
    • A one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC) will be made. This will double the maximum annual GSTC payment amounts and result in an average boost to income for those benefitting by close to $400 for single individuals and close to $600 for couples.
    • The maximum annual Canada Child Benefit payment amounts would be increased by $300 per child for the 2019-20 benefit year. This will be added to the May, 2020 benefit cheque.
  • Canadians Abroad: The Emergency Loan Program for Canadians Abroad will provide the option of an emergency loan to Canadians in need of immediate financial assistance to return home or to temporarily cover their life-sustaining needs while they work toward their return. Each application will be assessed according to their specific situation and needs. This emergency assistance is a repayable loan. Eligible Canadians currently outside Canada and needing help to return home can contact the nearest Government of Canada office ( or Global Affairs Canada’s 24/7 Emergency Watch and Response Centre in Ottawa at +1 613-996-8885 (collect calls are accepted where available) or email
  • Students: A six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans will be provided.
  • Minimum RRIF Withdrawals: The required minimum withdrawals from Registered Retirement Income Funds (RRIFs) will be reduced by 25% for 2020. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.\



Tax Payment Extension:
Businesses may defer, until after August 31, 2020, the payment of income tax amounts that become owing on or after March 18, 2020 and before September 2020. This relief would apply to tax balances due, as well as instalments. No interest or penalties will accumulate on these amounts during this period.

Other Payment and Filing Extensions: No comment was made about changing the filing and payments dates for payroll, GST/HST, and other non-income tax items.

CRA Audit Activity: CRA will not contact any small or medium businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the CRA will temporarily suspend audit interaction with taxpayers and representatives.

Liaison Officer Service: The Liaison Officer service is now available over the phone and will be customizing information by ensuring small businesses are aware of any changes such as filing and payment deadlines, proactive relief measures, etc.

Payroll Subsidies: The government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum of $1,375 per employee and $25,000 per employer. Businesses will benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.



Trust Filing Due Date Deferral: For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.

T3 Slips Submission Date: No specific statement was made regarding the deadline for filing T3 slips reporting income taxable to the trust beneficiaries.

Other Returns: Many taxpayers are required to file other tax and information returns. No mention was made of these, including partnership returns and NR4 reporting slips.

EFILE Signatures: In order to reduce the necessity for taxpayers and tax preparers to meet in person, effective immediately the CRA will recognize electronic signatures as having met the signature requirements of the Income Tax Act, as a temporary administrative measure. This provision applies to authorization forms T183 or T183CORP.



Individuals: Canada’s large banks have confirmed that this support will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products. Banks have affirmed their commitment to working with customers to provide flexible solutions, on a case-by-case basis, for managing through hardships caused by recent developments. This may include situations such as pay disruption, childcare disruption, or illness.


  • The Business Credit Availability Program will allow the Business Development Bank of Canada and Export Development Canada to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses. The near-term credit available to farmers and the agri-food sector will also be increased through Farm Credit Canada.
  • The Office of the Superintendent of Financial Institutions (OSFI) announced it is lowering the Domestic Stability Buffer by 1.25% of risk-weighted assets, effective immediately. This action will allow Canada’s large banks to inject $300 billion of additional lending in to the economy.
  • For Exporters: The Minister of Finance would now be able to determine the limit of the Canada Account in order to deal with exceptional circumstances. The Canada Account is administered by Export Development Canada (EDC) and is used by the government to support exporters when deemed to be in the national interest.
  • Interest Rates: The Bank of Canada cut the prime interest rate to 0.75%. Other banks have also reduced rates.


  • Indigenous Community: $305 million for a new distinctions-based Indigenous Community Support Fund will be provided to address immediate needs in First Nations, Inuit, and Métis Nation communities.
  • Homelessness: The Reaching Home initiative will be provided with $157.5 million to continue to support people experiencing homelessness during the COVID-19 outbreak. The funding could be used for a range of needs such as purchasing beds and physical barriers for social distancing and securing accommodation to reduce overcrowding in shelters.
  • Domestic Abuse Shelters: Women’s shelters and sexual assault centers will receive $50 million to help with their capacity to manage or prevent an outbreak in their facilities.



Many of the measures listed above have only been announced recently (March 18, 2020) and are noted as requiring Royal Assent. In recent public comments, it was indicated that the opposition parties have promised their support to move these measures quickly, therefore, we can presumably expect draft legislation in the short term.

Over the next days and weeks, the specifics on these programs will be released. Most of the details for these initiatives will be released on one of these four webpages:




Employment and Social Development Canada:

As the situation develops further, there may be additional government measures, or modifications to those already announced.

The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.

No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.