Will Covid-19 Change Grocery Shopping Forever?

By Randall Orser | Covid-19 , Retail

Before Covid-19 many of us enjoyed grocery shopping often making multiple trips a week to get fresh ingredients for a special meal.  Today, what was a simple chore has become a stressful challenge as many Canadians feel like they are preparing themselves for a battle wearing a mask, hand sanitizing, lining up to enter the store, following store aisle signage and keeping six feet away from other shoppers. 

Supermarkets have had to work hard to navigate Covid-19 and plan for the future.  From dealing with panic buying, empty shelves and customer complaints to the present foot traffic restrictions, taped markings on floors, dedicated hours for vulnerable shoppers to one way shopping aisles and plexiglas screens separating cashiers from customers.

Not only shoppers are nervous, store employees who have been designated front line workers have been at a heightened risk since the pandemic started.  Safety measures for them only arrived gradually and well after community transmission was underway.  As a way of recognizing the risk that their employees were working under, four of Canada's main grocery chains increased their hourly wages.  In addition the federal government announced it would allocate $3 billion to top up the wages of frontline workers and another billion came from the provinces.  However it is unclear how much will go to grocery workers and how long it will be for.  

The biggest change in the grocery market is that people have changed to buying on-line.  Many of us will remember at the start of the pandemic trying to order a food delivery and finding that all delivery slots were filled for an endless number of weeks. Before the pandemic only 4% of Canadians shopped for groceries on-line this has now jumped to 22% and grocery subscription and meal kit services are also booming.

Grocery stores have had to adapt rapidly on multiple fronts, expanding on-line shopping infrastructure, monitoring inventory more closely, and increasing health and safety measures for shoppers and employees.  They are also having to fend of competition from new players in the direct to consumer market from restaurants, food delivery services, farmers markets and individual markets.  Grocery store business could be forever changed by the change in customer preferences which may grow stronger rather than decline during and when the pandemic is over.

From an article by Rebecca Tucker

Benefits and Impacts of Deferring your Mortgage Payments

By Randall Orser | Budget , Covid-19 , Personal Finances

The impacts of Covid-19 have been felt by everyone in Canada, and many are struggling financially due to loss of work or decreased hours.  For those needing help there are financial relief programs that can offer much needed breathing room.

The ability to defer a mortgage payment is an option that has been offered by most lenders. It enables people to free up cash for the short term by deferring a significant financial obligation but it is not the right decision for everyone.   Here are some of the pros and cons of deferring your mortgage payments:

1. Being able to defer your mortgage payments can provide much needed peace of mind in these difficult times.  It will improve your monthly cash flow which will cover your urgent life expenses if you are experiencing a reduction of income .

2.  Don't just miss a payment as this comes with negative consequences such as your mortgage becoming delinquent causing a negative impact to your credit rating and risking potential foreclosure.  It is important to seek advice sooner rather than later to explore your options and make informed decisions.  Work with your mortgage lender to set up the deferral if you decide that this the best action for you to take.

3. When making the decision to defer your mortgage payments it is important to understand that the unpaid interest accrued during the skipping period will be added to the outstanding principal on your mortgage, which means that you will owe more on your mortgage in the long run than if you did not defer any payments.  Reducing your monthly payments will also lead to a longer repayment period and payment of more interest over time.

4. There are other ways to free up funds if you don't think that deferring mortgage payments is a good idea for you:

  • Refinancing your Mortgage - if you have equity built up in your property you may be able to access it to pay out other debts or create some cash flow.
  • Increasing your Mortgage Amortization - this will help you to lower your monthly payments but you will be spreading out your payments over a longer period of time.
  • Adjusting your Monthly Budget - staying at home will probably have decreased your monthly spending so it is a good idea to identify where you are saving money and make sure you allocate it to necessities rather than things that you don't need.
  • Look at other deferral options - you may be able to defer your property taxes, utility payments and payments on credit cards and loans these might be better options than deferring mortgage payments.

Deferring your mortgage payments can help your immediate financial situation but you need to carefully consider the potential future financial impacts.  You should speak with your financial advisor to determine if this is the best thing for you to do or if there are better options for you to free up cash to tide you over.

From an article by Diane Amato

Bubble Friendly Ways to Vacation

By Randall Orser | Covid-19 , Personal Finances

Industry watchers have called this summer "the summer fun forgot" and even though the economy is slowly coming to life again people are still being cautious when it comes to vacations and travel.  Even though countries in Europe and the Caribbean have opened their borders and there are some flight deals the federal travel advisory to avoid non-essential international travel is keeping people from travelling.  A recent Travel Week survey found that 42.7% pf respondents would travel within Canada even if global travel resumed tomorrow.

Frederic Dimanche director of the Ted Rogers School of Hospitality and Tourism Management at Ryerson University say that "trust" is the operative word this year.  "Vacationers will want to travel with p people that they know well, are likely to stick to small groups and their own bubble.  Many people will do road trips instead of flying and return to family camping trips or drives to the lake, back to holidays they experienced in the past."

Here are someways to make your vacations memorable:

1.  Head to Cottage Country - many will be looking to rent a cottage if they don't own one and will plan to visit people who do have a cottage.  

2.  Those who want to stay inside their bubble are travelling the open road in an RV or by car but most are not travelling too far from home usually remaining in their own province.

3.  Finding adventure close to home - those who love adventure think they need to look offshore to find it but this year they are exploring their own backyard.  Companies are ready to provide private and custom trips including backpacking tours in the Coast Mountains.

4. Communing with Nature - Camping has become very popular as a vacation option but campers are advised to still keep their groups small and not mix with other households.  All campgrounds have cautions and protections in place and advise people to prepare to be self sufficient and bring extra hygiene supplies, hand sanitizer, wipes, water and food.

5. Volunteering - Transfer your vacation into a learning experience by volunteering.WWOOF is an organization that provides opportunities to work on organic farms and learn about organic food and agriculture.

6 Hop on your Bike - Biking has become the number 1 pastime during the pandemic and is a good vacation choice for many as it allows you to keep fit while enjoying the scenery.  There are plenty of places to explore by bike especially on Vancouver Island.

7. Make it a sporting holiday while still physical distancing - two sports that are ideal for this are golf and tennis.  You could also consider fishing, or rock climbing or canoeing.

8 Find new entertainment while Staycationing - there are many activities that promote family bonding such as working on your family tree or writing your family history.  You can take a variety of classes including the ever popular on-line cooking classes.  Think about that project that you have been putting off for so long, now might be the time to tackle it that might include DIY home repairs or furniture restoration both of which help increase business at your local building supply centre.

Whatever type of vacation you choose this year, there is a good chance that you will save some money which is good for your budget.

From an article by Margaret Craig-Bourdin

New Practices you Should Adopt Before Re-opening your Business

By Randall Orser | Business , Covid-19 , Employees

As businesses are slowly reopening employees who have been working remotely may slowly be phased back into the office.  To do this safely employers have to consider changes that make sense to protect their employees while still operating effectively.  A risk assessment should be done to look at all potential risks such as those that are hygiene related, safety related or involve staff scheduling and deciding what measures need to be put in place to reduce them.

Here are five best practices that employers should think about putting in place to create a safe as possible workplace.

Create a Task Force and a Contingency Plan - Establish a team to monitor the workplace.  They can create a response plan should workers test positive for workplace disruption and enabling the business to continue.  All contingency plans should be continually revised to reflect the current situation and should document all response lessons learned over time.

Communicate Effectively - Employers should communicate their return to work and safety plans effectively either through the task force or the health and safety representative.  Most employees will be anxious about the return to work and these anxieties need to be addressed by employers strongly communicating the safety plans to their staff.  Staff need to be kept up to date either weekly or even daily by email or conference call so that they know what practices are being put in place or revised to protect employees from potential risks or exposure and how these practices will affect their jobs.  It is a good idea to involve employees in conversations and safety plans.

Plan to have a slow return to work - Some companies are finding that having staff working from home is working successfully while for others it is a short term solution which is not sustainable. Phased returns, staggered shifts and different start and end times are a good way of reducing risk so that only a portion of the workforce is present at a given time.  Many companies are now used to working with a remote workforce so employers can decide who must return to work as soon as possible and who can be gradually called back.  Employers should be more flexible when considering the individual circumstances of employees such as those who are at a higher risk of serious illness or those who need to have child care in place.  

Maintaining Distance in the Workplace - Whatever the plans for the return to work employees should be returning to a set of guidelines to help them to continue physical distancing.  Working closely together is difficult to avoid in change rooms or manufacturing lines and even in offices there are challenges that arise in elevators, kitchens, washrooms and boardrooms.  It might be necessary to do some office re-design or create pods of workers to optimize physical distancing.  

Additional Guidelines;

  • How to deal with non-essential visitors 
  • Should employers be taking non-essential travel?
  • Guidance around self-isolation
  • Plans for workers who start to feel ill at work including who they should notify.
  • Implementing cleaning and hygiene measures including cleaning and sanitizing all common areas and providing hand washing and hand sanitizer facilities.

In BC employers can find help through the following resources:  

From an article by Ethan Rotberg

Tips for Pivoting your Business During Covid-19

By Randall Orser | Budget , Business , Covid-19 , Employees

In the past few months we have seen companies take amazing leaps to change the way they do business and manufacturing businesses retool to make new products to meet changed market demands.  From distilleries and hair product manufacturers making hand sanitizer, to clothing manufacturers making surgical gowns, other industries making ventilators and fine dining restaurants turning to take-out and delivery.

It used to take companies a long time to develop strategies to change manufacturing plans but during the pandemic it has been necessary for businesses to make new plans at lightening speed in order to stay in business and keep their workers employed.

However many companies are struggling to meet this new reality and need help to reinvent themselves.  Lior Zehtser from Connect CPA says that "To pivot, you really need to think outside the box and be comfortable with taking a risk and experimenting with a different or unique business model.  Your idea obviously has to take the friction away from close contact, so that anything delivery based or "contactless" would be a great start.

Here are some ideas that might help you to make some decisions:

1. Solving Delivery Dilemmas - the need for delivery especially in the food services sector is insatiable. An outside of the box way of shopping and delivering unique goods to customers is a good idea for a new business. It can be expanded from food to all kinds of products that people would like to have but are not shopping for if they are only going out for necessities.   

2. Going Back to Basics - instead of producing your whole range of products concentrate on the ones that are most popular to make best use of your resources.  Companies are listening to what consumers want the most and are limiting their production to those high demand products instead of producing their whole range of products.

3.  Provide Entertainment -  as families are spending more time together at home offering them a diversion to relieve the boredom is a great idea.  Specialty bookstores and game stores are offering delivery services which are successfully increasing their bottom line.

4. Add to your Product Mix - for example if you are a company that usually delivers drinks or snacks to offices pivot to making home deliveries and add other basics such as milk, eggs and bread and fruit and vegetables.  Many restaurants are doing this by adding many of their sauces and desserts etc to their menus so that people can cook at home with gourmet foods as well as having meals delivered.

5. Make a Product to Help to Fill Health Needs - many distilleries are making hand sanitizers and hand wipes and offering them for free or at a discount to essential service providers.  This is a way to give back to the community and builds brand loyalty.   Many clothing manufacturers have pivoted to making face masks and surgical gowns as well as fashion face masks for sale direct to customers.  

6. Take your Business Online - live streaming and video conferencing are the new ways to stay connected and do business.  By doing this you can keep in touch with your customers and suppliers but at the same time have the chance to acquire a completely new audience.  

7.  Join a Group of Other Companies Seeking Solutions - to build contacts and nurture ideas to help to create opportunities for your business and others.

8.  Get Inspired Globally - look online and find inspiration from what others are doing.  Learn how other businesses around the world are adapting and discover new inventions from companies and individuals that are helping in the pandemic.

9.  Support your Community - connect with charities in your area to see how you can help your neighbours.  Offer discounts on the purchase and delivery of your products, everyone loves a deal and it brings in customers which will help your bottom line.

10. Keep yourself up to date with the latest trends - no matter when the crisis ends the way that businesses operate has changed forever.  It is important to stay on top of changing consumer demands and have a flexible plan to allow your business to keep adapting to meet those demands.

From an article by Margaret Craig-Bourdin

What Small Businesses can do to Survive the Pandemic

By Randall Orser | Budget , Covid-19 , Employees , Small Business

Businesses are doing all they can to navigate the unknown and to stay afloat during the pandemic, including laying off staff and reduced hours.  However up to 30% of small businesses are going to be unable to survive according to Jasmin Guenette from the CFIB.  

Here are a few actions that small businesses could take that might help them to deal with their situation.

  1. Check your reserves and insurance - talk with your accountant about your cash flow and reserves and how they can be best used.  Also check your insurance policy to see if there is anything that can be covered for lost income.  Even though many businesses have business interruption insurance, as this is a pandemic it does not count. 
  2. Have honest conversations with your staff about how you are going to try and keep them on the payroll but what might need to be done if your situation worsens.  
  3. Brainstorm with your staff for any ideas about how things could be done differently to save money and layoffs.
  4. Think about allowing your employees to work from home if it is possible in your business. If you can save on rent and utilities for your small office that could help your bottom line.
  5. Think about reducing business hours if possible.  This will give employees extra time to carry out cleaning and sanitizing for the office or if your are open to the public.
  6. If your business is open make sure that you follow all health and safety protocols to ensure a safe environment for your staff and the public.  Make sure all staff are fully trained and know what is expected of them.  
  7. Talk to your suppliers and lenders about stretching your payments and make sure that you take advantage of all the government, provincial and municipal help available to you.
  8. Get help from your accountant and business advisors to decide which government programs are most appropriate for your business.
  9. Continually think and plan ahead to see what you can do to minimize the impact of Covid-19 on your business. 
  10. Consult useful resources geared to small business:

From an article by Margaret Craig-Bourdin                              

How the Pandemic is Affecting Canadian Businesses

By Randall Orser | Budget , Covid-19 , Employees , Small Business

Even though many small businesses have fully or partially reopened the financial effects of the pandemic have been disastrous.  The serious decrease in revenue has meant that many have had to take on debt in order to stay afloat and many are calling for further government financial help.

The Canadian Federation of Independent Business (CFIB) has been tracking small businesses through the pandemic and the most recent survey of more than 4000 businesses found that 40% of them have seen revenues drop by 70% and & 70% have seen revenues drop by at least 30%.  

Even with the easing of restrictions by provinces and municipalities allowing for small businesses to reopen it is going to be a long time until sectors such as hospitality and entertainment will start to show a profit again.  Ted Mallet the vice president and chief economist of the CFIB has said it is more difficult for small businesses to operate now and despite being patronized by people who love unique products and services, many of these businesses will not survive.

The new reopening rules mean that restaurants are only able to have 50% of their normal capacity.  They usually have a profit margin of 3-5% when times are good so despite having  pick up and home delivery it is difficult for many to continue to hang on. 

The CFIB survey found that 34% of respondents were behind on their major bills such as rent, credit card bills and critical suppliers, that number is 47% in the hospitality sector.  More than 25% said that their biggest worry was having to close their business, they are borrowing money to keep going but are building up debt that is going to be difficult to pay down.  In addition they have the costs associated with the changes necessary to operate their business post lockdown.

Though it is doom and gloom for many businesses, due to a change in consumer behaviour there are some business that are thriving, including home-gym products, those selling renovation products on-line, hobby shops and bike shops but these businesses are in the minority.

From an article by Ethan Rotberg CPA Canada

Will Covid-19 Relief Measures Affect my Taxes?

By Randall Orser | Business Income Taxes , Employees , Personal Finances , Personal Income Tax , Small Business

Accountants are not completely certain how the various government benefits being received by individuals and businesses during the pandemic will affect their tax bill next year.  However what will be certain is that if the benefit is a taxable benefit then you need to be prepared to pay tax on it in 2021 when you file your 2020 tax return.

As of April 2020 here is the information available from the CRA website and current legislation.

1. For Individuals

  • Any CERB payments are taxable, any payments that you have received will have to entered onto your tax return and an information slip will be available to you next year in MyAccount under Information slips so that you can enter your income in the correct boxes on your tax return.
  • One time additional payments for the Canada Child Benefit and the GST/HST tax credit are tax free and it is not expected that this will change in 2020.  The GST payment is also tax free and it is not expected that this will change.
  • If your student loan payments have been suspended then you will probably not have as much allowable student loan interest to claim on your income tax return as long as it is a qualifying student loan per CRA guidelines.
  • Deferred payments under mortgage support are added to the outstanding principal balance and are repaid over the life of the mortgage.  The mortgage support system is managed specifically by your lender and any deferral of payments is an arrangement between you and them.  The only impact on your taxes might be experienced by those who are self-employed who are able to claim business use or use of home expenses on their tax return.
  • The minimum withdrawal limit under the RRIF has been reduced by 25% for 2020 which means that if you take out less money you will pay less tax as money in your RRIF is only taxable when it is withdrawn.  

2. For Businesses

  • Tax credits and other benefits provided by the government still apply so any money received as a wage subsidy is considered government assistance and is included in the employers taxable income.  If you apply for the CEWS benefit you need to understand the tax implications of receiving this benefit.  The subsidy must be noted in your bookkeeping records and will become part of your business income that you report on your T2125.  
  • The TEWS or Temporary Wage Subsidy will be recorded in the same way.  The subsidies are a reduction in the amount that you send to the government for income taxes that you withheld from your employees and it becomes income for your business.  

It is paramount that you keep accurate accounting records throughout 2020 as they will be very important when you do your tax return in 2021.

From an article by Susan Watkin

How to Manage your Personal Finances During the Pandemic

By Randall Orser | Budget , Covid-19 , Personal Finances

The Covid-19 pandemic is causing financial stress for most Canadians as they are seeing their income reduced or eliminated and they are wondering how they will be able to pay their bills.

All levels of government have implemented emergency response plans including financial support and many financial institutions have stepped up to help by allowing people to defer payments and avoid penalties.  Here are some ways that you can reduce the financial impact of Covid-19.

The federal government started the $107 billion Covid-19 Emergency Economic Response Plan, with $52 billion direct support for employers and workers and $55 billion in tax deferrals for workers and businesses. Other financial assistance to families include:

  1.  A one-time increase to the GST tax benefit and increases to the Canada Child Benefit.
  2. A six-month interest free moratorium on the repayment of student loans'
  3. A 25% reduction in minimum withdrawals from a RRIF and variable benefit payments under a RRSP to help reduce the impact of volatile markets on senior's retirement savings.
  4. There are additional benefits to Canadians available from their province and municipality and they should visit the relevant websites for more details.
  5. Financial institutions are offering deferrals of mortgages up to six months for some customers as well as loans and relief on credit card payments and interest.

What can Canadians do to help themselves financially during the pandemic?

  • If you need to borrow money make sure that you consider the interest rates and how you will repay the loan, do not dig yourself too far into debt that it will be difficult to get out of once the pandemic is over.
  • If you have to tap into your emergency funds do it strategically, maximize all income sources first, create a more stringent budget and spending plan then consider tapping into your savings if you need to.  Always start with cash funds and TFSA's as you will not have to pay tax on that income and withdraw RRSP's on non-registered tax investments as a last resort.
  • If you are still working making saving money a priority after you have covered your necessary expenses this will help you should your job become affected.
  • Maximize help programs from utility companies that can include lower rates, deferred payments and flexible payment plans to assist residents and companies.  Many cell phone providers have removed data caps on internet and data plans and waived countrywide long distance fees.  They are also offering flexible payment plans.
  • Consider which bills you can eliminate such as subscriptions to digital services or retailers, and monthly donations.

It is important to continually assess your financial situation and if you can make changes that will help you to be more prepared for the future.

From an article by Sophie Nichols Jones 

How to Manage Flexible Work Arrangements for your Business

By Randall Orser | Employees , Small Business

Prior to the pandemic employees were already looking for new incentives to keep themselves motivated and engaged including the most popular one flexible working arrangements.

From an employers point of view offering flexible working means that there are some hurdles to be overcome. These can include the feeling that not making full use of the office space that they have invested in is a waste of money and secondly how can they make sure that their employees are being productive if they are not continually supervising them?

Due to the pandemic many more employees are working from home employers have had to change their mindset to embrace this.  For example instead of measuring the amount of hours spent at their desks they need to measure their employees productivity. Previous research into flexible working arrangements showed that employees have a greater degree of job satisfaction and higher productivity rates when they work away from the office.

It is true that flexible working arrangements do not work for every business especially if face-to-face contact with clients is important. However during the pandemic many businesses are getting around this by setting up Zoom meetings with their clients.  

Flexible Work Locations:

Offering flexible work arrangements will include work locations.  Employees can work in the office part of the week and from outside the office the remainder of the week whether it be at home or at another remote location of their choice.  Alternatively they can work entirely out of the office and just be in the office for special training, staff meetings or special events.  One advantage to this system is that employers do not have to hire talented workers who live locally instead they can hire from the best talent available in the industry wherever they live.

Flexible Schedules:

Instead of the 9-5 schedule required in the office employers can allow workers to set their own eight hour work day within a 12 hour period, or they can work 10 hour days for four days a week.  This schedule could be subject to change after a 3 or 6 month time period depending upon the requirements of the company.  

Job Sharing:

Job sharing allows two employees to share one full time job.  Sometimes an employer cannot find a person to work full time but can find two employees who can share the tasks which often happens in businesses that hire from an employee pool including students, mothers and seniors.  The benefit of this to the employer is that they often do not have to pay the same benefits to part time workers that they pay to their full time staff thereby saving on overhead.   The downside is that the employer will responsible for coordinating the work between the two employees to make sure that all the required tasks are completed and that everyone is on the same page.

Although flexible working comes with advantages and disadvantages for both employers and employees these arrangements were becoming more popular but the outbreak of Covid-19 has seen an  unprecedented move from office to home working.  It will now remain to be seen how many companies will continue to have their employees working remotely.

From an article by Alyssa Gregory

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