Just like other businesses, healthcare practices across the country are facing financial stress, and unprecedented change due to COVID-19. Chris Gandhu, High Net Worth Planner, TD Wealth, joins Kim Parlee to help answer questions coming from health care practitioners across the country.
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[MUSIC PLAYING]
- Hello and welcome to the MoneyTalk COVID-19 Daily Bulletin from Monday, May 11th. I'm Anthony Okolie. In a few minutes, Kim Parlee will be speaking with Chris Gandhu, High Net Worth Planner with TD Wealth, about some of the financial challenges that health care practitioners are facing, especially if they own their own practice. Chris will answer some of the key questions they have on this week's Ask MoneyTalk. But first, a quick wrap of today's headlines.
Ottawa has announced the next phase of economic aid called the Large Employer Emergency Financing Facility. It's meant to help the largest Canadian employers avoid company bankruptcy due to COVID-19. The government also unveiled plans to expand business credit to mid-sized companies.
Meanwhile, a US think-tank is forecasting that US goods to China will come in at $60 billion for 2020, significantly lower than the $186 billion required by the phase one trade deal. President Donald Trump said he was very torn about whether to end the agreements.
More companies announced reopening measures as countries begin to ease lockdown restrictions. Apple announced plans to reopen US stores in select states this week, employing control such as temperature checks and store capacity limits. Meanwhile, theme park operators around the world are watching to see how Monday's reopening of Shanghai Disneyland with coronavirus controls plays out.
Coming soon to a theater near you, Amazon Prime movies. That could be a reality following reports that Amazon held talks to take over financially-troubled movie chain owner AMC Entertainment. And that's a wrap of today's headlines. Next, Kim Parlee's conversation with Chris Gandhu.
- They are hailed as heroes, but even heroes need help during this pandemic, just like other businesses, doctors, dentists, and other health care practitioners across the country are feeling financial stress and the effects of unprecedented change. So on this Ask MoneyTalk, we're asking questions and answering questions about their practices-- how to keep them going and how to work with patients' needs while physically distancing.
Chris Gandhu joins us from Calgary to answer these questions. And Chris, our first question is, "I have big loans that I used to get my practice started. We are closed. We are not billing right now. What should I do?"
- Right. That's a tough spot to be in, Kim. And I think there are a few options to consider. If you would recall, one of the first reliefs that came out because of COVID-19 and quarantine was mortgage relief. That was intended generally for individual homeowners, but most lenders have extended similar relief for businesses.
So if you have a business loan or a line of credit, go talk to your lender. It is all determined on a case-by-case basis, but you can get relief where you don't have to make your principal payments and you can make interest-only payments for perhaps three, four, five months, or longer. So that's an option to help you with the cash flow.
The second thing is the Canada Emergency Business Account. This is an important and a big one, where you get $40,000 interest-free money. And if you make the required repayments on time, in fact, $10,000 of that loan is forgivable, so that's nice to help with the business expenses.
And finally, actually, one thing that you should be aware of with the CEBA-- the business account-- is that there is a qualifying criteria. You have to have payroll on the minimum end of $20,000 for 2019, on the high end of $1.5 million. So as long as your business fits that criteria, fantastic.
Finally, you could also look at a very new program that was just released at the tail end of April that is the Canada Emergency Commercial Rent Assistance. And if you qualify for this-- and the qualification criteria is that your revenue because of COVID has to be impacted by 70% or more negatively-- so if you qualify, then you'll get a 75% rent relief, as long as your rent was $50,000 or less per month.
So the nice thing is that all of these aren't-- you don't have to pick one or the other. You can, in fact, qualify for all three.
- Great insight. The next question, and we have a bunch-- "my practice is currently closed. How do I keep paying my staff?"
- Right, that's an important one here. And probably, the program that's most applicable to you is the Canada Emergency Wage Subsidy. Now, the benefits of the wage subsidy are that 75% of the wages that you'll be paying to your employees will be subsidized up to a maximum. The maximum is $847 per week. On top of that, again, if you meet the qualifying criteria, some of the employer's CPP and EI contributions are also covered by the wage subsidy.
The program is intended to last for 12 weeks. That's sort of mid-March till the early part of June. And really, it's very broad applicability. You could be any business, in any industry. As long as your revenue is impacted 30% or greater by COVID, you should qualify.
- A nuanced part for some of the things that you said earlier, but here's one-- "I'm a physician with a professional corporation. I'm not working due to COVID-19. Should I claim the CERB or the wage subsidies?"
- Right. so CERB is the Canada Emergency Response Benefit. And the wage subsidy, of course, we've just talked about. I guess, Kim, I won't make the decision for you, but I'll certainly give you the information that will enable you to make a decision whether you choose one or the other. So the wage subsidy is obviously subsidizing the employer. So as long as you're paying yourself through the professional corporation via payroll, you could choose either the wage subsidy or the CERB-- the response benefit. That's the first thing to realize is that one's an individual program, one is sort of based for employers.
The next thing is that to qualify for the CERB, you have to not voluntarily, but because of COVID, cease employment, cease work. In fact, it doesn't have to be employment. You could be self-employed as well. You have to make in the 12 months leading up to your application, at least $5,000 or more. And in this four-week period, because you sort of reapply for the CERB for every four weeks, the most you can earn is $1,000 for you to be able to get this additional benefit.
There's also a difference in the quantum of the benefits. As we just talked about under the wage subsidy, the employer gets subsidized so they can pay their employees up to a maximum of $847 a week. Under the CERB, what you get is $2,000 for every four weeks.
And finally, there is a difference in timing. Again, this is all subject to change, but the wage subsidy is currently intended to last for 12 weeks, like I said, mid-March to early June. And the CERB has a 16-week timing, so four months.
- Good insight. Lots of options. And you're right, people have to figure out which one works best for them and their specific situation. Next question, "I'm a dentist. Will insurance cover my losses during the shutdown?"
- That's a bit of a loaded question, Kim, because obviously, there are some legal aspects to that, so it depends really on your business interruption policy and what clauses are included in that policy. You may have had a policy that had a specific pandemic coverage. And if that was the case, then you're lucky because I think you do have a leg to stand on. In fact, just a few weeks ago, it was in the media that a certain insurer was going to cover business interruption insurance where dentists had particular pandemic coverage included in the policy.
If you happen to have business interruption policy that doesn't have the pandemic-specific clause and you simply have general business interruption insurance, then I think it's probably a tougher argument to make, but I would say that everything is very fact specific. And that's where you want to talk to your own lawyer and determine if the facts meet the law.
- Last question for you, Chris. Great information. "How can I keep my practice relevant during and after the COVID-19 shutdown?" And I guess it's how do you, again, keep seeing patients? How do you make sure that you're still in business and able to service your clients?
- Yeah, I think that really is a very good question because as we look forward, I mean, it's an understatement that society is going to change in so many ways. And our telepresence interview here is just one example. And when I look at the physicians and their clients, I think asking for telemedicine, which is now being forced upon us, is likely going to be a lasting impact for change.
And with that, it brings certain challenges. So to be relevant, obviously, I would say to all the physicians out there to be ready for that. From an infrastructure point of view, make sure you have the software and the back-end infrastructure support to be able to do that telemedicine regularly.
And of course with that, I think there is a silver lining. There are some benefits that come for the physician. You can probably be more efficient. You might be able to see more patients during your work day because of telepresence. You might, in fact, need a smaller office space because now, you don't need a large waiting area upfront because people are waiting in their house. So there's some efficiencies that arise because of this as well.
I also sort of see our dentists and allied health professionals-- those individuals with those businesses that rely a lot on employer-sponsored medical plans to bill-- I think for them, the road to recovery is probably a bit longer because we might not get back to full employment or pre-COVID employment as quickly as we think we ought to. So because of that, we may see less clients visiting those businesses.
So generally for everybody, but especially for those allied health professionals, I think you have to innovate, you have to be lean, and you have to be efficient in these times.
- Chris, always great talking to you. Great insights. We'll talk to you again really soon. Take care.
- Thank you, Kim.
[MUSIC PLAYING]
- Hello and welcome to the MoneyTalk COVID-19 Daily Bulletin from Monday, May 11th. I'm Anthony Okolie. In a few minutes, Kim Parlee will be speaking with Chris Gandhu, High Net Worth Planner with TD Wealth, about some of the financial challenges that health care practitioners are facing, especially if they own their own practice. Chris will answer some of the key questions they have on this week's Ask MoneyTalk. But first, a quick wrap of today's headlines.
Ottawa has announced the next phase of economic aid called the Large Employer Emergency Financing Facility. It's meant to help the largest Canadian employers avoid company bankruptcy due to COVID-19. The government also unveiled plans to expand business credit to mid-sized companies.
Meanwhile, a US think-tank is forecasting that US goods to China will come in at $60 billion for 2020, significantly lower than the $186 billion required by the phase one trade deal. President Donald Trump said he was very torn about whether to end the agreements.
More companies announced reopening measures as countries begin to ease lockdown restrictions. Apple announced plans to reopen US stores in select states this week, employing control such as temperature checks and store capacity limits. Meanwhile, theme park operators around the world are watching to see how Monday's reopening of Shanghai Disneyland with coronavirus controls plays out.
Coming soon to a theater near you, Amazon Prime movies. That could be a reality following reports that Amazon held talks to take over financially-troubled movie chain owner AMC Entertainment. And that's a wrap of today's headlines. Next, Kim Parlee's conversation with Chris Gandhu.
- They are hailed as heroes, but even heroes need help during this pandemic, just like other businesses, doctors, dentists, and other health care practitioners across the country are feeling financial stress and the effects of unprecedented change. So on this Ask MoneyTalk, we're asking questions and answering questions about their practices-- how to keep them going and how to work with patients' needs while physically distancing.
Chris Gandhu joins us from Calgary to answer these questions. And Chris, our first question is, "I have big loans that I used to get my practice started. We are closed. We are not billing right now. What should I do?"
- Right. That's a tough spot to be in, Kim. And I think there are a few options to consider. If you would recall, one of the first reliefs that came out because of COVID-19 and quarantine was mortgage relief. That was intended generally for individual homeowners, but most lenders have extended similar relief for businesses.
So if you have a business loan or a line of credit, go talk to your lender. It is all determined on a case-by-case basis, but you can get relief where you don't have to make your principal payments and you can make interest-only payments for perhaps three, four, five months, or longer. So that's an option to help you with the cash flow.
The second thing is the Canada Emergency Business Account. This is an important and a big one, where you get $40,000 interest-free money. And if you make the required repayments on time, in fact, $10,000 of that loan is forgivable, so that's nice to help with the business expenses.
And finally, actually, one thing that you should be aware of with the CEBA-- the business account-- is that there is a qualifying criteria. You have to have payroll on the minimum end of $20,000 for 2019, on the high end of $1.5 million. So as long as your business fits that criteria, fantastic.
Finally, you could also look at a very new program that was just released at the tail end of April that is the Canada Emergency Commercial Rent Assistance. And if you qualify for this-- and the qualification criteria is that your revenue because of COVID has to be impacted by 70% or more negatively-- so if you qualify, then you'll get a 75% rent relief, as long as your rent was $50,000 or less per month.
So the nice thing is that all of these aren't-- you don't have to pick one or the other. You can, in fact, qualify for all three.
- Great insight. The next question, and we have a bunch-- "my practice is currently closed. How do I keep paying my staff?"
- Right, that's an important one here. And probably, the program that's most applicable to you is the Canada Emergency Wage Subsidy. Now, the benefits of the wage subsidy are that 75% of the wages that you'll be paying to your employees will be subsidized up to a maximum. The maximum is $847 per week. On top of that, again, if you meet the qualifying criteria, some of the employer's CPP and EI contributions are also covered by the wage subsidy.
The program is intended to last for 12 weeks. That's sort of mid-March till the early part of June. And really, it's very broad applicability. You could be any business, in any industry. As long as your revenue is impacted 30% or greater by COVID, you should qualify.
- A nuanced part for some of the things that you said earlier, but here's one-- "I'm a physician with a professional corporation. I'm not working due to COVID-19. Should I claim the CERB or the wage subsidies?"
- Right. so CERB is the Canada Emergency Response Benefit. And the wage subsidy, of course, we've just talked about. I guess, Kim, I won't make the decision for you, but I'll certainly give you the information that will enable you to make a decision whether you choose one or the other. So the wage subsidy is obviously subsidizing the employer. So as long as you're paying yourself through the professional corporation via payroll, you could choose either the wage subsidy or the CERB-- the response benefit. That's the first thing to realize is that one's an individual program, one is sort of based for employers.
The next thing is that to qualify for the CERB, you have to not voluntarily, but because of COVID, cease employment, cease work. In fact, it doesn't have to be employment. You could be self-employed as well. You have to make in the 12 months leading up to your application, at least $5,000 or more. And in this four-week period, because you sort of reapply for the CERB for every four weeks, the most you can earn is $1,000 for you to be able to get this additional benefit.
There's also a difference in the quantum of the benefits. As we just talked about under the wage subsidy, the employer gets subsidized so they can pay their employees up to a maximum of $847 a week. Under the CERB, what you get is $2,000 for every four weeks.
And finally, there is a difference in timing. Again, this is all subject to change, but the wage subsidy is currently intended to last for 12 weeks, like I said, mid-March to early June. And the CERB has a 16-week timing, so four months.
- Good insight. Lots of options. And you're right, people have to figure out which one works best for them and their specific situation. Next question, "I'm a dentist. Will insurance cover my losses during the shutdown?"
- That's a bit of a loaded question, Kim, because obviously, there are some legal aspects to that, so it depends really on your business interruption policy and what clauses are included in that policy. You may have had a policy that had a specific pandemic coverage. And if that was the case, then you're lucky because I think you do have a leg to stand on. In fact, just a few weeks ago, it was in the media that a certain insurer was going to cover business interruption insurance where dentists had particular pandemic coverage included in the policy.
If you happen to have business interruption policy that doesn't have the pandemic-specific clause and you simply have general business interruption insurance, then I think it's probably a tougher argument to make, but I would say that everything is very fact specific. And that's where you want to talk to your own lawyer and determine if the facts meet the law.
- Last question for you, Chris. Great information. "How can I keep my practice relevant during and after the COVID-19 shutdown?" And I guess it's how do you, again, keep seeing patients? How do you make sure that you're still in business and able to service your clients?
- Yeah, I think that really is a very good question because as we look forward, I mean, it's an understatement that society is going to change in so many ways. And our telepresence interview here is just one example. And when I look at the physicians and their clients, I think asking for telemedicine, which is now being forced upon us, is likely going to be a lasting impact for change.
And with that, it brings certain challenges. So to be relevant, obviously, I would say to all the physicians out there to be ready for that. From an infrastructure point of view, make sure you have the software and the back-end infrastructure support to be able to do that telemedicine regularly.
And of course with that, I think there is a silver lining. There are some benefits that come for the physician. You can probably be more efficient. You might be able to see more patients during your work day because of telepresence. You might, in fact, need a smaller office space because now, you don't need a large waiting area upfront because people are waiting in their house. So there's some efficiencies that arise because of this as well.
I also sort of see our dentists and allied health professionals-- those individuals with those businesses that rely a lot on employer-sponsored medical plans to bill-- I think for them, the road to recovery is probably a bit longer because we might not get back to full employment or pre-COVID employment as quickly as we think we ought to. So because of that, we may see less clients visiting those businesses.
So generally for everybody, but especially for those allied health professionals, I think you have to innovate, you have to be lean, and you have to be efficient in these times.
- Chris, always great talking to you. Great insights. We'll talk to you again really soon. Take care.
- Thank you, Kim.
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