Today unofficially marks six months since the coronavirus stopped us in our tracks. March 12 was the morning after the NBA decided to postpone its season, setting off a chain of events that has kept most of us away from the office and from each other. Nowhere has this been more felt than in schools, with March Break extending into a six-month “corona break”—at least, that’s what we called it in our house.

Although the number of cases is once again ticking upward, there are signs of life beginning to emerge. This week, I heard kids playing in a nearby playground during school recess, a sound I hadn’t realized I’d missed until I heard it again. A special thank you to all the teachers out there who are back on the front lines this week, not only putting their own safety at risk, but also managing the time and attention of children who haven’t had a real routine in six months. I wish you luck as I drop my son off at school and sprint in the other direction.

As thrilled as I was to feel a semblance of normalcy for the first time in a long time, I’m also becoming increasingly concerned that we’re at the beginning of a long, cold winter. While Canadians are saving in record numbers––the likes of which we haven’t seen since 1982, when interest rates were almost 20 per cent––with government benefits waning and mortgage and tax deferrals coming due, there may be some pain coming. 

Nowhere is this more acute than with the Canada Emergency Response Benefit (CERB). It was rolled out with the announcement that qualifying Canadians were getting $2,000 in their pockets every month. But it wasn’t clearly communicated as a taxable benefit, requiring that recipients pay taxes on those funds next year. So for someone who lost their job early in the pandemic relying on the $2,000-a-month support from the 28-week period of the program, they may not know that—assuming they’re in the lowest tax bracket, earning less than $47,630 this year—they’ll end up owing $2,100 on the $14,000 total benefit. 

“It could come as a very unpleasant surprise for hundreds of thousands and maybe millions of Canadians,” parliamentary budget officer Yves Giroux told me this week. Giroux’s job is to forecast what the federal government’s programs will cost. Giroux’s office estimated that the total cost of the CERB would be $71.3 billion; however, that number includes the revenues from income-tax collection. If Canadians who received the CERB can’t pay their taxes, the cost will go up. 

I reached out to the government departments responsible for the CERB, asking for an update on what they’re expecting the program’s true cost will be. Employment and Social Development Canada’s Megan Fulton didn’t directly answer my question on what revenue the government expects to receive from income taxes connected to CERB, but she did suggest it has no plans of waiving the amount. 

“The Government of Canada has stated from the beginning that CERB payments will be included in taxable income.” 

Fred O’Riordan, a former public servant and tax specialist who now works for EY Canada, commended the government for getting money out the door quickly, but shared Giroux’s concern that people may not realize the benefit was taxable.

“Most of us are not self-employed and we have source deductions … including income tax, and so you get familiar with that and don’t even think about tax liabilities at filing time.” O’Riordan told me. “What you want to avoid are unpleasant surprises at filing time.” 

According to the latest figures provided by the Government of Canada, as of September 6, $76.4 billion in CERB payouts have been sent to almost nine million Canadians since the program began. That works out to an average of around $8,735 in taxable benefits per applicant so far. Put simply, CERB recipients in the 15 to 25 per cent tax bracket can expect a tax bill next April in the range of at least $1,310 to $2,183—the rough equivalent of one of the CERB payments they received over the year. 

While not an insurmountable amount given the historic savings Canadians have under their mattresses, for the approximately one in three adults who have taken advantage of the CERB, it could be enough to depress discretionary spending even further come April, just as we are trying to pull through a winter of economic malaise and uncertainty.