Walter, who lives in Toronto, Ontario, is the sole shareholder and sole director of Walts Foods Inc., which is a CCPC carrying on an active business in the Province of Ontario. Walts Foods Inc. has a GRIP balance (CRA Form T2 - Schedule 53) of $200,000, an LRIP balance of $200,000, and after-tax corporate cash on hand of $400,000. Walts Foods Inc. net active business income and taxable income for the December 31, 2023 taxation year will be less than the business limit, which represents the small business deduction amount.

In 2023, Walter requires a new automobile exclusively (100%) for personal use. He needs $56,500 in additional after-tax personal income to fund the cost, which includes 13% HST, of this acquisition and he seeks those funds from Walts Foods Inc. on January 1, 2023. Walters 2023 taxable income will exceed $235,675 prior to the receipt of these additional funds from Walts Foods Inc. for this purpose.

Question:

In the alternative, Walts Foods Inc. is considering the acquisition on January 1, 2023, of a new automobile at a cost of $56,500, including 13% HST, which would be made available to Walter for his exclusive (100%) personal use for the entire 2023 taxation year. What would be the amount of the standby charge taxable employment benefit to be included when calculating Walters employment income for the 2023 taxation year? The numerical answer alone is sufficient. No calculations need be shown (CPAO 2017)