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IS CANADA IN A RECESSION: OUR 9 EASY STEPS TO SOLVE COVID-19 INDUCED FINANCIAL PROBLEMS

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.
If you would prefer to listen to the audio version of this is Canada in a recession Brandon’s Blog, please scroll to the very bottom and click on the podcast.
is canada in a recession
is canada in a recession
Is Canada in a recession introduction

One question that people are searching online for answers is: Is Canada in a recession? Last month I wrote a blog titled Canada in recession: Will the economy fall into a great depression? In that blog, I described the views of Nouriel Roubini is a world-known economist and a professor of economics at New York University’s Stern School of Business. He has some stark current thoughts on just how bad the Canadian economy can go. I invite you to again read that blog to see what his thoughts are.

That blog accepted the signals that Canada is in a recession. The purpose of this Brandon’s Blog is to take a step back and answer the question: Is Canada in a recession?

Is Canada in a recession? What is a recession?

To begin to answer is Canada in a recession, we first need to understand what a recession is.

A recession is a short-term period of overall economic decline. Economies go via cycles, which implies there are periods of growth as well as durations of decline. The COVID-19 pandemic has actually thrust our economic climate into a decrease, a lot like just how a considerable, unanticipated expense can upend your own household budget plan.

The federal government identifies when our economy has actually entered a recession and when it has left by measuring key economic signals. These signs are sensitive to what happens locally and internationally. They include, for circumstances, declines in various industry sectors, agriculture or manufacturing, and also disruptions to international trade.

The C.D. Howe council defines a recession as a pronounced, persistent, and pervasive decline in total economic activity. It considers both GDP and employment as its major rulers. Is Canada in a recession? It stated that Canada is formally in an economic crisis and recession.

What did some economists forecast about is Canada in a recession

Economists were checking out financial indicators of the health of the Canadian economy near the end of 2019 and very early in 2020 to try and forecast the future. So, what were economists saying about is Canada in a recession?

What some economic experts were predicting prior to the coronavirus pandemic was that they really did not assume we would see one this year. However, on the other hand, last October David Rosenberg, chief economist at Gluskin Sheff & Associates, assumed there would certainly be an 80% chance of an economic downturn coming to Canada this year.

The complete level of its economic impact will certainly not be known for some time. It seems clear to economists that the United States will certainly go into an economic downturn in 2020 if it hasn’t already. Since 1970, Canada has experienced economic crises at roughly the very same time as the USA, showing the interconnectedness of the two economies. So it appears that all of North America is in a recession.

How bad will Canada’s COVID-19 recession be?

Canada is only now seeing the tip of the economic iceberg from COVID-19. It is clear that its economic effect will be like nothing seen since the Great Depression. Economists state the overview for employment and the economic climate will be stark. The only silver lining may be that the deepness and suddenness of the decrease might offer hope for a fast rebound.

As I previously reported, Dr. Roubini thinks there are pressures that not only would make is Canada in a recession, but it could go into a depression! His view is that there is going to be a U-shape recuperation due to the fact that this is an international shock. Both households and businesses will need to invest less and save more. Precautionary savings are most likely to go higher. Income is most likely to be lower. This will convert into much less business capital spending. He claims there will certainly be a worldwide investment slump due to a global savings excess.

How long will this is Canada in a recession last?

The rapid spread of coronavirus led to unprecedented personal, the social, and economic impact that caught the world largely unprepared. Although the government of Canada responded decisively with programs and grants to lessen the economic devastation, the recovery period remains to be seen. And by most indicators, this downturn is looking like a long and steep uphill climb.

If we’re looking specifically at negative growth, then economists anticipate that this trend won’t continue for long. There are 2 reasons:

  • Lockdown mandated by the government. Whatever was closed down by government mandate which takes place much faster than a shutdown due to economic issues.
  • Government bailouts. The government is supporting the whole economy. Yes, we’ll need to pay back the government in taxes eventually yet that can only occur when the economy is recovering. This suggests that economic growth will certainly be slower.

Parliament budget officer Yves Giroux believes that the Canadian deficit this year will strike $256 billion, consisting of a 6.8% decline in economic development, the most awful showing since the 1981-1982 economic recession.

Is Canada in a recession? Are there any predictors of a recession recovery?

Indicators like stagnant salaries, low home financial savings, as well as high consumer financial debt, don’t predict economic crises, yet they do forecast just how challenging the healing will be when an economic downturn hits. Below are some signs and symptoms that can indicate a recession:

  • the surge in joblessness;
  • an increase in bankruptcies;
  • defaults or repossessions;
  • the falling rate of interest;
  • reduced consumer spending;
  • decreased consumer confidence; and
  • falling asset prices.

A healthy and balanced labour market as well as a turnaround in the housing sector helped the Canadian economy expand at a modest rate in 2019. This supports the contention that in order to come out of an economic downturn, companies and consumers need to feel confident to invest and spend.

What can you do when is Canada in a recession

If you believe the answer to the question is Canada in a recession is yes, after that there are several things that you can do. I have written on these problems before under several headings such as financial literacy, household debt and the benefits of having an emergency savings fund on hand in case of, well, an emergency situation.

You can’t regulate the country’s economic climate, yet you can control your very own. Every person requires to take a look at:

  • Using this time to examine your overall household budget and figure out some practical yet difficult goals for your cash.
  • This is the time to live according to your emergency situation budget and look at what your typical spending plan will certainly resemble once you are back to work.
  • Consider your typical budget based upon what it looked like before COVID-19 hit and the insights you’ve gotten around your spending behaviours since you’re living more frugally.
  • Making a plan to eliminate credit card debt. Try to find a no or extremely reduced rate of interest balance transfer charge card to transfer the balance to if you have some credit card financial debt lingering around.
  • A strategy to include a savings element in your family budget will aid to shield you when you face a reduction or a full loss of your earnings.
  • Dealing with the pandemic as a wake-up call to recession-proof your funds. If your income was impacted by the pandemic, what length of time could you have survived had the government, banks and other financial institutions and different corporations not actioned in with procedures to get cash back into your wallet through deferrals?
  • Can you work at a couple of jobs that amount to providing you with a full-time revenue? This might first take some efficient networking before you can discover the appropriate mix of work.
  • Have an emergency fund all set up. It will go a long way to helping you weather a recession.
  • No matter your current scenario, the very best way to recession-proof you and your family is with an emergency savings account.

In the post-COVID years, there is a likelihood that lenders will be stingier with exactly how much cash they loan to customers. So guarantee that your budget permits constant debt repayment when you resume a stable income that resembles your pre-coronavirus income level.

That is exactly why it is crucial to focus on your financial situation now and take steps to guarantee your long-term personal financial stability.

Is Canada in a recession summary

It certainly feels that way. I hope you found this is Canada in a recession Brandon’s Blog informative. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

 

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CORONAVIRUS RISKS INCLUDE THE CANADIAN ECONOMY

coronavirus risks

If you prefer to listen to an audio version of this Brandon’s Blog, please scroll to the bottom of this page and click on the podcast.

Coronavirus risks introduction

The COVID-19 is spreading out across the world. The unique coronavirus is becoming an international pandemic. COVID-19 is the breathing illness triggered by the novel coronavirus that came from Wuhan, China. The fast-spreading infection has actually killed more than 3,000 people as well as hitting at least 90,000, so far mostly in China. The disease is coming to North America right now in airports and on cruise liners. This Brandon’s Blog is to talk about the coronavirus risks and discuss why Canadians and the Canadian economy is not immune.

Coronavirus explained

Coronavirus is spread out primarily via tiny droplets coughed or sneezed straight from a contaminated individual right into the face of a person close by. The spreading is different than the more infectious air-borne transmission of the virus-like measles, which can stay suspended in enclosed areas and be taken in hours after being exhaled by ill people.

Surgical face masks do not offer a proper seal around the face so while it does secure from respiratory system droplets from a sneeze or a cough, the microbe is still present in airborne droplets that can navigate out of a medical mask. The spread of the illness is proceeding and Canadians are appropriately asking themselves how they can get security against the infection. Children who obtain the infection frequently show light symptoms and some have none. The reported cases of major illness, as well as death up until now, are in adults.

Coronavirus prevention needs a global response

Coronavirus has demanded a global public health reaction. Countries are putting out daily updates on coronavirus dangers. Strains of a brand-new infection are spreading out. We do not yet know how to deal with the brand-new germ, and we won’t know till more information can be found by the experts. An additional vital unknown is exactly how infectious the coronavirus is.

The Globe and Mail report states that the coronavirus is circling around the planet and showing the dangers of the globalization design. The ailment is creating a great deal of anguish around the world. This pathogen is a little bit of a strange illness since it’s not assaulting youngsters. Up until now, at least 95,000 persons have actually acquired the disease, with about 3,300 having passed away from it. The deaths have been up until now mainly in China. But right here is a less-recognized reality. The incubation period of this coronavirus is generally under two weeks, yet certain reports suggest it often can take 3 weeks.

Coronavirus has actually infected greater than 80 countries. After starting in China, this illness is currently spreading out quickly around the world. The introduction of a novel coronavirus has actually clearly demonstrated the coronavirus risks and the need for clear, timely, and verifiable details from reliable sources.

A look at just how prevalent this pandemic is can be shown by various stories like:

  1. The variety of people who have tested positive in New York state for the unique coronavirus has increased to 22 after a substantial boost in screening, Governor Andrew Cuomo has actually said.
  2. Florida authorities reported that two people that tested positive for the brand-new coronavirus have passed away.
  3. South Africa’s news that an instance of coronavirus has been validated in the nation makes it the 3rd sub-Saharan country to report the infection.
  4. The United States has asked Iran to release all Americans from its prisons on clinical furloughs over anxieties the coronavirus might be infesting the country’s prisons.
  5. Paramedics in protective clothing and Israelis putting on masks and medical gloves stand near a dedicated polling station where people under quarantine from the coronavirus can vote in Israel’s nationwide political election, in Tel Aviv.
  6. The results of the coronavirus can be seen in Tokyo.
  7. A second person in England that tested positive for coronavirus has died, the UK’s Chief Medical Officer verified.
  8. California Gov. Gavin Newsom said the cruise liner Grand Princess would continue to be kept offshore until travellers and crew experiencing signs and symptoms that may follow the coronavirus can be tested to figure out whether they have it.
  9. Individuals wait outside the new medical exam department on the grounds of the Charite University Hospital campus Virchow in Berlin, where people seeking help from the coronavirus can be checked.
  10. Iran claimed the coronavirus has caused the death of 124 individuals amid 4,747 validated cases in the Islamic Republic as authorities cautioned they might use force to limit travelling between cities.

Coronavirus information – Canada

Coronavirus in Canada does run the risk of becoming a pandemic if the rate of community spread contracting the virus without entering contact with somebody from an infected region significantly rises. The coronavirus has thus far had health consequences for a fairly small number of Canadians. There are thus far 57 validated cases in Canada, many involving people that have actually recovered. This number changes daily.

Mostly all of the destinations Canadians usually take a trip to are extremely secure. The government of Canada’s advisories currently impacts just a few of the destinations.

Obviously China, along with:

  • Hong Kong
  • Iran
  • Japan
  • North Italy
  • Singapore
  • South Korea

Canadian experts believe age, as well as health background, might play the biggest roles in identifying how the unique coronavirus can affect an individual. Local transmission of the coronavirus in Canada is so far person-to-person spread within areas in Canada.

Covid-19 and the Canadian economy

The Canadian economy will certainly be negatively influenced by this infection, similar to all other world economic climates. International Monetary Fund stated the international financial expectation has actually changed to even a more dire situation. The coronavirus has actually enhanced the risk of a worldwide recession this year, credit rating firm Moodys stated. It looks likely that the coronavirus will do significant economic damage.

The coronavirus will lead global economies into its first contraction in a decade, some economic experts are warning. Coronavirus is currently requiring companies to put on hold manufacturing in and shipments from China as officials attempt to restrict its spread. At the same time, the IMF claimed the spread of the coronavirus has actually erased assumptions of stronger financial growth this year. It will cause the 2020 worldwide economic gains to its slowest pace since the economic crisis in 2008.

With monetary markets uneasy, the United States Fed’s change of mind on decreasing interest rates is totally reasonable. The coronavirus risks have brought about a dramatic downturn in the stock market. It has fanned worries of financial tanking as the Republican president asks Americans for a second term. As it worries the US economy, the Canadian economy follows the same path.

The coronavirus will injure Canada’s economy. The rapid spread of the coronavirus is most likely to send the global economy right into a downturn, according to prominent Canadian economist David Rosenberg. Bank of Canada Governor Stephen Poloz said in his newest speech that coronavirus will certainly interrupt the global economy for at the very least the first half of this year. The half a point decrease of the Bank’s key rate target to 1.25 percent marked the initial cut since the summer of 2015 and brought the rate to its lowest level since early 2018.

On March 5, Prime Minister Justin Trudeau said a pavlovian response to the unique coronavirus will not keep Canadians safe. The federal government is attempting to stop an economic downturn from something they cannot manage; the coronavirus that’s going to affect the whole world’s economy. Financial experts think the Bank of Canada’s decision to reduce the target interest rate shows the coronavirus has revealed a pocket of weakness in the Canadian economy. Markets have actually withstood roller-coaster ups as well as downs for weeks amid unpredictability over how much damage the outbreak of the new coronavirus will do to the global economy.

New data on China suggests the damage coronavirus has actually wrought on the globe’s second-largest economic engine could be even worse and a lot more extended than previously anticipated. My fear is the Canadian reaction will be insufficient to mitigate the negative financial influence the coronavirus is having on worldwide financial markets. The best-case scenario is that the Bank of Canada’s emergency rate cut will prove to be an over-reaction from the policymakers.

The coronavirus is now beginning to have a devastating influence on world markets, manufacturing and supply chains. It will eventually impact the labour force. Investors are really hoping that policymakers will take crucial action to limit the pain. If reduced business causes layoffs in Canada and elsewhere, the economy will slow down even faster.

Coronavirus is damaging the international airline and hotel sectors as business and leisure trips are being cancelled. Economists are asking whether lowering interest rates is the correct way to counter the negative economic influence from the coronavirus. The SEC is concerned about what the effect will be on new issuers and investors.

Coronavirus may force the Alberta government to ditch a balanced-budget plan, said Premier Jason Kenney. In the United States, economists are urging the President to right away rescind all of his tariffs and also dedicate to markets and as trading partners that no brand-new tariffs will be applied at least until the economic damage from the coronavirus has passed. Markets will continue to be volatile until the coronavirus is brought under control. Canadians are really concerned that the coronavirus has the potential to erase the value of their retirement funds.

The coronavirus is negatively impacting supply chain systems causing failures to deliver. Companies might get some protection if the force majeure section of supply contracts mentions that an epidemic or disease is an event beyond the parties’ control. The coronavirus may fall within that interpretation. In all instances, company problems will take months to return to business as usual. So even if the coronavirus is contained quickly, it is likely to negatively affect the economy for some time.

Coronavirus has forced travelling constraints, allegations between governments and a collection of misguided xenophobic attacks in many countries. Relying on the degree of human and financial damage this virus brings upon around the world, coronavirus may someday be considered a vital turning point for the whole global economy.

Just a few examples of economic damage that the coronavirus has already brought about are:

  • postponement of the three-day Ultra electronic dance music festival in Miami
  • the release of the next James Bond film delayed from April to November 2020
  • IBM cancelling a major event
  • the NBA announcing it is seriously studying the situation and playing games in empty arenas is a possibility under consideration. The television contract is so lucrative and attracts such a wide audience, allows for empty stadium games to be a serious possibility
  • Cancellation of business and vacation travel

The concern of whether it is appropriate to cancel or alter travel plans due to the spread of the coronavirus is mainly an individual decision that travellers have to make after evaluating all the realities available. No matter, Canadian life and the economic climate will certainly be various for the foreseeable future.

Summary

I hope you have found this coronavirus risks discussion useful. If you have any questions please feel free to contact us at any time.

Do you or your company have excessive debt and looking for debt restructuring? Is your business in trouble because of the effects of coronavirus on the Canadian economy? Would not it be great if you could do a turn-around?

The Ira Smith Team understands how to do a debt restructuring. More notably, we comprehend the requirements of the business owner or the person who has too much individual debt. Because you are dealing with these stressful financial issues, you are anxious.

It is not your fault you can’t fix this problem on your own. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will get you or your business back on the roadway to healthy and balanced worry-free operations and end the pain points in your life, Starting Over, Starting Now.

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DO BANK OF CANADA INTEREST RATE HIKE DATES AFFECT YOUR MONETARY POLICY?

Bank of Canada interest rate hike dates: Introduction

I have recently written blogs on debt help and signs you need bankruptcy help. I have ended recent blogs with a question: “Are you worried that the future interest rate hikes will make presently affordable commitments entirely unmanageable?”. So, I thought I would write this blog on Canada interest rate hike dates and what it all might mean in 2019.

Bank of Canada interest rate hike dates

The Bank of Canada (BoC) scheduled dates for the interest rate announcements for 2019 are as follows:

  • January 9
  • March 6
  • April 24
  • May 29
  • July 10
  • September 4
  • October 30
  • December 4

Bank of Canada interest rate hike dates: 2018

In 2018, it was expected that the BoC would raise interest rates slowly towards the end of 2018 and into 2019. The BoC has actually hiked its trendsetting rate of interest, which affects borrowing expenses across the economic climate, five times since the mid-2017, up from a reduced amount of 0.5 percent. The BoC interest rate stands at 1.75%. It was raised to that level in October 2018 and has not risen since.

Bank of Canada interest rate hike dates: 2019 issues

So the BoC on March 6, 2019, decided to keep its target for the overnight rate of 1.75%. Let me explain the main reasons why.

First, there is a slowdown in the worldwide economic climate. It has actually been extra obvious and more widespread than what they were preparing for. It is much more obvious and a lot more widespread than what the BoC was projecting as recently as January 2019! The higher adverse impact on the global economic situation affected their choice.

Second, global trade stress and unpredictability are weighing heavily on self-confidence and economic activity. There is tension worldwide on the trade front between several different scenarios, including Brexit and nations. This results in weakened consumer self-confidence and the confidence of the total worldwide economy. If the China/USA trade war is settled, the world economic scene might improve a bit.

Domestically in Canada, there are reasons they required to keep the BoC rate where it was:

  1. Exports fell short of expectations.
  2. Business investment did not reach the anticipated level.
  3. Consumer spending was weak.
  4. The housing market was soft.

Consumer spending is a big part of GDP and the cost of living in Canada. As well it has a huge influence on the Canadian economy. The Canadian real estate market is a high ticket item and there are plenty of industries that are affected by and depend upon a vibrant housing market. Each of those measures was either short of expectations or soft on its performance.

Based on both these worldwide and made in Canada influences that I have pointed out, the BoC determined they were going to keep their interest rate and not hike it. As recently as October 2018 the financial press was reporting that rates will gradually be climbing throughout 2019. Increased unpredictability is now introduced on the timing of future rate increases.

What about the rest of 2019

We might now go all of 2019 without any price rise. It depends on future occasions. I believe that there are four main variables to watch:

Core inflation continues to be near 2 percent. The Canadian consumer price index reduced to 1.4 percent in January, greatly as a result of lower oil prices. The BoC expects the cost of living index to be somewhat below the 2 percent target for the majority of 2019, reflecting the influence of short-lived variables, including the drag from reduced energy prices and a bigger output gap.

We will certainly see exactly how some of these variables may transform between now and the spring. For the July and succeeding rate statement dates, we will certainly have to see what the spring real estate market looks like. As I stated above, the real estate market is a large driver of both housing spending as well as consumer spending.

What it means for you

The reality is that the BoC overnight rate holding firm is great information if you were going to be buying a house this year. Five year fixed mortgage rates have actually declined somewhat in 2019.

If you have a variable rate home mortgage or line of credit/home equity credit line, the rate hold is likewise excellent news for you.

What about you?

Is the tension, stress, anxiety, and pain of your debt negatively influencing your health and wellness?

If so, call the Ira Smith Team today. We have years as well as generations of experience aiding individuals and companies needing financial restructuring. As a licensed insolvency trustee, we are the only professionals accredited and followed by the Federal government to provide debt restructuring options.

Call the Ira Smith Team today to make certain that we can begin aiding you. We will rapidly return you right into a healthy and balanced worry-free life. We can develop a debt settlement strategy simply for you to prevent bankruptcy, where we can also make the interest clock stop ticking away at you. By doing this, all your payments go only against the principal balance owing.

You can have a no-cost appointment for us to gather the necessary information to advise you on how to fix your debt difficulties. We can end your pain so that you will begin your clean fresh start, Starting Over Starting Now.

bank of canada interest rate hike dates

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CANADIAN INSOLVENCY LAWS: ALIENATION OF ASSETS

 

Canadian insolvency laws: Introduction

In today’s commercial world, our economy focuses on and requires Canadian insolvency laws. Insolvency is the financial condition where you cannot pay your debts as they come due and if you liquidated all of your assets, there would not be enough cash to pay off all of your debts.

Insolvency laws are required in a mature economy. It reassures investors that there is a way to “recycle” assets. Asset recycling makes them once again valuable and revenue producing, should insolvency set in on a person or company.

Canadian insolvency laws: My goal with this blog

An insolvency process is used as a means of liquidating one’s whole legacy (i.e. the totality of one’s assets) in order to attempt to please all of the creditors that have grown way beyond the ability of the person or company to repay. Emotions always run high in insolvency procedures. We are dealing with the lives of real people that may be losing their jobs, income, homes and other assets.

The purpose of this vlog is not to teach you about insolvency laws. I want to caution anyone considering going into business how important it is to structure things properly. Your aim is to make sure that you are protecting yourself, your business and your family. If your business falters and becomes insolvent you will be glad that you did.

Canadian insolvency laws: Believe it or not, it may be good for you to meet a licensed insolvency trustee

So naturally, as a licensed insolvency trustee (formerly called a bankruptcy trustee) the first focus is on restructuring. Sometimes bad things happen to good people and companies. Bad judgement, bad luck and bad management all contribute to personal and corporate insolvency. Our primary focus is to use various ways to help people and companies recover from insolvency.

The potential ramifications of insolvency procedures can be minimized. A person can no longer afford to keep their assets. A company has too many problems to continue its business. However, those same assets can be used very successfully in a new business or by someone else. So insolvency laws and procedures help to avoid a total loss of asset values.

In many of our cases, this can involve particular minor legal procedures which could eventually conserve a fortune. For financial institutions, this can be especially good news.

Canadian insolvency laws: Why you need to “alienate” your assets


If you are running a company, or are likely to do so in your career, you must minimize your exposure by safeguarding your assets. By doing so, you are protecting yourself and your family for the future, especially if something in business goes wrong. The time to protect yourself is when you are starting out and there are no problems. If you do so when the problems have already arisen, it is too late. Any asset protection steps you take knowing yourself to be insolvent, will not stand up to attack.

By running a company, you will probably become a Director. If your business needs to borrow money from the Bank to operate, you will probably be required to guarantee the bank debt. So, if you anticipate yourself collecting considerable unsecured financial obligations in the coming years, you need to act. Starting out properly protecting yourself, allows you to either avoid or successfully defend, any challenges on the sequestration of your assets.

Canadian insolvency laws: Why you want to be an “alien”

You will make sure that the properties you have “alienated” no longer form part of your estate. The alienation ensures that the possessions from which you will still benefit cannot be gotten by your financial institutions if the business is unsuccessful and they are looking for any assets you may have to honour the financial obligations you accumulate.what does a court appointed receiver do

Canadian insolvency laws: Use your lawyer


When setting up a company, you need a lawyer. Make sure that you choose a lawyer that can also counsel you on how to protect your assets in the event your business venture fails. We are not lawyers, and the general advice I am going to give you is not meant to replace the advice of a lawyer.

Canadian insolvency laws: You may need more than one company to conduct your business

The first thing to think about is incorporating a limited liability company. Depending on the type of business, you may need to incorporate several, within which to house your operations, the leased or owned premises you operate out of and your shareholdings. Conducting your business through a company will require more documentation and therefore cost.

However, it is well worth it. It removes and protects you personally to the greatest extent possible from personal liability. The goal is to minimize or eliminate the destruction of you and your family. If you choose not to go through a corporate body, for whatever reason, protecting your personal assets becomes even more important. There will not be one or more corporate entities to serve as the first line of protection.

Canadian insolvency laws: Examples of multiple corporations in running a business

Examples of how multiple corporations will better insulate you and your business assets are:

Operating company. Your operating company is the one you conduct business through. It is the vehicle which will attract the most liability. There is always a risk in running any business. However, there is no law that requires you to hold all your business assets in your operating company.

Single purpose corporation. You may want to incorporate a second single purpose company to hold valuable assets used to conduct the business of your operating company. Tangible assets such as machinery and equipment are obvious. You are operating out of premises; either leased or owned.

You may wish to have a corporation that holds the tangible assets. Another company that is simply the real estate company. If you also have valuable intangible assets such as copyrights, licenses, trademarks, you may wish a separate company to hold all of the intangible assets.

These single-purpose corporations will then lease the assets to your operating company to conduct its business. Your operating company will pay rental charges, lease payments and licensing fees to the respective sole purpose companies. You need your lawyer to carefully document in writing everything. By now you can probably see the value in separating out the various important and valuable assets from your normal business operations.

Canadian insolvency laws: Alienating your most valuable asset

The most significant and most important property most of us will own is our house. The time to transfer your ownership interest to your partner ideally is before the first day of your going into business. Waiting until there are business problems and you are insolvent, any transfer will be successfully attacked. Obviously, you have to believe that you and your partner have a solid loving relationship before making the transfer as you will no longer have your ownership interest in the house.

Canadian insolvency laws: Does your company have too much debt?

To set up your company and structure your affairs properly, we urge you to use the best lawyer for your needs. This blog cannot replace the advice of your lawyer. However, if your company is experiencing financial difficulties, you need a professional trustee. If yes, call the Ira Smith Team. Our approach for each file is to create an end result where Starting Over, Starting Now takes place. This starts the minute you are at our front door.

The earlier you contact us, the more options we will have to implement. Whether it is a corporate restructuring or personal debt settlement through a consumer proposal, the goal is to avoid bankruptcy. However, if bankruptcy turns out to be the best option, we can assist there too.

You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, ending the pain and stress you are feeling forever. Call Ira Smith Trustee & Receiver Inc. today for your free consultation.canadian insolvency laws 1

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CANADIAN CENTRE FOR POLICY ALTERNATIVES SAYS JOB AND ECONOMIC INSECURITY AFFECTING PROFESSIONALS

Canadian Centre for Policy AlternativesCanadian Centre for Policy Alternatives: Introduction

A survey released by the Canadian Centre for Policy Alternatives (CCPA) of one thousand Canadian professionals found that 20% are in precarious jobs. It’s not a surprise that job and economic insecurity is affecting professionals across the country when almost 50% of workers are living paycheque to paycheque (Canadian Payroll Association).

Canadian Centre for Policy Alternatives: Professionals are not immune

We often think that professionals armed with university degrees are immune from the economic woes that plague the rest of working Canadians. However, many professionals now find themselves in a new category of employment – precarious jobs.

A precarious job can be any type of work that is not permanent, has unpredictable income and doesn’t provide a retirement plan or sick days:

  • Freelance
  • Contract work
  • Part-time

Canadian Centre for Policy Alternatives: Survey results

If you think that highly educated professionals are not working in precarious jobs, think again. In today’s economy, the level of education and job security have nothing in common. According to the CCPA survey:

  • 58% of all professionals surveyed reported their job used to be more stable
  • 22% of professionals across Canada are now working in precarious jobs
  • 60% of precarious professionals are women
  • 60% of precarious workers don’t have pension plans or sick days
  • 50% of precarious workers report that their incomes vary significantly
  • 30% of workers in precarious jobs have a post-graduate degree
  • Ageism in the workplace. The highest percentage of precarious professionals fall in the 55+ category. As well, those with 10+ years in their profession are also on edge.
  • Professionals in precarious careers are twice as likely as those in a secure job to make less than $60,000 a year

It’s very difficult for precarious workers to plan ahead and get ahead. With an unstable income, it can be challenging to meet monthly expenses, let alone save for retirement. Many precarious workers are living off credit in between jobs just to stay above water, accumulating massive amounts of high-interest debt. After the credit cards have hit their limit, in desperation some resort to payday loans and a never-ending cycle of debt.

Canadian Centre for Policy Alternatives: Precarious jobs leads to financial stress

If you’re having trouble meeting your monthly expenses I urge you to seek professional help. Accumulating debt is not the answer to your problems. Make a no cost, no obligation appointment with Ira Smith Trustee & Receiver Inc. We’ll review your file and bring value added solutions that fit your unique issues and circumstances. Contact us today and Starting Over, Starting Now you’ll be able to put your financial woes behind you.

 

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Brandon Blog Post

TRADE AND DEVELOPMENT: BEING A PATRIOTIC CANADIAN CAN SAVE YOU MONEY

trade and developmentTrade and development: Introduction

We live in a time of interesting politics when it comes to trade and development. Unfortunately, due to the trade war between the U.S. and Canada, many products are now considerably more expensive. Since household debt is at record highs and many Canadians are already living paycheque to paycheque, the price hikes on popular products can cause a significant impact on your finances. The best way to keep your spending in check is to show your patriotism and buy Canadian.

Trade and development: The Canadian list

According to the Retail Council of Canada, this is a list of popular products that will cost you more if not sourced locally or from a country other than the U.S.:

  • Yogurt
  • Roasted coffee – not decaffeinated
  • Maple sugar and maple syrup
  • Licorice candy and toffee
  • Sugar confectionery
  • Chocolate in blocks, slabs or bars
  • Pizza and quiche
  • Cucumbers and gherkins
  • Strawberry jam
  • Orange juice, not frozen
  • Soya sauce
  • Tomato ketchup and other tomato sauces
  • Mayonnaise and salad dressing
  • Mixed condiments and mixed seasonings
  • Soups and broths
  • Waters, including mineral aerated waters containing added sugar or flavour
  • Whiskies
  • Manicure or pedicure preparations
  • Hair lacquers
  • Pre-shave, shaving or after-shave preparations
  • Preparations for perfuming or deodorizing rooms
  • Organic surface-active products and preparations for washing the skin
  • Automatic dishwasher detergents
  • Candles
  • Plastic sacks and bags
  • Tableware and kitchenware
  • Plywood, consisting solely of sheets of wood other than bamboo
  • Paper and paperboard
  • Toilet paper
  • Handkerchiefs, cleansing or facial tissues and towels
  • Tablecloths and serviettes
  • Printed or illustrated postcards
  • Printed greeting cards, with or without envelopes
  • Cast iron grills
  • Combined refrigerator-freezers
  • Dishwashing machines
  • Lawnmowers
  • Inflatable boats
  • Sailboats
  • Motorboats
  • Mattresses
  • Sleeping bags
  • Pillows, cushions and similar furnishings of cotton
  • Playing cards
  • Ballpoint pens
  • Felt-tipped and other porous-tipped pens and markers

Trade and development: Be a nationalist and save money

Many of these products are manufactured in Canada so perhaps this is a good opportunity to make mindful purchases, whether or not there is a trade war on. E.g. Quebec produces 72% of the world’s maple syrup, so why would we ever buy it from the States? President’s Choice has an extensive list of products that are manufactured in Canada. As a nation, we have a long tradition of making Whiskey, so if that’s your pleasure, try a Canadian brand. With a little research, you could become quite the expert in buying Canadian and save a lot of money in the process.

Trade and development: What to do if you have too much debt

If the spike in prices because of the tariffs could put a strain on you financially, then the time for professional help is now. Unfortunately, we can’t remove the tariffs, but can help you deal with debt. At Ira Smith Trustee & Receiver Inc. we believe that financial problems can be solved with immediate action and the right financial plan. You can put your financial problems behind you and live a debt free life Starting Over, Starting Now. We’re just a phone call away.

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Brandon Blog Post

#VIDEO: AVERAGE STUDENT LOAN DEBT: REASONS WHY WE PITY YOU#

The rise of average student loan debt

Average student loan debt is getting out of control. Post-secondary education is effectively a need for today’s labour market. According to the Canadian Federation of Students in its paper titled: “The Impact of Student Debt”, unfortunately, since the demand for education has inflated, public funding did not keep up. Public funding shortfalls have resulted in the increased cost of post-secondary education being borne by students.

The growth in average tuition fees

From 1990 to 2014, the national average tuition fees have seen an inflation adjusted increase of over one hundred and fifty per cent (150%). In Ontario, tuition fees have grown over one hundred and eighty percent (180%). For most students—often having spent very little time active within the workforce, other than for part-time work—funding their education has become more and more troublesome.

Students now taking on higher levels of average student loan debt

Many students are now taking on increased levels of debt for their education. Students requiring a Canada Student Loan currently graduate with an average student loan debt of over $28,000. Keep in mind that this is an average, with the costs of graduate education resulting in higher debt levels. Relying on debt to finance education suggests that there is a delay in the full impact of high tuition fees till after graduation—when interest begins to be charged.

Societal issues caused by rising average student loan debt statistics

This impact is now exacerbated by the effects of the most recent recession and the rising trend of precarious, and even unpaid, employment. The broader effects of high levels of student debt on both the person and the general economy are now resulting in various issues:

  • Young Canadians (15-24) accounted for over half of job losses over the last 5 years;
  • Un and under-employment can cost the Canadian economy over $22 billion by 2031;
  • In 2014, youth un and under-employment was twenty-seven per cent (27%);
  • Thirty per cent (30%) of medical students expect to graduate with over $100,000 in student debt;
  • Under-employment and work outside one’s field of study results in talent degradation, falling behind in ability, and lost networking opportunities;
  • Canada has seen a fifteen per cent (15%) growth in Canadians under the age of 30 who still live in their parent’s home since 1981;
  • Those with student debt have a fewer assets, savings or investments compared to debt-free peers.

Average student loan debt causes affect the Canadian economy

Starting out with huge debt and facing a weak labour market, this prevents graduates to fully take part within the Canadian economy. Student debt impacts career selections, even among professional school graduates in medicine and law. An estimate of unpaid internships is in the range of 300,000 graduates working with no pay.

Do you have too much debt? Then contact us now

If you are an individual or company who needs to free themselves from the stress and strain of too much debt, and especially if you have been told your situation is hopeless, Ira Smith Trustee & Receiver Inc. can prepare and carry out the plan made just for you, to free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.

Student loan debt has its own set of unique rules and complexities within the Canadian insolvency scheme. If you’re experiencing serious debt issues, contact a professional trustee for a free, no obligation consultation. The Ira Smith Team does not try to write new insolvency law or tax law. Rather, we will evaluate your situation within the existing statutes, and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy. Starting Over, Starting Now you can be debt free with the help of a professional, licensed trustee in bankruptcy. Contact us today.

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