Tag: justin trudeau

Categories
Brandon Blog Post

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.

Categories
Brandon Blog Post

CANADA FEDERAL BUDGET PLAN: RETIREE BANKRUPTCY PROTECTION REJECTED

Canada federal budget plan: Introduction

Like many Canadians, on March 19 I was watching to see if the Conservative Party would be successful or not in blocking Finance Minister Bill Morneau’s budget speech. In the end, the Liberals took the drop on Parliament by getting the budget introduced early, before the Finance Minister’s speech. That allowed the media in lockup to start broadcasting the details of the Canada federal budget plan before the Finance Minister gave his speech!

Canada federal budget plan: Retiree bankruptcy protection

I was also looking to see what the budget had in it about retiree bankruptcy protection. This matter has been in the news over the past two years. High profile insolvency cases such as Sears Canada and U.S. Steel Canada brought this matter to the forefront. I have written a few blogs on the topic of proposals to amend the Bankruptcy and Insolvency Act (Canada) (BIA) and the Companies’ Creditors Arrangement Act (Canada) (CCAA) to provide protection to retirees. This included private members’ bills introduced by Hamilton Mountain NDP MP Scott Duvall, Bloc Québécois MP Marilène Gill and Senator Art Eggleton, P.‍C.

As I have previously written, the issue for retirees (and current employees) relates to the employee health benefits plan and pension plan when a company enters into an insolvency administration. Insolvent companies have been allowed to put a moratorium on reimbursements to employees and retirees on valid health benefits claims. Also, the employee pension plan suffers a shortfall because the insolvent company has not made the required contributions. This automatically creates reduced pension benefits for retirees.

Pensions are delayed earnings. In either a bankruptcy or bankruptcy protection reorganization, there is generally nothing left for employees.

Given the recent high-profile insolvency cases, employees now recognize just how unsecure their pension plans and health benefits might be in the case of insolvency, reorganization or bankruptcy.

The Liberal Party already recognizes that this is a major problem. However, in this budget, they decided to ignore the issue.

Canada federal budget plan: What this budget is

Rather, this budget screams please re-elect the Liberal party. In the wake of the SNC Lavalin debacle, Prime Minister Justin Trudeau is trying to win votes by spending, spending and then more spending.

The Government of Canada market debt is projected to climb by $31 billion in the coming fiscal year, to strike a total amount of $754 billion. This brand-new funding demand comes along with $250 billion of existing debt that will be maturing and will require to be refinanced.

The Finance Minister estimates that Canada’s deficit will rise as a result of the $22.8 billion of new spending. The 2018-19 deficit projection is now set at $14.9 billion, slightly reduced from the Government’s estimate in Fall 2018. However, not surprisingly for an election budget, the Liberals found a way to spend those savings and then some. Their 2019-20 deficit projection is $19.8 billion.

Canada federal budget plan: What is in this budget

This budget has a bit of something for almost everyone. I am not an economist and this Brandon’s Blog is not meant to be an economic analysis of the budget. There are many sources for an in-depth analysis. However, some of the budget highlights are:

  • $1.25 billion over 3 years on a shared-equity home loan program for first-time home buyers.
  • RRSP withdrawal limit for new home buyers increases to $35,000 from $25,000.
  • To aid Canadians with uncommon medical conditions or diseases access to the medications they require, Budget 2019 proposes to invest up to $1 billion over two years into a National Pharmacare program, starting in 2022–23, with up to $500 million per year afterwards.
  • $3.25 billion to Indigenous Services for water quality, child welfare, education and other supports.
  • $2.2 billion for a one-time doubling of Gas Tax cash for cities’ infrastructure spending.
  • Personalized Canada Training Credit of $250 a year (up to $5,000 lifetime) for job retraining.
  • A credit of up to $5,000 for the acquisition of electric vehicles.
  • The rate of interest on Canada Student Loans decreased to prime and will be interest-free for 6 months after graduation.
  • Low-income working seniors can earn more without losing GIS benefits.
  • $595 million to sustain journalism will include 15% tax credit for electronic news subscriptions.
  • A promise of high-speed internet for all Canadians by 2030.

Canada federal budget plan: Vote for me

So as you can see, this budget is full of promises; a little something for everyone. The two glaring omissions seem to be nothing really for business and ignoring retiree bankruptcy protection. It appears that the Federal government went for the easy stuff – spending money, as opposed to harder things like amending the BIA and CCAA.

It is obviously an election budget. Details on how the new legislation and spending will work are scarce within Budget 2019. No doubt the devil will be in the details. The new proposed housing provisions will no doubt spur demand, which will keep the construction industry going which is a good thing. However, increased demand will probably mean higher prices in the major Canadian cities, especially in Toronto and Vancouver. So, it will take time to see if affordability gets worse or not for new home buyers.

Canada federal budget plan: I can’t spend more than I earn, how about you?

Our government has made no secret that it will be spending last year’s savings and then look to spend more than it takes in. The way they can do that is by just issuing more debt. This is certainly not unique to the Canadian government. All governments do it.

Unfortunately, normal working people can’t just take on more debt because we want to spend more. Eventually, I would run out of lenders willing to let me borrow more money, and my income would not be enough to make all my monthly payments, let alone repay the original loans! Rather, like you, I need to budget to make sure that my necessities are covered and that I have enough money for the other things I need to spend on. This includes my savings and emergency savings fund.

Have you lost the ability to borrow more money? Are you having trouble making your monthly payments? Is your business facing financial challenges that need to be addressed?

If so, call the Ira Smith Team today. We have years along with generations of experience helping people and companies in need of financial restructuring or a debt settlement plan. As a licensed insolvency trustee, we are the only professionals accredited as well as supervised by the Federal government to supply insolvency advice and services to help you avoid bankruptcy.

You can have a no-cost consultation to help you to fix your debt troubles. With you, we will discover your financial pain factors and offer you the strategy to finish them in your life. This will absolutely allow you to begin a clean slate, Starting Over Starting Now.

Call the Ira Smith Team today so you can start ending your stress and pain today. With the roadmap we create unique to you, we will quickly return you right into a healthy and balanced carefree life.

canada federal budget plan

Categories
Brandon Blog Post

SMALL BUSINESS CANADA TAX: LIBERALS UNFAIRLY TARGET SMALL BUSINESS TAXES IN CANADA RULES

small business canada taxFull disclosure: Ira Smith Trustee & Receiver Inc. is a licensed insolvency trustee firm in Vaughan (Toronto) Ontario. It is not an income tax advisory firm and does not provide income tax services. The information contained here is merely my opinion on SMALL BUSINESS CANADA TAX issues. This blog must not be relied upon for income tax advice or replace the advice of your income tax professional.

We are trying something new. At the bottom is an audiogram of this Brandon’s blog. If you would prefer to listen to it, and not read it, scroll down to the bottom and press on the play button. Let us know what you think by sending us a message in the Question box below.

Small business Canada tax: Introduction

In December 2017, our Federal Minister of Finance, Bill Morneau, disclosed some new policies he and Prime Minister Justin Trudeau were thinking about. The changes Finance Minister Morneau was touting, were for toughening up the small business Canada tax scheme. It would have affected entrepreneur’s businesses, their taxes, and their households.

The main aspect of small business Canada tax that our federal government wanted to attack was the age-old concept of family business income splitting. Its more modern name that you would have seen a lot in the press is called income sprinkling. The federal government was trying to advance the theory that small business owners whose family members were shareholders in the business, but not necessarily working in the business, were somehow cheating on their taxes.

Small business Canada tax: The Federal Government’s discussion points

The discussion focussed mainly on professionals, such as doctors, lawyers, and accountants who had a professional corporation. The government was trying to advance the argument how unfair it was for a professional earning say $250,000 annually, to “sprinkle” some of the income among family members older than 18 as compared to a salaried employee earning the same total amount in salary. I find it interesting that they used a quarter of a million dollars annually as an example, and not a lesser number. Do you think that was picked on purpose to subtly portray all family business owners as being fat cats?

The government’s position was that income that might have been paid to only the manager of the business, could be redirected to other family members by way of dividends. If those family members were in a lower-income tax bracket, then they would pay less tax. The government felt that was unfair.

Small business Canada tax: How income splitting or income sprinkling works

First, in order for this to work for a professional, the laws of the Province you live in has to allow you to have household members that aren’t professionals be shareholders of your professional firm. Second, if your spouse has a high taxable income already, then you will not profit by including him or her as an owner of the business. Lastly, you must decide if you’re going to add your children more than 18 years of age, as shareholders.

Assuming you’ve marked off all those issues, it can make a difference to your family’s overall income tax bill to add your partner and/or your grown-up kids as shareholders of your business. By doing this, you can choose to distribute dividends from the business and take advantage of their lower-income tax bracket.

Paying your partner or kids a salary is not as effective as making them shareholders of the firm and paying dividends. If you pay a salary, it needs to be a sensible one, for work that you can actually prove to the Canada Revenue Agency (CRA). In other words, you cannot simply pay your partner $100,000 for doing bookkeeping for the firm. CRA will certainly allow an affordable wage for that function, but it would have to be justified by comparison to the marketplace for such services.

The advantage of paying dividends to family members is that you do not need to prove it. The other benefit of paying dividends is that your firm recovers some of the business tax you’ve paid on dividends made by the firm’s financial investment portfolio. Refundable Dividend Tax on Hand (RDTOH) is the issue. Our firm does not do tax work. This is a complex topic, I will leave it up to you to research how RDTOH works.

Small business Canada tax: Tax changes effective January 1, 2018

Beginning January 1, 2018, the government changed the rules specifically to target professionals who have incorporated (specifically, doctors, lawyers, and accountants). Professionals who are gaining from reduced tax rates on what would have otherwise been fully taxed earnings at the highest marginal personal income tax rates, if not for their company.

The government is saying that these incorporate professionals aren’t adding their fair share to Canadian society by their decision to have a professional corporation. For that reason, they should not gain from the tax advantages of doing so.

So what are the changes? The Tax on Split Income (TOSI) rules has been amended to cover grown-up shareholders of private firms. Previously, TOSI rules only applied to minor children. The issue now becomes: If you’re a private company owner and pay dividends to adult family member shareholders, when can you do so without invoking the new regulations? Essentially, you need to be able to show much involvement in business.

Small business Canada tax: Clear bright line

The Federal government is putting what they’re calling a “clear bright-line”’ to exclude some relatives from the TOSI rules. The general TOSI exclusions are:

  1. The company owner’s spouse, providing they more than 65 years old.
  2. Children over 18 years old who have made a real labour contribution to the business. CRA is gauging this as an average of 20 hours a week during the year. Alternatively, there is also a test throughout any of the 5 earlier years.

The government has taken direct aim at professional corporations though. These exclusions do not apply where 90% + of the income of the corporation comes from the provision of services. Income from ownership of related businesses that earn income from the provision of services is also included in the calculation.

Inserting a trust into the ownership equation may get around this “excluded shares” provision. You need the advice of your income tax advisor to decide if it would be beneficial to you.

Small business Canada tax: Ottawa punishing small business Canada

When the federal government presented new tax rules, local business claimed they were being unjustly targeted by “punishing” measures. According to Small Business Association Canada, up to fifty percent of the country’s entrepreneurs state they’re feeling negative results.

The federal government also added changes to the passive income rules for private corporations. In the February 2018 Federal Budget, the Liberals added a grind-down mechanism for the small business tax deduction through which every dollar of investment income over $50,000 cuts profits eligible for the small business tax deduction by $5.

This has been especially challenging for organizations that use passive earnings to help in special capital funding. For example, paying for building and construction equipment or to acquire real estate used by the business.ira smith trustee

Small business Canada tax: The greatest tax battle in decades isn’t over

The Canadian Federation of Independent Business (CFIB) has asked the Provinces not to follow the Federal Liberals but to support small business.

For small businesses, the greatest tax battle in decades isn’t over. Private corporations who use responsible budgeting techniques and save up their profits and invest them to earn income, to be prepared for a rainy day, are being attacked. They may be saving to smooth out cash flow problems, or they might have a big upcoming purchase. Now they are being attacked through the income tax system for earning investment income in excess of $50K annually. It is clear that CRA will be looking closely at professional corporations’ income tax returns. I would not be surprised to see more CRA audits performed. The Federal government is looking to extract more income tax revenue from private corporations.

The rules are increasingly complex. Entrepreneurs will be spending more time dealing with more punitive income tax rules and income tax audits. All of this is designed by Ottawa for private corporations to pay more income tax. It ignores the investments small business makes. Creating jobs and making capital investments allows small business to contribute in many ways to the Canadian economy. This is aside from paying income tax.

Small business Canada tax: Does your company have too much debt?

Is your company under attack because of tax obligations or for other reasons. Is your company in need of restructuring to get debt relief?

The Ira Smith Team has decades and generations of experience people and companies in financial trouble. If your company is in need of a corporate restructuring proposal debt settlement plan, we have the experience to end your stress and pain and return you and your company to a healthy productive pain-free condition.

Our approach for each case is to develop a solution where Starting Over, Starting Now happens. This starts the moment you meet with us. You’re simply one call away from taking the necessary actions to return to leading a healthy and well-balanced problem-free life. Call us today for your free appointment.

Full disclosure: Ira Smith Trustee & Receiver Inc. is a licensed insolvency trustee firm in Vaughan (Toronto) Ontario. It is not an income tax advisory firm and does not provide income tax services. The information contained here is merely my opinion. This blog should not be relied upon for income tax advice or replace the advice of your income tax professional.

Categories
Brandon Blog Post

CANADA BANKING INFO COLLECTION: YOUR EXPECTATIONS VS REALITY ACCORDING TO JUSTIN TRUDEAU

Canada banking info collection: Introduction

On October 29, 2018, the Hon. Candice Bergen (Portage– Lisgar, CPC), stood in Parliament during Question Period. She talked to troubling reports this previous weekend that Statistics Canada was taking part in Canada banking info collection without the consent of the people whose info was being asked for.

Statistics Canada notified financial institutions, charge card businesses as well as credit reporting companies that it anticipates them to turn over individual financial information of a minimum of half a million Canadians without their consent or authorization. Financial institutions will not be able to tell their customers about the government demand for their financial transactions.

The noticeable issue is, that with the lengthy history of federal government personal privacy violations, Canadians are appropriately stressed over both the collection as well as the security of their individual economic deals. Ms. Bergen needed to know why the Liberals are accumulating the individual information of Canada without telling them.

Canada banking info collection: PM Justin Trudeau reacts

Our PM reacted by stating that the federal government is ensuring that the individual information of Canadians is secured. Stats Canada will certainly make use of the anonymized information for analytical functions only. No details will be revealed.

He stated that he understands (which is a way of repeating rumours or hearsay, or worse, that he truly does not understand whatsoever) that Statistics Canada is proactively involved with the Privacy Commissioner’s office, to make sure Canadians’ financial details stays safeguarded and private. High-grade and prompt information is important to guaranteeing that federal government programs stay pertinent as well as efficient for Canadians.

Canada banking info collection: Ms. Bergen had not been pleased, and neither ought to we

Ms. Bergen responded that the Liberal federal government strategies to get access to the individual details of Canadians without their knowing about it or permission. This consists of details like payments, internet purchases, charge card purchases, cash withdrawals and e-transfers between members of a family.

She wants to know if the Prime Minister will do the right thing. Will he guarantee Canadians that this invasion into their lives will be stopped?

Canada banking info collection: PM Justin Trudeau reacts by attempting to fault the Conservatives

Our PM reacted by stating that Canadians appropriately expect that federal government agencies like Statistics Canada will collaborate with the Privacy Commissioner. He said that Stats Canada will make certain that Canadians’ exclusive lives are shielded. Good words up until we hear that CRA obtained accessibility to the info, or even worse, cyberpunks!

Then for the good part. PM Trudeau said to the House of Commons and all Canadians that it was the Conservative federal government that selected to end the long-form census as a method of protecting an individuals’ exclusive info. So our PM is saying that in some way our private financial transactions is a straight substitute for basic analytical demographics? I don’t think so.

PM Justin Trudeau after that doubled down by stating that the Conservatives’ assaults on information and privacy continue.

Canada banking info collection: Mr. Alain Rayes (Richmond– Arthabaska, CPC)

Mr. Alain Rayes also participated. He repeated that Canadians expect the federal government to secure their private details, yet the Liberals wish to gain access to private information on 500,000 Canadians without their approval. They intend to consider loan repayments, ATM withdrawals, credit card transactions, financial institution money transfers and social insurance numbers.

Exactly how can the Prime Minister warrant these activities, which are plainly an offence of Canadians’ personal privacy?

Canada banking info collection: Blah, blah, blah.

Prime Minister Trudeau responded with more of the same. He said again the government will constantly make sure (a warranty?) that the individual information of Canadians is safeguarded. He said that Stats Canada will make use of the anonymized information only for analytical goals. No details will be revealed (does analytical purposes only include analysis by Canada Revenue Agency?).

He repeated that Statistics Canada is proactively involved with the Privacy Commissioner’s workplace on this task and is dealing with it to make certain Canadians’ info continues to be secured and private.

My personal view is that the primary federal government program that would certainly most take advantage of understanding my private financial information is the income tax collection system in Canada!

Canada banking info collection: The law

The Personal Information Protection and Electronic Documents Act (S.C. 2000, c. 5) (PIPEDA), Canada’s federal private sector privacy legislation, was specifically amended on the issue of privacy. Schedule I of Section 5 of PIPEDA states that:

“4.3 Principle 3 – Consent
The knowledge and consent of the individual are required for the collection, use, or disclosure of personal information, except where inappropriate.” (emphasis added).

What is one of the exceptions?

4.3 Principle 3 – Consent
“Note: In certain circumstances personal information can be collected, used, or disclosed without the knowledge and consent of the individual. For example, legal, medical, or security reasons may make it impossible or impractical to seek consent. When information is being collected for the detection and prevention of fraud or for law enforcement, seeking the consent of the individual might defeat the purpose of collecting the information.”

So, looking at the exceptions, this only bolsters my hunch. I am convinced this is not only to evaluate the viability and effectiveness of existing social programs. Rather, it will be used to evaluate and amend the effectiveness of tax investigation programs. This will provide direct new information to the Canada Revenue Agency to bolster current and start new investigations. That is why the information is being collected without Canadians’ consent to invade their privacy.

Canada banking info collection: May I have this dance?

Justin Trudeau just kept dancing and blaming Conservatives. This new invasion of privacy really doesn’t have anything to do directly with insolvency. However, if I am correct in my guess, and the information is going to be used by CRA, then it may well.

People may very well have engaged in tax evasion. I, of course, do not condone it. Criminal charges aside, Canadians who evade taxes and get caught will now have a huge income tax bill to pay. Many won’t be able to.

There will be many high tax debtors who will not be able to afford a voluntary payment with CRA. Such a voluntary payment plan will need you to pay your original income tax debt. You will not get any reduction in all penalties and interest. So you will be paying in full to Her Majesty. For those who will not be able to afford such a voluntary payment plan, bankruptcy is definitely not your first option. You would have to look at a debt settlement restructuring proposal as a first choice. Bankruptcy should be your last option.

Canada banking info collection: What about you?

If you have received legal advice that you don’t really have a case, or you can’t afford to fight it out in Court or pay the income tax debt that renders you insolvent, then you need the help of a professional trustee.

The Ira Smith Team has years of experience of negotiating with CRA on behalf of tax debtors. If you are an individual person and owe CRA and your other creditors, other than for any loans secured by your home, less than $250,000, you can enter into a consumer proposal debt settlement plan. If you owe more or are a corporation, we can still negotiate with CRA and restructure you with a restructuring proposal debt settlement plan.

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 door. You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, recover your money and move on to the next investment opportunity.

In conclusion, call us today for your free consultation.canada banking info collection ira smith trustee

Categories
Brandon Blog Post

SEARS CANADA DEFINED BENEFIT PENSION PLAN SHORTFALL: MP SCOTT DUVALL COMES THROUGH ON HIS PROMISE IN CANADIAN PARLIAMENT

2

Sears Canada defined benefit pension plan shortfall: Introduction

On November 6, 2017, Hamilton Mountain NDP MP Scott Duvall rose in the House of Commons for leave to introduce Bill C-384. It is titled “An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance programs)”. Mr. Duvall’s motivation was the Sears Canada defined benefit pension plan shortfall.

Sears Canada defined benefit pension plan shortfall: Hamilton Mountain MP Scott Duvall introduces Private Member’s Bill C-384

Here is what Mr. Duvall said:

“Mr. Speaker, I would like to take this time to thank my seconder, my colleague who has done great work and works very hard in this House, and who has also helped me a lot on this bill.

I rise today to introduce a private member’s bill titled, an act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act. This bill will amend the Bankruptcy and Insolvency Act and the CCAA so that companies will have to bring any pension plan fund to 100% before paying any other secured creditors. It also makes amendments to require companies to pay any termination or severance pay owing before paying any secured creditors.

Other amendments will prevent a company from stopping the payment of any post-retirement benefits during any proceedings under the BIA or CCAA. These amendments will inject some fairness into a process that often sees the interests of workers, retirees, and their families placed behind all others.

We must fix the imbalances in current legislation and provide Canadian workers, retirees, and their families with the protection they expect and deserve. I am hopeful that all my colleagues in Parliament will put aside their partisan differences and support this bill. Canadian workers, retirees, and their families deserve no less.”

Although he did not mention it specifically by name in the House of Commons, Mr. Duvall has said that he would introduce such a Bill as a result of the Sears Canada defined benefit pension plan shortfall.

Sears Canada defined benefit pension plan shortfall: Hamilton Mountain MP Scott Duvall walks the walk

In our September 27, 2017 blog, TORONTO BUSINESS BANKRUPTCY PROTECTION: NDP WANTS FEDERAL INSOLVENCY LAWS CHANGED SO THERE IS PENSION PLAN SECURITY WHEN FINANCIALLY TROUBLED BUSINESSES FAIL, we told you that Hamilton Mountain MP Scott Duvall, the NDP pension plan critic, informed a group at the United Steelworkers’ Hall that he will present a private member’s bill to secure employees’ pension plans and benefits, and pressure business to offer termination or severance pay, prior to paying secured lenders.

With his Bill C-384, Mr. Duvall has lived up to his promise.

3bestaward
sears canada defined benefit pension plan shortfall

Sears Canada defined benefit pension plan shortfall: This is actually the second Bill attempting deal with this problem

In our November 1, 2017 blog, SEARS CANADA CLOSING: POLITICIANS WANT NEW LAWS TO PROTECT PENSIONERS DUE TO SEARS CANADA CLOSING, we reported that Bloc Québécois MP Marilène Gill’s Private Member’s Bill C-372, passed First Reading. That Bill is titled “An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans)”. In that blog, we described the provisions included in that Bill.

Like Mr. Duvall, Ms. Gill is trying to pass legislation to avoid another Sears Canada defined benefit pension plan shortfall insolvency situation.

Sears Canada defined benefit pension plan shortfall: What does Bill C-384 actually say

The purpose of this blog, is to describe the terms of Mr. Duvall’s Bill.

Mr. Duvall’s Private Member’s Bill C-384 passed First Reading. It is very similar to Ms. Gill’s BIll C-372. He wishes to amend the Bankruptcy and Insolvency Act (BIA) as follows:

  • In order to be approved by the Court, a corporate restructuring proposal under the BIA, for a company with a prescribed pension plan, the Proposal must include payment in full of any unfunded pension liability or solvency deficiency. The amount is calculated at the time of the filing of the Notice of Intention To Make A Proposal (NOI) or the Proposal if there is no NOI filed.
  • New section 69. 7 be added to the BIA that in the restructuring proposal of an employer, upon filing, until the discharge of the Licensed Insolvency Trustee (LIT), or the insolvent employer becomes bankrupt, all amounts that the employer must contribute under any arrangement for the benefit of the employees, must continue throughout the restructuring period. This would cover any pension plan, health, injury or accident plans and group insurance coverage.
  • The unfunded pension liability or solvency deficiency calculation is called “special payments” in Bill C-384. The calculation is by section 9 of the Pension Benefits Standards Regulations, 1985.
  • In a receivership, the receiver is personally liable for paying any unfunded pension liability or solvency deficiency. However, the receiver’s liability is only from the proceeds of the sale of current assets.
  • In either a receivership or corporate bankruptcy, the charge for any unfunded pension liability or solvency deficiency would rank ahead of the charge of any other secured creditor. It is interesting to note that the Bill does not attempt to provide such a security ranking to anything other than the pension liability or solvency deficiency.
  • The Officers and Directors of the company are not entitled to the benefit of this secured charge. Even if they are participants in the pension plan that has the unfunded pension liability or solvency deficiency.
  • New subsection 136(1) (d. 001) to the BIA, creating an extra class of preferred creditor. A preferred creditor is an unsecured creditor who ranks ahead of the ordinary unsecured creditors and ranks after the secured creditors. The Bill states that it would say that the amount of any termination or severance pay owed to an employee by a bankrupt employer, less any amount previously paid by the LIT, would rank in priority right after the wages owed to the employee.
  • There are also proposed amendments to the Companies’ Creditors Arrangement Act (CCAA) in Bill C-384. It is to bring the same changes in that statute as those to the BIA described above. The intent is that the treatment under both statutes is the same.

Sears Canada defined benefit pension plan shortfall: Now it is up to Justin Trudeau and his Liberal Party

We will now have to wait and see what happens to both Ms. Gill’s and Mr. Duvall’s Private Member’s Bills. As we previously reported, it is unusual that a Private Member’s Bill becomes real legislation. As the Liberals hold a majority in Parliament, if they don’t want it, or a revised Bill for the same purpose, to pass, it won’t.

Sears Canada defined benefit pension plan shortfall: Does your company need a restructuring and turnaround plan?

Is your company insolvent and needs to restructure? Is your business viable but can only employ people and carry on business if it can restructure its debt? Contact the Ira Smith Trustee & Receiver Team. If we meet with you early on, we can create a restructuring and turnaround strategy. That way your company won’t have to be like Sears Canada closing.

sears canada defined benefit pension plan shortfall 0
sears canada defined benefit pension plan shortfall
Call a Trustee Now!