By Colleen McMullin of Gowling Lafleur Henderson LLP
Introduction
The Federal Court of Appeal has recently provided much needed clarification on the parameters of the controversial General Anti-Avoidance Rule (the “GAAR”), which has left many corporate tax advisors breathing a temporary sigh of relief. The rule, contained in section 245 of the Income Tax Act, may be asserted against taxpayers who are in technical compliance of the law, but, in the opinion of the Canadian Revenue Agency (the “CRA”), have participated in a transaction that resulted in a “misuse” or “abuse” of the provisions of the Act.1
Since its enactment in 1988, a great deal of uncertainty has entered into the realm of tax planning. More than two decades later, this uncertainty still abounds today. Taxpayers and tax planners alike are unable to predict with any degree of certainty whether or not they have structured their affairs in a way which will avoid CRA scrutiny, despite complying with the letter of the law. Contributing to this atmosphere of doubt is the Agency’s tendency to use the GAAR as a tool to make retroactive determinations of the appropriateness of a transaction – a process which critics claim has more to do with the quantum of the assessment, and less to do with any well-founded principles of tax law.
In order for the GAAR to apply, the taxpayer must have enjoyed a tax benefit (i.e. a reduction, avoidance or deferral of income tax), have entered into an avoidance transaction (i.e. a transaction undertaken primarily for a tax benefit), and engaged in abusive tax avoidance (i.e. the tax benefit enjoyed as a result of the avoidance transaction frustrated or defeated a specific
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by Jeffrey S. Graham, Tyler Hodgson and Gar Knutson of Borden Ladner Gervais LLP
Toronto is the financial services capital of Canada and one of North America’s premier financial centres. One of the most rapidly growing segments of the international financial services sector is Islamic finance. Recognizing this trend, a number of other financial centres are positioning themselves as global centres for Islamic Finance, including London, England, Dubai, UAE, Bahrain and Kuala Lumpur, Malaysia.
The City of Toronto and its financial cluster developed a unique public-private partnership called the Toronto Financial Services Alliance (TFSA). The mandate of TFSA is to enhance and promote the competitiveness of Toronto as a premier international financial centre. One of the ways to do this is to build leading hubs of expertise in defined areas. With a prominent and growing Canadian Muslim community and strong and innovative financial sector, there is every reason to believe that Toronto could emerge as a North American centre for Islamic finance. Exploring the opportunities that exist in this developing segment is consistent with the TFSA’s mandate and in 2009 the TFSA created an Islamic Finance Working Group (IFWG).
Recently the IFWG delivered to the TFSA its initial report entitled Making Toronto the North American Centre for Islamic Finance: Challenges and Opportunities. The report provides an overview of Islamic finance activity in Toronto and Canada, identifies tax, regulatory and legal issues that need to be addressed to ensure the growth of Islamic finance in Toronto and Canada. In addition, the report proposes a series of next steps:
- helping members of the Islamic community to network within the conventional Canadian financial system;
- clarifying the regulatory environment relevant to products and services compliant with Islamic commercial law;
- working with the new Centre of Excellence in Financial Services Education to build linkages with other countries where Islamic Finance is well established to facilitate in Toronto educational and awareness building initiatives;
- partnering with Canadian governments to increase the level of foreign direct investment from the Gulf region;
- a series of technical working papers are proposed on the following topics: Education, Retail Markets and Sukuks (Corporate and Sovereign).
By J. Geoffrey Howard with Ryan Welsh, Gowling Lafleur Henderson LLP
With summer upon us, many employers are organizing workplace social events where alcohol may be permitted or even provided. These events can be a great way to boost morale, but they can also expose employers to the following liabilities, unless steps are taken to reduce these risks.
“Social Host” Liability
Much like commercial hosts (bars, pubs etc.), employers owe a duty to their employees and third parties to monitor the consumption of alcohol at events where alcohol is served and must avoid providing alcohol to those who are intoxicated, where there is any risk of subsequent injury. Otherwise, employers can be held liable for damage to property, injuries to their employees, and injuries to third parties such as passengers in a car or in other cars involved in an accident caused by the intoxicated employee. The courts tend to hold employers to
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In which we revisit the importance of looking at the whole picture even when someone says, “it hurts …right … here.”
Youthful excess and advancing age have led to creaky joints. From time to time, I seek help from physical therapists, trainers, and physicians.
I went to see a new provider last week. Our interview began with, ”What has brought you here?”
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by James D. McAuley of KPMG LLP
It is not surprising that Canadian banks continue to be popular targets for class action lawsuits. Not only are Canadian banks among the world’s largest and most profitable corporations, but they also provide most of the population with a set of essential and complex services.
In the absence of readily available statistics to measure industry exposure to class actions in Canada, KPMG embarked on a research project of its own. Our investigation found that Canadian banks currently face at least 81 class actions.1 The amounts claimed, where reported, amount to almost $4.9 billion. When this known amount is extrapolated to include actions with no reported financial claim,2 the total estimated claims swell to between $8.8 billion and $12.4 billion.3
It is important to remember that the ultimate liability of banks to class actions will most likely be significantly less than the aggregate amounts claimed. However, the costs of settlement are substantial, and significant operating costs are also incurred to defend class actions. Perhaps one of the greatest concerns in the process is damage to the bank’s reputation. It is common for the announcement, progress, and settlement of class actions to be
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