March 2011 | GrossmanCGA – How can I help?

Monthly Archives: March 2011

Employee or Independent Contractor: Does Intention Matter

Written on March 31, 2011 in Advisors' guides, HR and Benefits

By Michael Polychuk of Gowling Lafleur Henderson LLP

In January 2011, the Tax Court of Canada (the “TCC”) released two judgments, Prue v. M.N.R (“Prue”) and Smith v. M.N.R (“Smith”) in which it found that the individuals were operating as independent contractors rather than employees. The court examined the intention of the parties, since in both cases the appellants believed that their status had changed from independent contractor to employee over the course of the relationship.

The key question in determining whether an individual is an employee or independent contractor is whether or not the individual was engaged to provide services as a person in business on his or her own account as set out in Wiebe Door Services Ltd. v. M.N.R. (“Wiebe Door”). That case also provided a list of factors that may apply such as: the level of control, the ownership of the equipment, the degree of financial risk and the opportunity for profit. In 2001, the Supreme Court of Canada stated in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., that

Tags: Canada, contractor, employee, employer, guides, liability

Practice reciprocity without keeping score

Written on March 31, 2011 in Advisors' guides, Canadian Commercial Lenders, HR and Benefits, Networking

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By Harvey Mackay

When we were growing up, most of us learned to live by the Golden Rule: Do unto others as you would have them do unto you. Not “as they do unto you,” but “as you would have them do unto you.”

As working professionals, there is another manifestation of this rule, the Golden Rule for Networking. It should permeate all your networking efforts. But it goes against every naturally acquisitive, ambitious and self-serving impulse in each of us.

My Golden Rule of Networking is this: Reciprocity without keeping score. Simply stated, it means

Tags: guides, helping, Networking

Spousal and Common-Law Partner Trust Planning

Written on March 30, 2011 in Advisors' guides

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by Marc Weisman of Torkin Manes LLP

When a taxpayer dies, tax laws dictate that the taxpayer is deemed to have disposed of all his/her capital property at fair market value. This will trigger capital gains (and recaptured depreciation), which are subject to income tax. (Capital property includes shares of private and public companies and real estate.)

However, if the taxpayer leaves the capital property to a spouse (which includes a common-law partner) or a “qualifying spousal trust” in a Will, any accrued capital gains (and recaptured depreciation) on the property will be realized on the death of the surviving spouse or when the spousal trust sells the property. This might provide a significant tax deferral.

What is a “qualifying spousal trust”?

Tags: Canada, CGA, guides, spouse, tax, trust

FMC Law Ontario Employment Law Bulletin for March 2011

Written on March 22, 2011 in HR and Benefits

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Fraser Milner Casgrain LLP recently published their Ontario Employment Law Bulletin for March 2011, covering the following topics:

Active Employee Wins Constructive Dismissal Suit, Gets Damages for Pay Cut
Backlog Drives Changes to Ontario’s Employment Standards Complaint Process
Court Overturns Award of Lost Wages until Retirement
IT Employee’s Security Breach Justified Termination
Facebook Firing Upheld
HR Professionals Bill Causes Controversy in Ontario
Pay Equity Commission Conducting Random, Province‐Wide Compliance Audits
Occupational Health and Safety Act Amendments Coming
Canadian Unionization Numbers Increase Slightly

Download a copy here.

Tags: employee, employer, employment standards, equity, Facebook, union

The Easiest Way to Lose an Arbitration

Written on March 22, 2011 in HR and Benefits

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By Bull, Housser and Tupper LLP

With this one simple mistake, an employer can lose even the most airtight case

It’s a familiar theme of police television dramas: everyone knows the bad guy committed the crime, but the police don’t do everything by the book and the villain gets away on a “technicality.” The police force winds up looking foolish, the prosecutor chews out the detectives involved, and our heroes have to find another way to bag their criminal.

In much the same way, an employer will lose an arbitration if it is found that it breached the employee’s right to

Tags: arbitration, Canada, employee, employer, guides, steward

Proposed Income Tax Legislation

Written on March 18, 2011 in Advisors' guides

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By Cary Heller of Collins Barrow Toronto LLP

On Wednesday, March 16, 2011, the Department of Finance released proposed income tax legislation designed to address three decisions of the Federal Court of Appeal.

Contingent Amounts and Limits on Expenses
In Collins v. The Queen, 2010, FCA 12, the issue was deductibility of interest. In brief, the taxpayers deducted accrued but unpaid interest at the full amount even though they had an existing right to discharge their obligations by electing to pay a significantly lower amount of interest. The Federal Court of Appeal (“FCA”) ruled that it was not the original obligation to pay the interest that was contingent, but that it was each taxpayer’s subsequent decision to exercise the option to pay the lower amount which was contingent. As such, the decision allowed interest payable under the original obligation to be deducted in computing income even though both taxpayers had a right to elect to pay a lower amount.

The draft legislation provides that

Tags: Canada, CRA, debt, finance, interest, lender, tax

2011 Perspectives on the Canadian Banking Industry

Written on March 15, 2011 in Canadian Commercial Lenders

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by Diane Kazarian, Ryan Leopold, George Sheen and John MacKinlay of PricewaterhouseCoopers

In a time of accelerating change, Canadian banks have done far more than what’s necessary to survive over the past year. As many global banks struggled to regain their pre-crisis position, Canada’s Big Six banks leveraged their well managed, well regulated and well capitalized standing to actively pursue their growth strategies. And the effort paid off: the 2010 combined net income of the Big Six was $20.4 billion, exceeding 2009 net income by more than $6 billion and eclipsing the previous record of $19.5 billion set in 2007.

With the events of the past year in mind, we spoke with a number of Canadian analysts and portfolio managers to understand their opinion on what the future holds for Canadian banks. Overall, managing complexity, pursuing growth strategies and transforming through innovation were the overriding considerations to stay competitive. As is often the case, the real challenge going forward is how to execute while many pervasive risks remain.

Tags: bank, Canada

Sales Thought – Do You Really Want to Hear?

Written on March 14, 2011 in Advisors' guides, Canadian Commercial Lenders

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by Nick Miller of Clarity Advantage

In which we are reminded about the subtle cues we use to control conversation and how they affect what we learn from clients.

“It’s in how you ask the question, the eye contact, your body language. Are you really wanting to hear the answer or do you want to move on?”

My wife and I had just returned from a neighborhood pre-Christmas party. 25 people, folks that we see every year at this party plus new neighbors who had moved in during the year. Each of the families contributes food to the table and hors d’oeuvres. It’s a magnificent spread. People are happy, glad to see each other, catching up on up to a year’s worth of news.

I consider myself fairly sociable and conversational in these settings. However, when we came home, my wife returned with all kinds of information about the neighbors’ mothers, sisters, jobs, husbands, former husbands, kids, and on and on. “I got nothing” would be too harsh an assessment of my own learning during the evening and there was a dramatic difference between what I had learned and what my wife had learned.

Tags: conversation, gender, guides, listening, pitch, product, proposal, prospect, sales

We’ve got the 2011 Superintendent’s Standards for Surplus Income in Bankruptcy

Written on March 11, 2011 in Bankruptcy and insolvency rules

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We have updated our section on surplus income in bankruptcy with the new, 2011 Superintendent’s Standards here:

http://grossmancga.com/site/canadian-bankruptcy-rules/surplus-income-in-canadian-bankruptcy/sample-calculation-of-surplus-income/

Tags: standards, superintendant, surplus income

Liability Insurance Policies For Directors And Officers – A Checklist Of Matters To Consider

Written on March 8, 2011 in Advisors' guides, Canadian Commercial Lenders

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by Francy Kussner of Goodmans LLP

Directors and officers face a wide and growing range of potential personal liabilities in the course of carrying out their duties. A directors’ and officers’ liability insurance policy (or “D&O policy”) can help protect against these risks. D&O policies are negotiable and policy terms and conditions can vary materially. The following is a brief outline of certain issues that directors and officers should consider when reviewing their D&O policy.

Types of Coverage

In addition to “Side A” and “Side B” coverage, does the policy also provide “Side C” coverage?

Most policies offer two types of coverage: “Side A”, which covers directors and officers personally for non-indemnified claims, and “Side B”, which reimburses the corporation for the costs of indemnifying directors and officers. In addition, many policies offer “Side C” coverage, which covers claims made against the corporation itself.

Tags: director, errors, insurance, officer, ommissions

A Practitioner’s Guide to the New Canada Not-For-Profit Corporations Act

Written on March 2, 2011 in Advisors' guides

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By Wayne D. Gray of McMillan LLP

On June 23, 2009, Bill C-4, the Canada Not-for-profit Corporations Act received Royal Assent. The new Act is important governance legislation in its own right but will doubtless exert an influence far beyond those corporations that will incorporate or continue under it. Just as the CBCA exerted a powerful influence on the shape of provincial and territorial laws governing business corporations in the years immediately following its implementation in 1975, this new federal Act is bound to exert an equally strong (if not more profound) influence on provincial and territorial not-for-profit corporate law reform in the years ahead.

This article reviews the types of not-for-profit corporations to which the new Act will apply, summarizes the rules differentiating soliciting and non-soliciting corporations, describes some of the new governance provisions, analyzes possible problem areas and suggests workaround solutions to these problems, draws implications from the implicit governance regime imported into the new Act and outlines the process for continuing to the new Act.

Download the full article here.

Tags: Canada, charity, corporation, incorporation, nfp, not-for-profit

Are you Eligible to Make a Valid Voluntary Disclosure?

Written on March 2, 2011 in Advisors' guides

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Michael Friedman and Ashley Palmer of McMillan LLP

Canada’s income tax system requires taxpayers to self-assess and report their income tax liabilities in respect of each taxation year. Where a taxpayer has previously provided incorrect or incomplete information, or has failed to disclose required information entirely, to the Canada Revenue Agency (CRA), the taxpayer may, under certain circumstances, be permitted to come forward and voluntarily disclose past reporting errors or omissions in exchange for potential penalty (and, in limited circumstances, interest) relief by making an application to the CRA under the federal “Voluntary Disclosures Program” (VDP). This article provides a general overview of the conditions that a taxpayer must satisfy in order to be eligible to make a valid voluntary disclosure.

Tags: Canada, CGA, CRA, debt, disclosure, guides, tax, voluntary