By Daniel L. Kiselbach and Cheryl Teron of Miller Thompson LLP
British Columbia is the first Canadian province to allow individual real estate licencees to form personal real estate corporations (PREC). Under the Real Estate Services Act and the Real Estate Services Regulation, Realtors can take advantage of the benefits of incorporation in a manner similar to dentists, accountants and lawyers.
I am grateful to Greg Barber of Rotman Information Solutions for his kind words in the January/February 2012 issue of CGA Ontario’s Statements magazine, found here:
http://grossmancga.com/site/download/Statements,%20Jan-Feb%202012%20-%20Net%20Assets.pdf
And please do take advantage of the Rotman Information Solutions research services for CGAs which are described in the ad in the middle of the column. This is a free service for CGAs in Ontario.
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by Marc Weisman of Torkin Manes LLP
As part of my tax and estates practice, I frequently advise executors on tax and estates matters. The recent decision of the Federal Court of Canada in Rosenberg Estate v. Canada (National Revenue) 2011 DTC 5075 highlights the importance of filing final tax returns on time to avoid penalties to the estate.
This was not a simple estate. Mr. Rosenberg passed away on June 14, 2003 without a Will and therefore without an executor. The court appointed a liquidator (Quebec term for estate trustee) on November 3, 2003. The heirs were in dispute. There was also an undeclared offshore bank account that ultimately resulted in a voluntary disclosure. The liquidator had instructed Mr. Rosenberg’s accountant to prepare and file the terminal return and remit a payment on account of the tax owing. The accountant failed to file the terminal return on time and the liquidator appointed a new accountant. Neither the liquidator nor the accountant had sufficient information to determine the precise amount of tax owing by the filing deadline of the terminal return. Further, the liquidator had to deal with all of the complications of an intestacy and disputes between the heirs.
by Marc Weisman of Torkin Manes LLP
In the last two or three years, the Canada Revenue Agency (“CRA”) has been aggressive in its pursuit of corporate taxpayers and their directors for unremitted payroll withholding taxes and goods and services taxes. As part of our tax practice, we have acted for more than 200 corporate and individual taxpayers in these situations, so we take careful note of court decisions that have a bearing on this field.
In a recent case (Dupont Roofing & Sheet Metal Inc. 2011 DTC 5031), the Federal Court of Canada surprisingly ruled that the CRA is not required to issue a notice of assessment before it enforces collection on unremitted payroll withholding taxes.
by Peter Moffatt of Gardiner Roberts LLP
Ontario’s Bulk Sales Act poses a challenge to investors who want to acquire an Ontario business. An investor who is considering the acquisition of a business based in Ontario, Canada, and the attorneys who are advising such an investor, need to be aware of the application of Ontario’s Bulk Sales Act,R.S.O. 1990, c. B.14 (BSA).
Bulk sales legislation, including the BSA, has its roots in English law and historically was common in many jurisdictions in North America. Today, Ontario is one of the few remaining jurisdictions in North America, and the only jurisdiction in Canada, which still has bulk sales legislation in force. Several jurisdictions in the US, including California, Georgia, Maryland, Virginia and the District of Columbia, continue to have bulk sales legislation in force, and additional jurisdictions in the US, while no longer having in force bulk sales legislation of general application, have bulk sale notification provisions embedded in their taxing statutes.
The primary reason cited for the repeal of bulk sales legislation in jurisdictions of Canada other than Ontario is, in the words of the Supreme Court of Canada, that bulk sales legislation achieves its goals “only at the cost of significant commercial inconvenience, disruption and expense”: National Trust Co. v. H&R Block Canada Inc., [2003] 3 S.C.R. 160, at para 8 (H&R Block). The purpose of this article is to describe the types of transactions to which the BSA may apply and to provide insight into how to overcome BSA compliance issues.
by Robert Kasian of MacPherson Leslie & Tyerman LLP
“If you care at all about the future of the world’s food supply, you care – whether you know it or not – about Saskatchewan.” (Andrew Ross Sorkin, Columnist – The New York Times, October 11, 2010)
Saskatchewan has received a lot of attention in the world press and investment community over the past several years. In particular, investment in Saskatchewan farm land has been on the radar of some of the world’s most prominent investors for several years. This interest has been driven by several factors including Saskatchewan’s booming economy, Canada’s stable financial and political environment, growing food demand and increasing commodity prices. At an average price of approximately C$500/acre, Saskatchewan also has some of the cheapest farm land in the developed world. In Alberta the average price is approximately C$1,400/acre and in the United States almost US$3,000/acre. In the United Kingdom, the average price of farm land is approximately US$10,000/acre. All of these factors have contributed to unprecedented interest in Saskatchewan farm land as an investment.
Whether you’re managing a team of employees or you’re on your own, remember that although what you do and how you do it are important, it’s the “why” that provides real motivation to succeed.
An experiment conducted by the University of Pennsylvania’s Wharton School of Business demonstrates the power of “why.” At a university call center where employees phone alumni to solicit contributions to scholarship funds, the staff was randomly divided into three groups: The first group read stories written by former call center employees about the benefits of the job (such as improved communication and sales skills). The second group shared accounts from former students about how their scholarships helped them with their education, careers and lives. The third, a control group, read nothing, just explained the purpose of the call and asked for a contribution.
After a month, the researchers found that the first group and the third group raised roughly the same amount of money from alumni after the experiment began as before. But callers in the second group, who had related the stories about the impact of the scholarships students received from the fund-raising campaign, raised twice as much money from twice as many alumni as they had before.
by Russell G. Benson of McCarthy Tétrault LLP
You know the situation. You have been communicating back and forth by e-mail with the other party and somewhere along the way it occurs to you, “Do we have an agreement here, or have we just been talking?” Your next call is to your lawyer.
By Paul Miller of Boughton Law Corporation
[Ed. note: Although a British Columbia case, it evidences how variable are common law entitlements in Canada.]
Employers seeking advice about what notice period or pay in lieu of notice should be given to an employee who is not being dismissed for cause are often told by their legal advisors that there are four main factors to consider: the character of the employment, the length of service, the age of the employee and the availability of similar employment having regard to the experience, training and qualifications of the employee. This article will focus on the first of these factors.
by Stevan Novoselac & John Sorensen
In our article, “The CRA is not a Bank – Director’s Liability in an Age of Economic Uncertainty”,1 we strongly warned corporate directors to make sure that source deductions, GST/HST, employee EI premiums and employee CPP contributions are remitted to the Crown and not used as operating funds, regardless of whether the corporation has cash flow problems. This is because a corporation’s failure to remit these amounts makes directors personally liable for the default, if:
by Gary Adamson of Adamson Advisory
The universal measure of profitability in accounting firms is average income per partner. Another universal tool is the annual Rosenberg National MAP Survey. It’s a must-have for running your firm.
In the latest survey, Rosenberg identifies his “elite” firms, which are the 54 that had income per partner of more than $500,000. Not bad considering it is based on 2009 economic data—from the middle of the recession.
It’s interesting, if you dig into the data in the survey, you will find that these 54 aren’t just the biggest firms, although as Rosenberg puts it, bigger is better in terms of profitability. In fact, 24 of them are in the $2-$10 million fee range and three are sole proprietors.
by Nick Miller of Clarity Advantage
In which we are reminded to prepare a plan to finish our sales processes.
“So, are we going ahead, then?”
This question asked of me by Kyle, a bank residential mortgage specialist. I had called him for information about his bank’s lending procedures, closing costs, time frames, etc. etc. etc. and rates. I’d called him, specifically, because (1) I use one product from his bank and (2) their rates are among the best in the market at this point. My other option was to apply for the loan with Bob, a specialist who has assisted me with multiple refinancings during the 30 years I’ve lived in Massachusetts. His rates and terms weren’t quite as good. I’d called Bob first, then Kyle.
“So, are we going ahead, then?” Kyle had heard a pause – the slightest waffle in my voice as he finished sharing his information. I was feeling the impact of some loyalty to Bob. I was thinking, “I want to think about it.”
A couple of Ontario accounting firms are looking to expand by purchasing existing practices or blocks of accounts.
Please contact me: eric.grossman@grossmancga.com or 647.333.7229
by Nick Miller of Clarity Advantage
In which we are reminded to engage our clients on what’s top of mind for them right now rather than on what’s top of mind for us.
I live near Boston, Massachusetts. The Red Sox are finished. Winter is coming. Around the Miller household, we are preparing our house and garden for the winter. Storm windows hung up, hosta cut down, lime and fertilizer spread around. Early days, still, and we’re working our way through the list, week by week, toward the inevitable arrival of sharply colder temperatures and snow.
As a business owner, I’m feeling like I’m in the same position now – another economic winter is coming, and I need to prepare.
The news coming out of the Eurozone ranges from “not encouraging” on a good day to “frightening” on other days. U.S. and foreign stock market heaves and rolls leave me sea sick as my investment values bounce up and down, almost carelessly. The political and regulatory environment in this country leaves me shaking my head. Our clients’ outlooks for 2012 range from guarded optimism to bracing for a crash.
One of my contacts at a bank is looking for a Polish-speaking accountant to prepare financial statements for a client under a review engagement in the GTA West area.
Please contact me: eric.grossman@grossmancga.com
