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.
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by June Rudderham of Nelligan O’Brien Payne LLP
A holding company is a company that owns shares in another company. If the holding company owns the majority of shares of another company, it is also referred to as a parent company. It generally does not produce goods or services itself. The sole purpose of a holding company is usually to own shares in another company.
The reasons for establishing holding companies are diverse. They may be created to operate for a short period of time or as part of a long-term plan. Whether it is better to form a holding company to hold your shares rather than you holding them personally requires significant consideration of your individual circumstances and proper advice from qualified professionals. Factors to consider include the nature and revenue of the business, the jurisdiction in which the business owner resides, and the business owner’s long term goals. In this article I have outlined some of the benefits and drawbacks associated with creating holding companies.
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by Chris Huband of Blake, Cassels & Graydon LLP
Bare trustees or nominees are often encountered in mortgage lending situations. Both borrowers and lenders need to know how to deal with a bare trustee in order to avoid potentially serious consequences.
What is a Bare Trustee?
A bare trustee, or nominee, arrangement exists where:
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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
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by Mark McElheran of Stikeman Elliott LLP
It remains to be seen whether the reform fever that is presently sweeping through the US securitization market will continue unabated across the 49th parallel but there is no question that these monumental reforms have given rise to a considerable amount of discussion and debate over the appropriateness of similar reforms in Canada. This was perhaps inevitable given the degree of economic integration between the two countries and the fact that both have recently suffered through significant ABS-induced crises (albeit on entirely different scales).
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Tags: bank, bankruptcy, bubbles, Canada, debt, Economics, finance, insolvency, lender, securitization, trend
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).
Bank of Canada business outlook survey
A little something for everyone
Both the Q1/10 business outlook survey and the senior loan officer survey were largely as was expected. The headline future sales sentiment index remained strong at 44.0 vs. although somewhat softer than the previous quarter’s 49.0 as the initial flush of economic recovery begins to fade. And while inflation expectations drifted higher in the first quarter of 2010, conversely, the index of capacity constraints remained benign.
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Caisse Drummond Supreme Court of Canada Decision
by James H. Archer and Candace Pallone of McCarthy Tétrault LLP
In June of 2009, the Supreme Court of Canada dismissed an appeal from the Federal Court of Appeal in the Caisse populaire Desjardins de l’Est de Drummond v. Canada case.
The facts of this case are as follows: On September 18, 2000, Caisse populaire Desjardins de l’Est de Drummond (Caisse Drummond)
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By Norman I. Kahn of Aird & Berlis LLP
Introduction
Following and sometimes in anticipation of a default by a borrower, the mortgage lender must decide whether to proceed to enforce its rights under its security as soon as its right to do so has crystallized, or whether to work with the borrower to attempt to resolve the pending or actual crisis in their relationship. Unless the lender is prepared to waive the default entirely, some positive action is almost always recommended to the lender by its legal counsel.
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By Mark E. McElheran of Stikeman Elliott LLP
The 2010 Canadian federal budget was delivered on March 4, 2010. The budget contains a number of interesting developments and implications for the Canadian structured finance market.
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