CB Blog

CB Blog

March 12, 2018 by John Oakey

Taking action on passive investment rules

If you listened closely on budget day, you could hear a sigh of relief across Canada after the federal government announced new rules on passive investment income. Largely considered a fair improvement from previous iterations of the rules, many tax practitioners welcomed the changes. However, not all were pleased. And some were far from relieved.

February 23, 2018 by John Oakey

Finance forecast: 6 areas to watch in Budget 2018

For comprehensive post-budget analysis delivered directly to your inbox, sign up here.

Minister of Finance Bill Morneau has announced the 2018 federal budget will be tabled Feb. 27, 2018. Last year’s budget was delivered with a projected deficit of $28.5 billion and focused on several key areas, including skills development, innovation and middle-class jobs, among others. While the government is usually tight-lipped on the precise content of the budget, this year’s pre-budget report prepared by the House of Commons Standing Committee on Finance provides some indication on the government’s considerations.

February 12, 2018 by Ryan Kitchen

Take advantage of AMT opportunities, farmers!

Most people in the farm industry know they can sell qualifying farm property as a sole proprietor or partnership and use their lifetime capital gains exemption to avoid paying tax on the sale. However, many are unaware of the fact that there is a second calculation called the Alternative Minimum Tax (AMT).

January 31, 2018 by Peter Hobb

How to avoid conflict in a family business

Running a business involves many moving parts, which makes conflict unavoidable. However, the conflict within a family-owned business is more complicated than conflict between non-related employees because the line between business and personal relationships is blurred. There is a deeper connection between family members, which can bring heightened emotion to disagreements and conflict. When dealing with discord in a family business, the resolution needs to consider both the potential impact on family relationships outside of the business and the potential impact on business performance. 

January 4, 2018 by Ryan Kitchen

The pros and cons of deferred grain income

When the federal budget was announced last March, many missed the announcement of a consultation program exploring whether or not the Canadian government should continue allowing farmers to defer grain income. Part of the government’s efforts to promote a fair tax system, this program gave everyone affected by this issue an opportunity to provide input. There are several credible arguments for and against deferred grain income, but these are the most widespread and persuasive positions.

January 4, 2018 by Bob Boser

Tax reporting has changed for principal residence sales

If you sell property, you are required to report the sale in your tax return. However, if the property you sell is your principal residence, the gain you realize on the sale is not taxable, as there is an exemption on the gain realized on a principal residence. In the past, Canada Revenue Agency’s administrative policy was that you did not have to include the sale in your tax return if the property was your principal residence for all years it was owned. This policy changed in 2016, and CRA now requires everyone to report the sale in their tax return. While the sale of a principal residence is still tax free, there is a penalty if you fail to report the sale.

December 29, 2017 by Mario Patenaude, Tammie M. Sorensen

Use evidence-based HR to grow your organization

Human resources managers tend to be most concerned with acquiring staff, the exit of workers from the organization, training and development, the administration of pay plans, benefits and other traditional HR issues. What this emphasis overlooks is the overall strategy of the business, and how effective an HR team can be at supporting or enabling that strategy.

December 6, 2017 by Christin Giebelhaus

3 key disclosure areas in your year-end financial statements

If you are a controller or CFO preparing your year-end financial statements for shareholders, regulators and lending institutions, there are several disclosure items you should carefully consider. Over the last several years, accounting and securities regulatory bodies have had a great deal to say about this subject. The following three areas are especially significant.

December 6, 2017 by Michael Barclay

Overcome succession challenges facing your family business

Canada's succession planning rules can make it less costly from a taxation standpoint to sell a family business to a third party than to a family member. However, this depends on how the deal is structured. Typically, when you transfer to a family member, there is some sort of discount and freeze on the shares. For instance, if parents take back preferential shares and the next generation buys common shares at a relatively nominal value, this turns the proceeds for parents into dividend income, as opposed to capital gains. 

November 28, 2017 by Thomas Blonde

9 issues to consider when incorporating your farm business

In a 2012 article, I summarized a few of the major planning items that need to be considered before and after incorporating a farm business. Over the last five years, some of these issues have changed and some have stayed the same. If you have consulted with your Collins Barrow adviser and decided incorporation is right for you, it is important to have an up-to-date understanding of these issues to ensure your corporation is set up correctly. This article offers a refresher on nine important aspects of incorporation, helping your business devise the most optimal tax strategy.

November 23, 2017 by Robert Fischer

How AgriInvest and AgriStability are changing

AgriInvest and AgriStability are two government subsidy programs that have been extremely valuable to Canadian farmers in recent years. AgriInvest allows farmers to put a percentage of their sales into a fund, where these contributions are matched by the government. The idea is to put money away in your best years, creating a cushion if you are ever short of cash or need extra funds to pay for equipment and supplies. 

November 21, 2017 by Denver Nicklas

How good records benefit your farm

Even if you run a successful farm business, there is probably room for improvement in your record-keeping. Good records provide a snapshot of your operation and a more precise sense of where your business is throughout the year. 

November 9, 2017 by Denise Jones

Improving the financial literacy of board members

For board members, understanding the organization’s financial position is a necessity for effective oversight, as well as a fiduciary duty. But when it comes to the financial discussions, we see many board members “zone out.” Without an appropriate level of understanding, the right questions may never be asked, potentially putting the organization at financial risk. Management and board leadership need to collaborate to ensure all board members have at least a basic understanding of how the numbers work, the relevant metrics and the reasons they are important for the organization.

September 13, 2017 by Jason Melo

Non-resident / U.S. companies doing business in Canada

In many cases, foreign companies doing business in Canada are in need of additional expertise to effectively navigate the Canadian tax system. Specifically, U.S. companies find themselves confronting a tax environment that is very different from their domestic system. When doing business in Canada, here are some of the key tax considerations foreign companies should be prepared to navigate.

September 6, 2017 by John Clausen, Michael Rose

A quick guide to platform acquisitions

When growing through mergers and acquisitions, there are generally two distinct types of acquisitions: (1) the platform acquisition and (2) subsequent one-off acquisitions. When a company expands into a new market, the expansion often comes in the form of a platform acquisition, the initial acquisition that a private equity group makes to enter an industry with the intent to roll up (or acquire) other companies in an industry. (One-off acquisitions consist of companies within an industry in which the buyer already operates.) The acquiring company entering the new market usually seeks a business with an already sizeable operations base, which then becomes the platform from which to launch further expansion. The term “platform acquisition” originates from the private equity sector, where platform investments are very common.

August 29, 2017 by Shauntelle Hoffman

Issues facing Canadians selling U.S. real estate

Canadians selling U.S. real estate face a number of challenges, most notably the difficulty in finding someone with special training on this topic. Given the high U.S. dollar, many Canadians are now looking to dispose of their U.S. property, but not many advisors have carefully researched this topic and developed the expertise necessary to help with these sales. As a result, the escrow agent, the real estate agent and the accountant you deal with may offer conflicting advice. In order to make sense of their perspectives and cope with the limited expertise available, be sure to keep the following issues in mind when selling U.S. real estate.

July 31, 2017 by Leanne Alexander

Using replacement property to defer capital gains on farmland

With replacement property rules, you can purchase farmland to replace a previous piece of farmland sold – as long as it’s used in the same (or a similar) business – and elect to defer any capital gain that might be incurred. Replacement might occur for the following reasons:

(a) farmers swap land with neighbours due to proximity to their farm business
(b) land is expropriated by government bodies and farmers find replacement land to continue their operations
(c) succession planning

July 24, 2017 by Rosa Maria Iuliano

HST challenges physicians face

Many doctors work their entire career without needing to collect HST for their services, but there can be many exceptions to this rule. For a medical service to be exempt from HST, (a) it must be rendered to a particular individual, (b) the doctor must be licensed under the laws of the province to practise the profession of medicine (or dentistry), (c) it must be a consultative, diagnostic or other health care service that is a qualifying health care supply and (d) it must not be a cosmetic service supply, nor a supply in respect of a cosmetic service supply not meant for medical or reconstructive purposes. Doctors doing work outside these paramaters should keep the following HST rules in mind.