2019 Federal Budget Commentary

Finance Minister Bill Morneau’s message with Budget 2019 is that, thanks to the Federal Government’s investments over the past three years, things are going well — especially for the middle class: more Canadians have full-time jobs, unemployment is at historic lows, wages are growing, consumers and businesses are confident, economic growth is good, and our debt is manageable.

Nonetheless, says Morneau, more needs to be done to ensure Canadians’ prosperity over the coming years. For the most part, that means adding tax credits and other incentives and enhancing existing ones, giving the Canada Revenue Agency more resources to recover unpaid taxes and to help businesses comply, measures to reduce tax evasion and aggressive tax avoidance, improving retirement and disability savings plans, and introducing the framework for a national prescription drug plan.
Read More»

Bartering, the Internet and Taxation

The normal procedure for business transactions follows the tried-and-true method of selling a product or service and recording the income. The income earned is taxable as earned income. Rather than use the traditional approach, many individuals and businesses may decide to barter their products or services.

Did you know that good business practice would suggest that you treat all barter and internet transactions as you would normal business transactions? If you ever face a CRA audit, it will help spare your corporation, proprietorship or partnership the inconvenience of a long, laborious tax audit and potential penalties and interest – or even being convicted for tax evasion.
Read More»

Impending Changes to CPP

In 2018, many owner-managers across Canada chose to adjust staff levels, wages and prices when the minimum wage was increased. For many, it is still too early to determine the final impact on the corporate bottom line as a full fiscal year has not been completed.

With the adjustments of 2018, owner-managers may not have looked at budgets for 2019, but considering changes in the Canada Pension Plan (CPP), it may be time to start projecting 2019 and beyond.
Read More»

We Owe How Much? … OUCH!

Manage cash flow better by projecting future tax liabilities. Unforeseen circumstances often leave owner-managers short of the cash needed to pay federal and provincial taxes. Unfortunately, many owner-managers consider unpaid tax bills to be the same as unpaid trade credit. They are not. Unpaid taxes can cause a lot of problems. Ensuring funds are available to pay obligations to the Canada Revenue Agency (CRA) should be a top priority for any business, whether incorporated or a sole proprietorship.
Read More»

The Little Black Book of Scams

A few common-sense strategies can protect your business from external fraud. Scams and frauds are probably as old as humanity, but recently they have taken a new turn with the arrival of the Internet and the development of sophisticated telecommunications technology. The Government of Canada has reacted by setting up the Canadian Anti-Fraud Centre, and the Competition Bureau has published a valuable handbook called The Little Black Book of Scams (full text available at www.competitionbureau.gc.ca), which describes 12 important classes of scam and how to protect yourself against them.
Read More»

CPA Canada Federal Budget Commentary 2018

The Federal Government’s 2018 Budget touts Canada’s strong economic growth over the past two years, including real GDP growth of 3.2 per cent since the second quarter of 2016, an unemployment rate of 5.9 per cent, and significant improvements in average weekly earnings, consumer confidence, and household consumption. The Finance Minister expects similar growth in the near-term. In addition, federal revenues increased by more than 11 per cent in 2017, largely from personal and corporate income taxes.
Read More»

For the Record

To run an owner-managed business successfully, it is not enough just to track the movement of funds in and out. Statements providing the type of information needed by your external CPA are also essential because the external accountant is the intermediary between your business and the Canada Revenue Agency, creditors, a potential buyer and others who need the special financial statements only your external accountant can produce.
Read More»

Financial Statements for Your External CPA

To run an owner-managed business successfully, it is not enough just to track the movement of funds in and out. Statements providing the type of information needed by your external CPA are also essential because the external accountant is the intermediary between your business and the Canada Revenue Agency, creditors, a potential buyer and others who need the special financial statements only your external accountant can produce.
Read More»

Registered Retirement Savings Plans

The 2017 RRSP contribution limit is 18% of your 2016 earned income to a maximum of $26,010. (For those who have not topped up every year, this is the additional room now available.) Earned income includes self-employed net income, net income from a partnership, payments from supplementary unemployment benefit plans, CPP/QPP disability payments, salary, wages, taxable alimony or maintenance received, royalty and net research grants and net rental income.
Read More»

Investing for Retirement

Saving for retirement can be approached in several ways.

Media ads constantly bombard us with images of happy, attractive couples enjoying their retirement years on a sunny beach in Jamaica or on a cruise ship in the Mediterranean. But to reach that dream, it is necessary to invest today’s earnings so that they will grow into tomorrow’s retirement fund.
Read More»