Elbows Up: The Time for Personal-Corporate Tax Reform is Now

One can’t avoid the messaging of the economic pain to come. Our deteriorating economic relationship with our biggest trading partner will require us to “pivot and prosper” in order to emerge “stronger and more resilient” says our Prime Minister. While exactly how we will do this is still unclear, there is one clear opportunity: for both federal and provincial governments to initiate a significant personal and corporate tax reform in the upcoming fall budget.

A flurry of recent media activity has raised the red flag on how deep in the red most Canadians are, reporting that more people are carrying higher levels of debt than at any other time in history.

An outcry from Hollywood means Ontario will delay tax credit cuts.

The Notice of Ways and Means Motion and Explanatory Notes for the tax provisions of the April 21, 2015 Federal Budget were tabled on May 4, and contain the detail required to set up family tax and wealth planning strategies for the 2015, 2016 and future tax years as envisioned in this document.   

It appears that tax cheaters are having a bigger effect on economic activity than tax free savers, when the cost of raising TFSA limits are contrasted with the cost of lost tax revenues due to the Underground Economy (UE).

Courts generally have the power to award costs against unsuccessful parties. These cost awards can be more severe depending on the conduct of the parties, and they are, therefore, a great way to dissuade frivolous litigation.

Financial Planners and Tax Specialists, together with Owner-Managers of Canadian Controlled Private Corporations (CCPCs) will need to review the compensation and retirement planning arrangements currently in place to ensure they are not eroded by recent federal tax changes.