Tax Pros: Canada’s Tax System Has Taken a Big Hit

Canada’s tax and financial pros weighed in enthusiastically on last month’s two-part Knowledge Bureau Report Opinion Poll in which we asked: "Do you believe Canada’s tax system based on self-assessment, has suffered under recent changes at CRA and by Finance Canada?" 71% said yes. Part 2 was this question: "If so, what is the one wish you have for tax reform?" The responses were very interesting:

Things have changed for Canadians in their pre-retirement planning period.  High interest, inflation and consumer debt are eroding away “savings room” for private savings, and longevity risk is increasing.  As a result, preserving access to indexed public pensions – the CPP and the OAS - is now more important than ever in retirement income planning.  Doing so is complex. That’s why, well informed tax and financial advisors can add significant value.       

The April 16 federal budget proposed capital gains taxes that penalize those who have used their knowledge, skills and resources to make responsible financial decisions and has widely promoted tax and financial concepts that are not quite on the mark.  That introduces the potential for three unfortunate outcomes: uncertainty that stifles investment and initiative, increased financial illiteracy and worse, potential injustices when tax changes are politicized to pit one generation against another.  Fortunately, tax and financial advisors can help to restore shaken confidence in their important roles as educators and intermediaries.  Here are the issues to consider:  

Successful retirements, from a financial point of view, are about three phases of planning:  pre-retirement, in-retirement and after-retirement. While a regular process for saving, investment performance metrics and deaccumulation methods are all very important, retirement income planning is really about one strategic goal:  what matters is what you keep.

It is so important for tax and financial advisors to help distill fears and knee-jerk reactions in light of the April 16 Federal Budget.  Join members of the Society of Real Wealth Managers on May 7 at Noon CT for a frank discussion and open forum online, about the need for tax literacy and a multi-stakeholder approach to intergenerational wealth management that pushes back on the fear factor.

The April 16 Federal Budget proved once more that one of the most important skills people working in the financial services can offer is a deepened knowledge of personal, corporate and trust filing requirements. This is an essential financial service to help households navigate the increasingly broad – and expensive - reach of the CRA, especially for investors and business owners.  Knowledge Bureau’s suite of newly updated certificate tax, bookkeeping and retirement planning courses are now available online, together with a special offer.  Course benefits and descriptions follow:

Governments are long on promises but short of money these days, as deficits grow both provincially and federally.  Will prior tax preferences be maintained in the next federal budget, or will they be clawed back?  Here are some provisions worth watching: