Claiming Medical Expenses: Free Healthcare?

Free Health Care? Did you know that Canadians spend on average more than $1,000 on medical expenses each year? It’s estimated that government programs, via our taxes, cover about 72% of medical expenses, which means that we pay for the rest. Your clients may be over-paying on their taxes because they don’t know about medical expense deductions. 

Terry Jenkins, executive vice president and head of U.S. Private Banking for BMO Harris Bank, joins the lineup of knowledgeable and respected speakers at this year's Distinguished Advisor Conference (DAC) in Naples, Florida, Nov. 11-14. Diana Juricevic, one of Canada's most powerful women, and author and portfolio manager Richard Croft are also among the speakers that highlight the newly released agenda. In its ninth year, this year's DAC, entitled "Navigation: Charting a New Course,î will focus on helping advisors of all stripes chart a course through the treacherous waters of the post-crisis global economy. Evelyn Jacks, Knowledge Bureau president and founder of the conference, says it's more important than ever for professionals from all disciplines ó tax, investment, retirement, and estate and succession planning ó to improve the quality of their conversations with their clients. "The calibre and experience of the speakers at this event,î says Jacks, "will impart significant knowledge, insights and skills to help advisors navigate the still-fragile economic recovery.î The speaker list includes: On Monday, Nov. 12, Leading economist Patricia Croft will discuss why our near-future includes a bullish equity market and strong Canadian dollar; Terry Jenkins will explore client segmentation in the high-net worth marketplace; Scott Mackenzie, president and CEO of Morningstar Canada, will explore better portfolio construction using research and technology; Financial guru Gordon Pape will look at investment options in 2013. On Tuesday, Nov. 13: Diana Juricevic will discuss humanitarian responses for financial advisors who are advocates for clients; Madeleine Dion Stout, award-winning Cree speaker, will discuss planning for Indigenous communities; Catherine Bell, international speaker, will show delegates how to link new client loyalty and effective professionalism; Dr. Paul Ziemer, senior advisor Gillian Stovel Rivers and author Rick Atkinson ó respectively health, wealth and retirement planning coaches ó will demonstrate how collaborative coaching can empower advisors and their clients. On Wednesday, Nov. 14: Well-known portfolio manager and author Richard Croft will discuss collaborative wealth management within a changing regulatory landscape; Knowledge Bureau authors Robert Ironside and Doug Nelson will analyze the importance of currency fluctuations when investing in foreign property; Lawyer John Poyser will take the audience through an "executor school.î Early registration discounts end June 30 and inexpensive airline seats are still available with DAC's group discount program. To register, call 1-866-953-4769 or fax the registration form  to 204-953-4762 or email to reception@knowledgebureau.com.

In a recent decision concerning a bailiff firm and its insurer, the Quebec Superior Court made it very clear conflicts of interest must be avoided. When an insurer mixes self-interest with the best interest of its client, the client's interests are not served ó and the insurer pays the price. The case, Taillefer v Continental Casualty Company, involves a complicated set of facts pertaining to a bailiff firm, Paquette & Associés, and Continental, the provider of its professional liability insurance. The case evolved from the Cinar scandal, in which, in 1998, Cinar president Ronald Weinberg and other executives of the Montreal-based animation company were charged with 36 counts of fraud related to $120 million stashed in a Bahamian bank account. (For background on the Cinar scandal, click here.) As the case against Weinberg progressed through the courts, the court authorized the sale of Weinberg's properties. In 2006, Paquette invested the proceeds in asset-backed commercial paper (ABCP). Unfortunately for Paquette and Weinberg's creditors, by the time the Court of Appeal authorized the distribution of the proceeds, the ABCP had disappeared in the 2008 market meltdown. In May 2009, Paquette was forced to borrow close to $4.5 million to satisfy the creditors. The crux of Taillefer revolves around what happened next. As law firm Norton Rose Canada LLP outlines in its update, Paquette asked its professional liability insurer to indemnify it for the ABCP loss and to assume the costs incurred in defending its interests in the lawsuits that led to the situation. The insurers, however, refused to cover the loss, leading to a dispute before the Quebec Superior Court. The facts of this case are complicated but that does not mean that we cannot learn something from this jurisprudence. The court ultimately decided against the insurer largely because of the insurer's conduct from the time it was informed of a possible claim against Paquette. Most important for the court, the insurer gave Paquette contradictory information, sometimes even in the same communication. During one such instance, the insurer told Paquette that it was appointing a law firm to defend Paquette's interests in the case but that the same attorneys also had a mandate to defend the interests of the insurer. In view of this, Justice Jean-Yves Lalonde of the Quebec Superior Court concluded that the insurer created a confusing and ambiguous situation by appointing counsel with these dual mandates. This placed the attorneys retained by the insurer in a conflict of interest situation and asked them to act in a manner that was contrary to their duty to protect Paquette's interests. The court ultimately found in favour of Paquette. As the Supreme Court of Canada stated in the leading judgment on the issue of conflict of interest, Neil (2002), a conflict arises when there is a substantial risk that the lawyer's representation of the client will be materially and adversely affected by the lawyer's own interests or by the lawyer's duties to another client, a former client or a third person. As this decision clearly reveals, conflicts of interest must be avoided not only to avoid putting the administration of justice into disrepute, but also to avoid the massive fiscal and legal ramifications that might arise. Greer Jacks is updating jurisprudence in the EverGreen Explanatory Notes, an online research library of assistance to tax and financial professionals in working with their clients.  

Checkmated once again by global economic events, the Bank of Canada kept the overnight rate at 1%, which would seem to indicate, despite pundits' earlier speculation, Canadians aren't going to see interest rates change anytime soon. And when they do change, the central bank has signaled, the direction will be upward, not downward. "To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed,î the Bank of Canada press release said, "some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2% inflation target over the medium term.î CIBC economist Avery Shenfeld put it another way in his recent comment: "Governor [Mark] Carney, and his team at the Bank of Canada, are not ready to throw in the towel on their reasonably optimistic outlook, or the resulting need to raise interest rates down the road. While conceding that the global picture is more troubling than it appeared back in April, in contrast to financial markets betting on a rate cut, the central bank made clear that it still sees its next policy change as a hike from the low 1% rate it chose to retain today.î Certainly, Carney has guarded his language and hedged his bets. As this quarter indicates, the economic environment can change dramatically in a matter of months. As of April, Greece is back in the headlines and euro zone events have weighed on global economic health. Growth in China, Brazil and India has disappointed and economists worry about the "spillover effectî on the Canadian economy. The domestic scene is also worrisome with GDP up by a mediocre 1.9% in the first quarter, as CIBC economist Emanuella Enenajor noted, "tracking last year's fourth-quarter pace.î Exports have indeed slowed measurably. But, adds Enenajor, "home-grown momentum also waned, with final domestic demand slowing to 1.3%, the fifth straight quarterly deceleration.î On the bright side, noted the Bank of Canada, the Canadian economy continues to operate with "a small degree of excess capacityî with total CPI inflation falling below 2% and core inflation remaining around 2%. But the downside risks are piling up. And in Canada there is that nagging, consistent worry about rising household debt in an environment in which growth in household income is moderate ó at best. The Bank of Canada noted the "slightly slower than expectedî growth in the first quarter and the stronger than expected housing activity. That supports the need for the withdrawal of monetary policy stimulus ó or higher rates. As Leslie Preston, TD Bank Group economist, summed it up in a recent report: "Today's statement struck a very prudent balance, acknowledging the weaker global economic outlook, but also reminding markets (who had priced in a chance of a rate cut by yearend) that barring a global catastrophe the next interest rate move will be up, not down.î   Additional Educational Resources: Debt and Cash Flow Management and Financial Recovery in a Fragile World.  

Facebook's recent public offering captured the dreams of many, who ó upon seeing imagination and innovation translate into riches ó enthusiastically invested. By the end of its first week of trading, however, it was clear it takes a strong stomach to play in today's volatile markets. Yet, if you are to avoid the eroding effects of inflation and future taxes on your wealth, you need to invest in equities. That means managing risk ó and embarking on your investment journey with a strategic plan firmly in hand. There is no doubt that, given the global financial crisis and the unprecedented volatility of global markets in recent years, we are in uncharted waters. Navigating the many hazards requires discipline and skill ó and a plan. That's why the theme of this year's Distinguished Advisor Conference (DAC) is Navigation: Charting a New Financial Course. It is all about managing risk by planning. An annual event from Knowledge Bureau, DAC focuses on educating financial advisors from all specialties in the most recent trends in and solutions for sustainable wealth management. This year risk management is the focus and an outstanding lineup of knowledgeable speakers will address the elements you should consider when charting your course. (To view the preliminary agenda for the conference, click here.) For example, Patricia Croft, an independent economist whose area of expertise is global macro economic analysis, will make the case that re-entry into the markets is necessary to make progress in building wealth. It is understandable, says Croft, a Day 1 speaker, that shell-shocked investors, weary of the financial crisis, should be extremely shy of equities. Croft, the president of Croft Consulting, will examine the global economic environment and its implications for Canadians' asset-allocation strategies. Voted one of the top economists in Canada, Croft is especially bullish on the Canadian dollar and will explain why. It's Your Money. Your Life. Investment risk takes many forms: political, economic, legal, tax, security, to name just a few. Successful captains set course with a plan that takes into account the anticipated risks before steering their ships into rough seas. For investors and their advisors, that makes risk management a key element in joint decision-making. Evelyn Jacks is president of Knowledge Bureau and founder of the Distinguished Advisor Conference, now in its ninth year. This annual event attracts hundreds of top advisors from across Canada to discuss the most recent trends in economics, tax, investment, retirement and estate planning. Educational Resource: Distinguished Advisor Conference and Elements of Real Wealth Management Course.  

How you structure your investment portfolio will determine how well you sleep at night and no one knows that better than Scott Mackenzie, president of Morningstar Canada. On Monday, Nov. 12, Mackenzie will take to the stage at Knowledge Bureau's Distinguished Advisor Conference (DAC) to discuss "Building portfolios to navigate post-crisis waters.î "A well-constructed portfolio will take into account not only macro economic events but also individual economic events,î says Evelyn Jacks, president of Knowledge Bureau and founder of DAC. "A well-constructed portfolio will reflect your reaction to risk and meet your long-term needs, making it a crucial part of your wealth-management strategy.î This year's DAC takes place Nov. 11-14 in Naples, Florida. Mackenzie, who has more than 20 years experience evaluating the performance of investments, joins a roster of knowledgeable and well-known speakers. (To view the preliminary agenda for the conference, click here.) In his session, Mackenzie will examine current research around asset allocation and discuss how that applies to investment selection in an environment of ongoing financial crises, post-2008. Conference attendees will learn what works ó and what does not work ó in constructing a resilient portfolio. "According to the World Economic Outlook,î adds Jacks, "the global recovery is threatened by intensifying strains in the euro area; growth prospects have dimmed and downside risks have escalated. That makes portfolio construction a crucial consideration.î To register for DAC call 1-866-953-4769 or download a registration form and fax it to 1-866-953-4762.

New on the Canada Revenue Agency (CRA) website is the C-100. This circular explains how a corporation, which is insolvent, can get its GST/HST refunds without filing a corporate income tax return. The three-part circular explains the legislative framework, the requirements for having the corporate tax return waived and the process for redress, if necessary.Legislation: Subsections 229(2), 230(2), and 296(7) and section 77 of the Excise Tax Act provide that the CRA cannot release a refund or rebate to a taxpayer if that taxpayer has not filed all required tax returns. But the Income Tax Act does give the CRA some leeway in administering the tax system fairly and reasonably. That means, in some circumstances, an insolvent company can apply to have the requirement to file a corporate income tax return waived. Guidelines: If the CRA is satisfied that an insolvency practitioner cannot file a corporate income tax return because of that taxpayer's circumstances, then the CRA may provide relief from the requirement to file. Subsection 220(2.1) empowers the CRA to decide whether to waive the requirement to file a prescribed form, receipt or other document required under the Act. The IC-100 gives the following example of when a request for a waiver will be approved: "Generally, a request for a waiver will be approved when, because of circumstances beyond the insolvency practitioner's control, insufficient books and records are available to prepare the corporate income tax return(s) that are required from the taxpayer.î The CRA stresses that this route is not to be used by insolvency practitioners as a way to avoid their compliance responsibilities.To make a request, an insolvency practitioner must fill out Form RC342, Request by an Insolvency Practitioner for a Waiver of the Requirement to File a T2 Corporation Income Tax Return, and send it to the Regional Intake Centre for Insolvency (RICI) serving his or her area. The information required by the CRA to make a successful application can be found on this form, as can the addresses of RICI offices. The CRA will consider the taxpayer's history of compliance, the culpability of the taxpayer for the situation in which it now finds itself, and any other relevant criteria. Redress: If the CRA denies your request, your only redress will be proving the CRA did not consider the true merits of the application and that there was an element of prejudice or bias. This is a serious assertion; thus, a second review is rare. In the event that it does occur, however, CRA officials who were not involved in the initial application will review the subsequent application for relief. Insolvency practitioners can also apply for judicial review of a CRA decision to the Federal Court pursuant to Section 18.1 of the Federal Courts Act. This application must be made within 30 days of the date the decision was first received by the insolvency practitioner and must include the completed Form 301, Notice of Application. It is imperative to note, however, that judicial review is a last resort for administrative decisions. Therefore, courts are reluctant to engage in their own review unless the administrative course has been exhausted, that is, insolvency practitioners have asked for a second review by the CRA. Upon review by the court, the court will not substitute its decision, but will refer the matter back to the CRA for reconsideration. Greer Jacks is updating jurisprudence in the EverGreen Explanatory Notes, an online research library of assistance to tax and financial professionals in working with their clients.   Additional Educational Resources: EverGreen Explanatory Notes and Introduction to Corporate Tax Preparation.