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. 

According to a labour force survey, a 50-year-old Canadian man or woman in 2008 could expect to be in the workforce for at least 3.5 years longer than his counterparts in the mid-1990's. The average age of retirement has been stable since 2004 at about 62. Similar increases in life expectancy have stabilized the expected length of retirement at around 15 years for men and 19 years for women. Although hours of work must be taken into consideration, delayed retirement could mitigate some of the economic challenges of population aging the study revealed. With baby boomers staying put longer though, recent post-secondary graduates join the long queue waiting for job opportunities to arise. For more info: http://www.statcan.gc.ca/daily-quotidien/111026/dq111026b-eng.htm   Additional Educational Resources: Distinguished Advisors Workshop January and Master Your Retirement - How to Fulfill Your Dreams With Peace of Mind (2012 Version)  

  CRA has just announced the maximum contributory earnings for 2012 under the CPP, and  those figures generate a premium increase which at the maximum level will reach $2306.70 or $192.23 per month. Both employer and employee are required to contribution, which means that proprietors will pay $384.45 a month or $4613.40 when their contributory earnings are $50,100. The basic exemption remains at $3,500 (this amount has not been indexed to inflation for years) and therefore we see that premiums have actually increased by 4%. Meanwhile the expected rate of CPI inflation for 2012 has just been announced as well: it's 2%. That's quite a hike. This means that the maximum CPP pension for 2012 will be $986.67 per month. (Average of maximum pensionable earnings for last five years x 25% / 12 months)   Additional Educational Resources: Distinguished Advisors Workshop, Financial Recovery in a Fragile World book.  

General retrenchment of risk taking in the global economy has inhibited recovery in many areas. Uncertainty abounds in Europe, while weak consumer and investor confidence in the United States is expected to result in weak GDP growth. Sharp appreciation of the Yen is frustrating recovery and reconstruction in Japan, coupled with a decreasing demand for their consumer products. Growth in China, India, and other emerging markets is expected to slow to a more sustainable pace over the next year. While Canada is still in the eye of the global economic storm relatively, the domestic forecast has taken a turn for the worse since the summer. Domestic demand is likely to remain the primary area of growth, although at a slower pace than anticipated. Exports, on the other hand, are expected to remain weak, due to low foreign demand exacerbated by the persistent strength of the loonie. The Bank expects growth in Canada will be slow through mid-2012, but should pick up if the global economic environment improves and confidence is restored; it is projected that the economy will expand by 2.1 per cent in 2011, 1.9 per cent in 2012, and 2.9 per cent in 2013 with a return to full capacity by the end of that year. As a result of all of this, the Bank has decided to maintain the target for the overnight rate at 1 per cent and fiscal policies consistent with achieving the 2 per cent inflation target over the medium term. For more info: http://www.bankofcanada.ca/2011/10/speeches/opening-statement-83/ Additional Educational Resources: Debt and Cash Flow Managment, Financial Recovery in a Fragile World  

Let's pretend you are a prudent taxpayer, a paragon of fiscal responsibility. You follow every CRA bulletin and government statement in order to properly file your return accurately and timely every year. Last year however, you relied on advice that a CRA official gave to you over the phone regarding a special new tax credit you could be eligible for if you purchased qualifying ëgreen' home appliances. You sort of need a new refrigerator anyways and have been looking around, but you can only really afford the baseline model that does not qualify for this tax credit. As a result of relying on the CRA's advice though, you go and purchase a higher model, ëgreen' appliance which you have calculated will actually cost you slightly less after the tax credit; everyone wins! You are astonished to find that the Minister has disallowed your tax credit at the end of the year though- can he do that? It depends. Estoppel is an equitable legal doctrine that holds as follows: if one party makes a statement or representation of fact to another who subsequently relies on this information to their detriment, the person making the representation can be ëestopped' from reneging on their prior representation and hiding behind their literal, black letter legal rights (such as a contract for example). As an equitable doctrine, it infuses the harsh reality that can result from following the law with moral and ethical considerations that the judiciary have a wide discretion over and an even wider proscription of remedies for. Three factors give rise to an estoppel. First, there must be a representation, or conduct reasonably perceived as amounting to a representation, by somebody intending to induce a course of conduct from the person he is making the representation to. Secondly, the person to whom the representation is made must have relied on that representation, by act or omission, and thirdly, this must result in some form of detriment to that person. For taxpayers though, there is an important and pertinent rule within this doctrine: misrepresentations of law by government officials cannot give rise to estoppel. Therefore, misrepresentations and/or advice from the CRA based on their misinterpretation of taxation legislation cannot give rise to an estoppel. Now, this may seem truly unfair, and indeed it can have terrible results. However, the underlying theory is that, regardless of any egregious incompetent advice from government officials, estoppel cannot override the law of the land and the Minister is not bound to misapply the law. As a result, it is often said, incorrectly, that estoppel cannot be brought against the Crown in any circumstances. Estoppel can be brought against the Crown for misrepresentations of fact, but not law. For example, in Rogers v R (1998), a taxpayer relied on a statement made by a government official that the educational institution that he was thinking of attending was one in which a particular tax credit could be claimed. The taxpayer relied on this misinformation, because without it he wouldn't have enrolled, and it became detrimental to him when the Minister then denied his tax credit on the basis that his institution of choice did not qualify. The government was estopped from denying the taxpayer his credit because it would be unconscionable to do so and because it was a misrepresentation of fact, not law. The example above is analogous to Rogers and therefore the Minister could be estopped from denying your ëgreen' tax credit.   Greer Jacks   Additional Educational Resource: Evergreen Explanatory Notes, and Essential Tax Facts 2012  

The Government is inviting commentary from stakeholders on RDSPs to ensure that the plans are meeting the needs of the recipients. "It is important for those who benefit from these plans to give their input, so that RDSPs continue to accurately reflect and address their true needs,î said Minister Flaherty. It is hoped that the review will highlight issues crucial to the success of the RDSP with changes foreseeable in the establishment of plans, the accessibility of plan savings, details on plan termination, and the administration of the RDSP in general. For more info: http://www.fin.gc.ca/n11/11-103-eng.asp   ADDITIONAL EDUCATIONAL RESOURCES: Distinguished Advisors Workshop  

The Minister of Finance released updated growth projections from fifteen leading private sector forecasters. The outlook has deteriorated since the last survey in March, and as a result of economic uncertainties in the United States and the prevailing situation in Europe, the forecasters believe that growth will be hampered in Canada throughout 2012. The Minister called for decisive action to sustain global recovery on October 25th,  at the fifth annual meeting of the Toronto Forum for Global Cities. This comes after Minister's call on European leaders and the G-20 on October the 17th in Dublin to address the current economic challenges by acting quickly and in unison and by implementing strong, consistent policies. The Minister stated: "Events during the summer have made it clear that global economic challenges are by no means behind us. The pervasive force of uncertainty is a major inhibitor to growth, and it demonstrates the fundamental need for close cooperation in a global context.î The Minister expressed his concern for the European debt crisis; he feels as though that is the most pressing international issue at the moment and is capable of bringing the world into another recession if immediate action is not taken. "Delays will only make necessary choices more difficultî he stated. The Minister was also in Paris on the 15th where he welcomed the ambitious reform policies of the European economic governance and the implementation by Euro area countries of the actions necessary to increase the capacity and the flexibility of the European Financial Stability Facility (EFSF). In fact, all the ministers believed that they have formulated a plan that will address vulnerable sectors of each economy, whereby: - Advanced economies with large surpluses will shift to growth with a focus on domestic demand, while those with deficits will implement policies to increase national savings;- Emerging markets will adjust macroeconomic policies to maintain growth and contain inflation; - Surplus emerging economies will accelerate reforms to rebalance demand toward domestic consumption; In addition, all countries will undertake further structural reforms to raise potential growth, create jobs and maintain stability in the banks and markets. More from the Minister in Toronto: http://www.fin.gc.ca/n11/11-105-eng.asp More info from Dublin: http://www.fin.gc.ca/n11/11-102-eng.asp More info from Paris: http://www.fin.gc.ca/n11/11-101-eng.asp   ADDITIONAL EDUCATIONAL RESOURCES: Distinguished Advisor Workshop