Opportunity: Canadian Dollar Stabilizes, Somewhat

Things have started to turn around for the Canadian dollar in the second quarter of 2025. It hit a 22 year low in January of 2025. Investors and property owners, who have been swooning at the high burn rate in their travel plans and property maintenance abroad, may wish to consider recent more positive trends and consider some risk mitigation opportunities now that the dollar is stabilizing somewhat.  

Tax and financial advisors will be interested in CRA s new handbook on securities transactions. The handbook discusses who has to file a T5008 information return to report securities transactions, including some interesting situations like: What are the reporting rules for a hot topic in today s marketótraders in precious metals? (did you know, pawnbrokers who buy gold rings don t have to file a T5008 slip) What are the tax reporting rules for investment counsellors? (they usually use the services of a broker or agent in serving clients but must file form T5008 if they act as agents for their clients in buying and selling securities) The guide goes on to explain the T5008 is not required to report the exchange of old shares for new shares occurring in the course of a reorganization of the capital structure of a corporation as long as the exchange meets the requirements of section 86 of the Income Tax Act, and no consideration other than new shares is receivable. Among other topics, reporting rules for the dissolution and continuation rules for partnerships are also discussed. For more information click here.

It appears CRA is auditing taxpayers who have excess contributions in their RRSPs these days, this can be a nightmare for those who find form T1-OVP daunting. Updated by the agency on February 9, it is worth taking a look at the new simplified version, which hopefully will make life a bit easier for tax practitioners and financial advisors alike. Check out the following links: T1-OVP Individual Tax Return for RRSP Excess Contributions T1-OVP-S Simplified Individual Tax Return for RRSP Excess Contributions In addition, a new guide was posted providing instructions for the reporting of Retirement Compensation Arrangements. The guide covers employer responsibilities relating to application for an RCA Account Number (Form T733), how to withhold and remit the refundable tax, how to report contributions made (Form T737-RCA), how to complete the T737-RCA slip and summary, and how to report the deductible RCA contributions to the employee. In addition the responsibilities of the custodian are outlined and penalties and interest costs described for those who fail to comply with withholding, remitting or filing requirements. For more information see T4041 Retirement Compensation Arrangements Guide 2007 The Knowledge Bureau is pleased to offer a new designation program for those consulting with clients in retirement income planning. The Retirement Income Specialist Program under the MFA Designation is now available. Please click here for more information.

On February 11, the government announced that Jim Flaherty, Minister of Finance, will table the 2008 Federal budget in the House of Commons on February 26 at 4PM. The Knowledge Bureau will be pleased to bring highlights of the budget to your inbox in a special release of Breaking Tax and Investment News on the evening of the 26th. Subscribers to EverGreen Explanatory Notes will enjoy a more complete analysis within the week following the budget. If you've not subscribed yet, we invite you to take a look at EverGreen now. Click here to view the on-line demo now. National firms this is an authoritative, inexpensive and simple way for you to get budget analysis out to your associates and sales channels in the heart of RRSP and Tax Season. Call us to subscribe before February 15 for best pricing. Click here to subscribe or call us toll free now: 1-866-953-4769.

The Knowledge Bureau suggests a quick fix for fairness and equity this time around. Winnipeg, MB. January 29, 2008. The Knowledge Bureau, Canada's leading educator in the tax and financial services, has submitted its pre-budget suggestions to The Federal Finance Department recommending changes to improve fairness and equity in the tax system for Canadians. Tax savings from new pension income splitting rules introduced for tax year 2007 are lucrative, in some cases can add up to six figures in savings to the wealth of Canadians earning qualified pension income over an average 20 year retirement period, says Evelyn Jacks, President of The Knowledge Bureau and best-selling author of Essential Tax Facts. However because eligibility for income splitting is tied into the criteria for claiming the $2,000 pension income amount, the existing rules favor those who retire with employer-sponsored plans, (they can split income at any age), over those who have self-funded private pension savings from RRSPs, (who must be age 65 to benefit from pension income splitting). The flaw is in the age criteria for the pension income amount, says Mrs. Jacks. which results in a considerable disadvantage to the self employed and others who are not members of Registered Pension Plans. This needs fixing. Second, The Knowledge Bureau suggests improvements to two features of the Canada Pension Plan: Couples who have each maximum funded their CPP throughout their working lifetimes will find that on the death of one spouse, there will be no CPP survivor benefit. Surviving spouses should be able to benefit from the deceased's lifetime contributions. CPP lump sum death benefits, currently set at a single payment of $2500 are not indexed. They should be, especially in light of the survivor pension issue. Third, the cost of education has been rising in Canada, yet the amount of tuition, education and textbook credits that can be transferred to supporting parents, spouses or grandparents has remained at $5000. This threshold should be increased substantially to reflect the real costs of supporting a student financially. Finally, charitable giving rules should recognize both time and money. If we can figure out a way to give a community-based Fitness Credit for children, says Mrs. Jacks, why not give credits to those who volunteer at the community centre or other worthwhile community endeavors by creating tax recognition for volunteer time? Evelyn Jacks is one of Canada's most prolific international authors, speaker, educational publisher and an award-winning entrepreneur, having written 40 books, including the Essential Tax Facts series (annual editions in 2005 to 2008), Make Sure It's Deductible (3rd Edition, McGraw Hill) Evelyn is also co-author of a cutting edge team leadership title: Get Your People to Work Like They Mean It (McGraw Hill). The Knowledge Bureau, is a national post-secondary educational institute specializing in training inter-advisory teams in the tax and financial services to practice Real Wealth Management: the after tax, after cost accumulation, growth, preservation and transition of wealth. This includes planning strategically and tactically for financial stewardship, business succession, retirement income and tax efficiency with their clients. Her latest course is entitled Tax Efficient Retirement Income Planning, one of six courses in the Retirement Income Specialist Program, leading to the MFA Designation, offered exclusively by The Knowledge Bureau.

Remember Canadians who earn tips and gratuities are required to report this income on their annual income tax returns. Restaurant servers, hairdressers, valets, taxi drivers and others who earn tips may not have all of their income recorded by the employer and therefore not included on their T4 slips. The Income Tax Act is clear regarding the treatment of income from tips and gratuities. All tips are taxable and it is your responsibility to report any you receive. The Canada Revenue Agency is committed to administering and enforcing the Income Tax Act in a fair and equitable manner, ensuring that the requirements under the law are met while respecting the rights of the individuals involved. When people earn tips and do not report them, they are increasing the tax burden on their friends, family, and neighbours who have all of their income reported by their employers on their T4 slips. Even if you do not get a T4 slip to show your income from tips, you are still required to report all tips received in the course of your work and report the amount on line 104 of your return. In preparing to file your tax return, you may have to contact your employer to find out if any or all of your tips will be included on your T4 slip. It is your responsibility to keep track of all amounts received in the course of your employment. During a review or audit, CRA officers use the available records to confirm taxable income. If such records are not available, officers use other supporting information or documents available at the time of the review.

Did you know that you can claim, as a non-refundable tax credit, medical expenses for yourself, your spouse or common-law partner, and your children born in 1990 or later? The total expenses for 2007 have to be more than 3% of your net income, or $1,926, whichever is less. You may also be able to claim medical expenses for the following persons if they depend on you for support: you or your spouse or common-law partner's child or grandchild who was born in 1989 or earlier; and you or your spouse or common-law partner's parent or certain close relatives who lived in Canada at any time in the year.