Confirmed:  The CCR for Small Business is Tax Free

Ottawa has confirmed that the CCR for Small Business received by eligible Canadian-controlled private corporations (CCPCs) will be tax free for the 2019-20 to 2023-24 fuel charge years, as will the final payment for the 2024-2025 fuel charge year.  Draft legislation was released on June 30, 2025 with this announcement; and will be introduced for law making in Parliament this Fall.   Some of the more significant details are discussed below.

From a blog by Evelyn Jacks (www.evelynjacks.com)   The Global Competitiveness Report was released by the World Economic Forum last week, having reviewed the economic performance of 142 countries in the context of several difficult years. It recommends that countries around the world establish fundamentals for spurring "qualityî economic growth, in order to sustain competitiveness in economic, social and environmental terms. The report confirms that an injured world is indeed recovering from economic crisisóalbeit tentatively and with unequal distribution. That is, while the developing world is seeing strong growth, advanced economies are experiencing what it calls "sluggish recoveriesî, and "serious financial vulnerabilities with no clear horizon in sight for improvementî. Canada recently dropped off the "Top 10 Listî of global economic competitors to position #12. On the good news side, we benefit from highly efficient markets, particularly as it relates to labor, and well-functioning institutions and excellent infrastructure. We rank #6 for health and primary education and #12 for higher education and training. But our competitiveness would be enhanced with greater R & D spending so that we could achieve greater innovation and produce more goods ranked higher on the value chain. So what stops us from being innovative? Innovation and R & D requires significant investment by businesses, challenged to make profits in a volatile economic climate. They may need more help from lenders, and it is possible Canadian banks are in a good position to do so. In leafing through chart after chart of current data, it is good to see the soundness of Canadian banks is ranked #1 in the world. Yet, Canada ranks #19 in terms of venture capital availability, and #22 for ease of access to loans. And despite the fact that we consider ourselves to be quite tech-savvy, we rank #13 in the world in terms of individuals using the internet, behind Iceland (#1) and Korea (#10). Given the current global malaise, it appears we won't be able to export our way out of financial vulnerability anytime soon. Growth will need to come from our domestic market, which size ranks only #14 in the world. It's Your Money. Your Life. There is much work to do. Together, business and lenders have greater bench strength to spur on our domestic economy, so that incomes and taxes can maintain the lifestyles we cherish. Is more investment in our own business back yard required to enable us to innovate our way back into the top of the global competitiveness rankings? Your thoughts are most welcome. Evelyn Jacks, is President of The Knowledge Bureau, blogs at http://www.evelynjacks.com/.  For more information call toll free 1-866-953-4769 or visit http://www.knowledgebureau.com/.

The Canada Revenue Agency (CRA) announced the prescribed annual interest rates for the 4th quarter, which remain unchanged from all the previous quarters in 2011. Note that at a 1% prescribed rate, investors who wish to transfer capital to their spouses using a bona fide inter-spousal loan should consider making those plans now, to lock in those low rates for the life of the loan, particularly if they fear interest rates will rise in the future. The rates have held steady since the second quarter of 2009: 2009 2010 2011 Quarter 1 2 3 4 1 2 3 4 1 2 3 4 Overdue Taxes 6% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% CPP/EI  Premiums 3% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% Tax Overpayments 4% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% Tax Overpayments (Corporate) - - - - - - 1% 1% 1% 1% 1% 1% Taxable Benefits, Low or No Interest Loans 1% 1% 1% 1% 1% 1% 1% 1% 1%   1%   1% 1%   Additional Educational Resources:

Evelyn Jacks, Your Money, Your Life   To read the latest blog entry by Evelyn Jacks: To Recover Financially, Protect Financial Stability <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com🏢office" />   

Back to School Road Rage? With workers returning from summer holidays and students heading back to school, you may notice heavier traffic on the road this September. You'd think nerves would be more frayed, and yet, true to Canadian style, we continue to be happy campers about the commute, according to Stats Canada, which recently reported (say when) that in 2010 Canadian commuters were generally satisfied with their average commute time of 26 minutes. The study also found that there was a correlation between commuting time and stress. 36% of workers who traveled more than 45 minutes to work found that most days were quite or extremely stressful. Only 23% of workers who traveled less than 15 minutes to work found that most days were stressful. Therefore it's not surprising that 23% of public transit users were dissatisfied with their commute, compared with 18% of car commuters. Public transit users take longer on average to get to work, which an average 44 minute commute time. This study included all modes of transportation. 12% of commuters took public transit, while 6% walked or bicycled. Overall, only 15% of study participants were dissatisfied with the length of their commute time. Most of those dissatisfied with their commute live in one of the larger census metropolitan areas (CMAs) which have a population of more than 1 million. Not surprisingly, commuters in the CMAs of Toronto had the longest average commute time of 33 minutes, while those in Vancouver averaged 30 minutes, and 31 minutes in Montreal. Half of commuters in Toronto and Montreal traveled over 30 minutes to get to work, with one quarter traveling 45 minutes or more. The data for this study was gathered from the 2010 General Social Survey on time use, and is based on an article in Canadian Social Trends.   Additional Educational Resources:  

With the recent devastation of Hurrican Irene, many Canadians have been left to pick up the pieces. It is also difficult to forget the wildfires, tornados, and flooding that have impacted thousands the past summer.Canadians who have suffered hardship should be aware that under the taxpayer relief provisions CRA can extend leniency, as it recently reminded taxpayers in a news release. Specifically, when taxpayers are unable to file a return or make a payment on time due to circumstances beyond their control, such as a natural disaster, interest and/or penalties can be waived or cancelled. The court system can also help with fairness issues around the issue of filing deadlines. For example, following a 2010 case (Lacroix v The Queen, 2010 TCC 160), it was stated, to the corporate taxpayer's financial relief, that "unclaimed tax credits can be applied beyond the limitation period to reduce the net tax assessedî. For those who have already filed their returns in a timely manner, but did not take advantage of provisions available, claims may still be submitted. Additional Educational Resources: EverGreen, Make Sure It's Deductible - Fourth Edition

At a time when investment returns are low and markets volatile, CRA has been busy handing out stiff penalties for late filing, and invoking other weapons for collection, albeit not always successfully. Tax and financial planners can help preserve well-laid plans for savings, by reminding procrastinators to file sooner rather than later, in order to preserve capital.   There can be seriousóand expensive--consequences for failing to file your taxes on time. Late filers can face not only fines, but must pay the full amount of taxes owing, interest, and any civil penalties that may be assessed by the CRA. A Mission, BC drywaller, for example, was recently fined $5,000 for not filing returns. He was given one year to pay the fine, which resulted from not filing returns on personal income tax and GST from 2006-2008. But in another case, CRA lost, having used the GAAR (General Anti-Avoidance Rule) to deemed that a non-resident, Lehigh Cement Ltd., was wrongly withholding tax payable on interest income. Lehigh, however, won this round. While the company had used the rules in a novel way, the court concurred none-the-less they used them correctly, stating that by "the fact that an exemption may be claimed in an unforeseen or novel manner, as may have occurred in this case, does not necessarily mean that the claim is a misuse of the exemptionî. Taxpayers feeling guilty for not filing returns or reporting all of their income, should also be encouraged to voluntarily correct their tax affairs. A valid disclosure must be made before any compliance action by CRA against you. While penalties can be avoided, be aware taxes owing, plus interest, must be paid. (However, interest may be waived in hardship cases (see KBR article 'Tap Into Fairness Relief to Cancel Penalities').Additional Educational Resources: Essential Tax Facts, Tax Planning for the Corporate Owner Manager