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.

                                    EXPLORE RECOVERY FROM VOLATILITY At The Distinguished Advisor Conference November 13-16 in Palm Springs Early Registration Opportunity Ends September 30 Winnipeg, Manitoba. The times are unprecedented but the opportunities to differentiate and do important work are rife. Join thought leaders and a multi-disciplinary advisor audience from across the ranks in the Canadian financial services November 13 to 16 at theDistinguished Advisor Conference to discuss family wealth management at a pivotal time in history:   "In times of great change, advisors have the opportunity to do great work.î says Evelyn Jacks, President, The Knowledge Bureau, founder and host of this event. "In fact, the opportunity to share knowledge, experience, and expertise in thoughtful collaboration is both important and required to move forward. That's what this Distinguished Advisor Conference is about.î The inter-advisory forum will explore new ways to navigate families towards their best possible financial outcomes within changing landscapes: "In times of great change, advisors have the opportunity to do great work.î says Evelyn Jacks, President, The Knowledge Bureau, founder and host of this event. "In fact, the times are unprecedented, which is why the experience, expertise and thoughtful collaboration by industry leaders is required to move forward. That's what this Distinguished Advisor Conference is about.î The inter-advisory forum will explore new ways to navigate families towards their best possible financial outcomes within changing landscapes: Eighteen influential speakers will take the stage to help advisors plan strategically to embrace the advantages of these significant times, build their teams with new competences and grow their practices with preparedness. There is still time to enrol at Early registration fee discounts until September 30. The event takes place at the Miramonte Resort and Spa in Palm Springs; detailed information is available by phone at 1-866-953-4769 or online at www.knowledgebureau.com/dac. Contact Knowledge Bureau for group rates for registrations and flights. Over 150 advisors are expected to arrive in this popular Canadian retirement destination to tackle issues that require management in volatile times: from the global economy to consumerism, debt, portfolio construction, domestic and international tax and retirement planning and persistent challenges to a family's required investment returns. Contact: Evelyn Jacks, President, evelyn@knowledgebureau.com  Agenda, Application Form  

In advance of anticipated recessionary times, disaster management requires that governments review the sustainability of important social programs like the Employment Insurance (EI). But will labor markets contract because of economic volatility or demographics? The reasons could make a difference in rate structure. Statistics Canada, released a study on August 17 which estimates that the labour force is projected to grow to between 20.5 million and 22.5 million by 2031. At the end of 2010, it was 18 million. In the interim, however, a significant slowdown in the rate of growth in the labour force is predicted, however, primarily because of the retirement of baby boomers. Between now and 2016, it is expected to slow to less than 1%, and it will stop its decline after 2026, when baby boomers will have left the marketplace. By 2031, about one in three people in the labour force could be foreign born, which points to the role of Canada's immigration policies in replacing the boomer workforece. How these trends impact the setting of EI rates and benefits is the subject of a series of national consultations, announced by the federal government on August 18. Certainly one of the objectives is not to impede a fragile economic recovery by increasing rates at this time. Yet a plan needs to be put into place to deal with the EI operating deficit, which is not expected to a cumulative positive balance until 2015. The government is requesting your thoughts on these three questions by November 30: ∑ What is a reasonable amount of time in which the EI program should be expected to break-even? (i.e., 2 years, 5 years, 10 years, etc.) ∑ What is an acceptable maximum annual change in EI premiums? ∑ What should be the rate-setting process? Related Document:   Employment Insurance Premium Rate Setting   Additional Educational Resources:    

  Evelyn Jacks, Your Money, Your Life   To read the latest blog entry by Evelyn Jacks: Cash Flow Plan: September 15 Instalment Can Be Avoided  

Canadian taxpayers and investors may be feeling a bit jittery about market volatility but Jim Flaherty, Minister of Finance, says we are in good shape, all things considered. He told the House of Commons Standing Committee on Finance last week that Canada is well positioned to face global economic challenges posed by challenges in the US and Europe. However, the global recovery is fragile, he said, and both governments and individuals need to manage potential fiscal challenges accordingly. While the news coming from the US is not greatóthat the country is in the midst of its weakest recovery since the Great Depression according to Bank of Canada Governor Mark CarneyóCanadians can direct efforts to prepare for a prolonged recovery period. Fiscal sustainability is fundamental, he warned, both at government levels, but also by households, citing that Canadians are as indebted today as Americans and the British. Financial advisors, therefore can take the lead with their clients to discuss debt and cash flow management sooner, rather than later. The Finance Minister, for his part, plans to update the economic and fiscal outlook for Canada later this fall, but in the meantime is committed to return to budgetary balance a year early, by 2014ñ15, through its deficit reduction action plan.     Additional Educational Resources:  

The Westminster Principle, named after the 1935 House of Lords decision in The Duke of Westminster's Case, holds that a taxpayer can legally arrange their affairs to minimize tax payable, regardless of motive. This tenet of our tax jurisprudence is seemingly contradicted by Canada's General Anti-Avoidance Rules (GAAR) which were introduced in 1988. In 1984 the Supreme Court in Stubart refused the Government's argument that transactions must have a legitimate business purpose. Following this decision Parliament added section 245 of the Income Tax Act which now provides the CRA with an opportunity to reassess taxpayers who have complied with the letter of the law, but who they feel have "misused or abusedî the provisions; uncertainty is inescapable. Fortunately, Canada retains the structure of the British common law system that upholds the rule of law and the separation of powers between the three branches of government- legislative, executive, and judicial. The independence of the judiciary is therefore a cornerstone of our system, and recent judgments from the Tax Court of Canada and the Federal Court of Appeal re-affirm that autonomy. This is good news for taxpayers challenged by creative CRA claims that they have "misused or abusedî the provisions of the Act in order to produce a tax benefit. In Lehigh Cement Limited v. Canada, 2010 FCA 124, the CRA contended that Lehigh had contravened the spirit and intention of the Act in structuring its finances; the Federal Court of Appeal unanimously disagreed and provided some valuable information. At paragraph 37 the court stated: "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 exemption. It follows that the Crown cannot discharge the burden of establishing that a transaction results in the misuse of an exemption merely by asserting that the transaction was not foreseen or that it exploits a previously unnoticed legislative gap.îFurthermore, in Collins & Aikman Products v The Queen, 2009 TCC 299 the court cited the words of Paris J. in Landrus v. The Queen, 2008TCC274, where it was stated: "the Minister has tried to use the GAAR to fill in what he perceives to be a possible gap left by Parliament; that would be an inappropriate use of the GAAR.î These sort of judicial statements are reassuring for Canadian taxpayers and lawyers. The continuing independence of the judiciary has mitigated the seemingly limitless ambit of the GAAR and the CRA's ability to question the purpose of certain business transactions. The judiciary are bound by the legislation that Parliament enacts, but they undoubtedly strive to protect taxpayers from aggressive and asinine assertions from the CRA who attempt to claim that the GAAR is a set of ëcatch-all' provisions for any transactions that they feel provide a tax benefit unforeseen by Parliament. The GAAR creates uncertainty in the law, which is never a welcome attribute. The rule of law, the notion that all laws should be made prospectively and not retroactively, that they should be clear and available to all concerned, and that nobody should suffer a loss of liberty as a result of arbitrary governmental power, is the foundation of the Westminster Principle and our common law system. The GAAR sits uncomfortably with these long held principles and therefore the independence of the judiciary is more important than ever in Canadian tax law jurisprudence. The common law, meaning the binding and/ or persuasive judicial statements and interpretations of legislation and previous case law, will continue to be the only avenue of clarity for the nebulous General Anti-Avoidance Rules unless Parliament amends them. It will be interesting to see whether the Westminster Principle can stand its ground with the help of the judiciary or whether the GAAR will ultimately prevail; these recent comments offer a shimmer of hope for Canadian taxpayers. Greer Jacks is a research assistant with the Knowledge Bureau working out of Victoria, BC, and has been contributing to court case updates in EverGreen Explanatory Notes.   Additonal Educational Resources:   <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com🏢office" />

Evelyn Jacks, Your Money, Your Life   To read the latest blog entry by Evelyn Jacks: Following Investment Advice in Volatile Times