News

2025 Year End Newsletter

2025-12-15T19:15:31Z

Accounting

Tax Updates

Agriculture Updates

Please note that while this section is agriculture-specific, the general business topics in other sections contain important information that is also applicable to agriculture clients. Please ensure you consider the remainder of the newsletter.

Miscellaneous Updates

Human Resources Solutions

Wealth Management

Firm News

Please Note Our Holiday Shutdown

The offices of Ward & Uptigrove will be closed from 4:00 pm on Wednesday, December 24th and reopening in the New Year on Monday, January 5th.

Accounting Updates

Key Highlights from the 2025 Federal Budget

Immediate Expensing for Manufacturing and Processing Buildings

Currently, the cost of eligible buildings used in manufacturing or processing in Canada may be eligible to be deducted for income tax purposes at a rate of 10% per year on a declining balance basis. To be eligible for this 10% rate, at least 90% of the building’s floor space must be used to manufacture or process goods for sale or lease.

The budget proposes to provide temporary immediate expensing (a 100% deduction in the year of acquisition) for eligible buildings used in manufacturing or processing in Canada. This can include, the cost of eligible additions or alterations to these buildings.

This proposed measure would apply to eligible buildings that are acquired on or after November 4, 2025 and first used for manufacturing or processing before 2030. The 100% deduction rate is proposed to gradually decrease for any acquisitions during 2030 to 2033.

A few key reflection notes for our clients:

Eligible buildings may qualify for this proposed measure as well as the Ontario Made Manufacturing Investment Tax Credit (OMMITC) which could provide a refundable tax credit of 15% of the cost of the eligible building. Please refer to our 2025 summer newsletter for information on the OMMITC.
At times, from a primarily liability perspective, the real estate is held in a separate corporation from the active business. If this is the case, the proposed immediate expensing measures would not result in a significant tax benefit.

Extension of the Accelerated Investment Incentive (AII)

Budget 2025 confirmed that the 2024 Fall Economic Statement proposal to reinstate the AII, including accelerated first-year capital cost allowance for manufacturing or processing equipment, clean energy generation and energy conservation equipment and zero-emission vehicles, would proceed. Please refer to our 2024 year end newsletter for further details about the AII.

Deferral of the Bare Trust Reporting Rules

The budget defers the trust reporting rules applicable to bare trusts to taxation year ending on or after December 31, 2026. As such, no bare trust reporting will be applicable for the 2025 year. This is the third consecutive year that such bare trust reporting has been delayed and each year the Canada Revenue Agency provides further updates to clarify and narrow the reporting rules.

Elimination of the Underused Housing Tax (UHT)

The budget proposed to eliminate the UHT starting with the 2025 calendar year, this would indicate that no further filings would be required under this regime.

Cancellation of the Canadian Entrepreneurs’ Incentive (CEI)

The budget cancels the CEI that was announced in the 2024 budget. For further information on the CEI, please refer to our 2024 year end newsletter .

Key Highlights from the 2025 Ontario Fall Economic Update

HST Relief for First-Time Home Buyers on New Homes

In our 2025 summer newsletter , we provided details on the federal government’s introduction of a new GST rebate for first-time home buyers on new homes valued up to $1.5 million.

In the fall economic update, the Ontario government announced a similar rebate for the provincial portion of the HST on qualifying new homes for eligible first-time home buyers. The Ontario rules, including the reduction to the rebate for new homes valued between $1 million and $1.5 million, will be similar to the federal rebate rules.

For eligible first-time home buyers, the combined federal and Ontario proposed HST rebate changes imply that a qualifying new home, valued up to $1 million, can effectively be acquired with no HST.

The Ontario rebate is available where the purchase and sale agreement is entered into with the builder or if owner built, construction has started on or after May 27, 2025, and before 2031.

Ontario Corporations – Beneficial Ownership Registry to Commence in 2027

The fall economic update announced a Beneficial Ownership Registry for privately held corporations that is to commence in 2027. This will require certain Ontario corporations to file specific information on individuals with significant control through an online registry.

Canada Carbon Rebate for Small Businesses

Eligible small businesses in Ontario received a carbon tax rebate in late 2024 or early 2025 which represented a return of the federal carbon tax paid on fuel from 2019 to 2023.

The Department of Finance issued draft legislation in late 2025 to ensure that the Canada Carbon Rebate for Small Businesses would be tax-free. Prior to this, the CRA instructed taxpayers to report the Canada Carbon Rebate as taxable. Ward & Uptigrove treated the Canada Carbon Rebate as non-taxable during this time, Ward & Uptigrove clients do not need to amend prior tax returns to remove these rebates.

With the elimination of the federal carbon tax, in April of 2025, eligible businesses will receive one final rebate for the 2024-2025 year. These are expected to be received by the end of 2025. For businesses with Ontario employees, the rebate amount is $98 per employee.

To be eligible for this final rebate amount, your business must be a Canadian-controlled private corporation (CCPC), have filed their 2024 tax return by July 15, 2025, and employed between 1 and 499 employees.

For more information, please visit the CRA’s website here .

Clean Technology Investment Tax Credit (ITC)

The Clean Technology Investment Tax Credit is a refundable tax credit equal to 30% of the cost of eligible clean technology purchased and put into use between March 28, 2023 and December 31, 2033.

The following investments are a few of the investments that would qualify:

Solar panels or energy-generation systems for your building
Heat pumps (air-source or ground-source) to replace traditional HVAC systems
Battery storage systems that do not use fossil fuels
Eligible zero-emission equipment, such as electric forklifts or commercial EV chargers.
Active solar heating and other clean-energy powered heating systems

To qualify for this credit, your business must be a taxable Canadian company and purchase eligible clean technology property. All equipment must be new, used exclusively in Canada, and not be previously used or leased.

Because the credit is a refundable credit, you will benefit from the credit even if your corporation does not have a taxable income. Partnerships may also qualify if they have corporate partners which the credit is then allocated amongst.

If you have made an investment in clean technology or are considering doing so, please reach out to your client manager to discuss claiming this credit.

Tax Planning – Agriculture

Reviewing your operation’s estimated taxable income before your year-end can allow for time to consider certain tax planning options to help reduce your tax liability. If you expect your taxable income to be higher than in previous years, you should consider having a discussion with your accountant regarding potential planning options; this may include the following:

Prepaid expenses – If you have cash available, and you file on a cash basis, you could consider prepaying for a portion of the next fiscal years expenses before your year end. Common prepaid expenses include crop inputs or feed for livestock. This option will allow you to deduct these prepaids in the current year, but it also means that you no longer have these expenses in the next fiscal year.
Asset purchases – Consider purchasing a capital asset before the end of the fiscal year allowing an increased capital cost allowance (CCA) expense in the current year. Budget 2025 proposed enhancing first year CCA claims for assets purchased on or after January 1, 2025. This could mean an even higher CCA deduction in the current year. For a clear example, please refer to a previous newsletter that was posted click here.
Accounts payable – Consider paying any outstanding invoices before your fiscal year end. By paying these amounts you can deduct them for tax purposes if you file on a cash basis. If you file on an accrual basis, this does not increase your taxable expenses.
Holding inventory – You could consider delaying the sale of inventory (crops and livestock) until after your fiscal year end. On a cash basis, the income would not be taxed until the cash is received.

Farm Succession

Farmland values have more than doubled in the last ten years. Due to the increases in farmland value, accrued capital gains on properties have increased significantly. The accrued capital gains could result in a substantial tax liability on the sale of the farm property or death of the property owner.

The lifetime capital gains exemption and a tax deferral on the transfer of farmland to a child are two beneficial tax provisions that result in deferring or decreasing the tax liability for that property. However, these tax provision are not a guarantee to the owners of a farm property as specific rules must be met in order to use the provisions.

Capital gains on the sale or transfer of personally owned qualified farm property as defined in the Income Tax Act "ITA" can be sheltered from income tax using the lifetime capital gains exemption (LCGE). Currently, the LCGE is $1,250,000. This exemption can be used by multiple family members on one property, including spouses, children and even grandchildren if proper planning is completed.

Qualified farm property (QFP) as defined in the ITA is property that is used in the course of carrying on the business of farming in Canada. Farming can be carried out by various parties including, the taxpayer, their spouse, their children, or their parent. Further criteria also is required to be met depending on when the property was acquired (before or after June 18, 1987). However, the main condition of QFP is that the property is used in the business of farming by a qualified individual.

The ITA defines farming as the tillage of the soil, livestock raising or exhibiting, maintaining horses for racing, raising poultry, fur farming, dairy farming, fruit growing and keeping of bees. Although this list is not exhaustive, your accountant can help you work through where your business qualifies. Farming in a joint venture with another farmer can be considered farming depending on the circumstances. These arrangements should be appropriately analyzed and documented with your accountant to ensure the owner of the property is in fact farming as defined by the ITA and that the property is considered QFP.

Depending on the structure of your operations, a family farm partnership or family farm corporation could also qualify to use the LCGE if the partnership or shares of a family farm corporation are sold. The analysis of QFP criteria and the ability to use the LCGE can be complex and should be reviewed with your accountant proactively as part of any plan to transfer or sell your farmland.

Another beneficial provision that can be used in estate & succession planning is transferring farm property to a child using a tax deferral. The ITA allows qualifying property to be transferred to a taxpayer’s child(ren) or grandchild(ren) at a chosen amount between the property’s original tax cost and the property’s fair market value. This allows the capital gain and the associated income tax liability to be deferred until the child(ren) or grandchild(ren) sells that property. To qualify the property must have been used principally (more than 50%) in farming activities by a qualified individual who was actively engaged on a regular and continuous basis in the business. If the property was owned for 40 years, the property must have been used for at least 21 years in farming by a qualified individual.

The LCGE and tax deferred transfer to a child can be combined for qualifying properties to create powerful tax and succession planning opportunities. However, there are certain time, ownership and operating requirements that must be met requiring that planning be done well in advance of a sale or death.

Starting succession discussions early provides families with time to identify all parties’ objectives and time to align those objectives. From daily farm management to farm financial health and retirement financial security, open communication is essential to any succession plan. If you are starting to think about transferring your farm assets, reach out to your accountant to discuss any planning that can be completed in advance to create a successful plan.

Advance Payment Program

The Advance Payments Program (APP) is federal loan program that provides low-interest cash advances to producers. The program allows for access up to $1,000,000 in total advances based on the value of the eligible agricultural products you will produce or that you have in storage. For the 2025 program year, the first $250,000 borrowed is interest free with any additional advances borrowed at the prime interest rate. All producers can apply for this program through the Agricultural Credit Corporation (ACC) website.

The loan application and administration of the loan is simple and can provide producers with a significant benefit of no or low interest cash flow until their commodities are sold and cash is received.

For more information about the program visit https://agriculture.canada.ca/en/programs/advance-payments

AgriStability Program Updates for 2025

Temporary enhancements to the AgriStability program were announced for the 2025 program year:

Compensation Rate Increase:
The compensation rate has been raised from 80% to 90% for 2025.
If you are enrolled in 2025 coverage, you do not need to take any action—the new rate will automatically apply to all AgriStability payments for the 2025 program year.
Higher Payment Limit:
The maximum payment limit has doubled from $3 million to $6 million for 2025.
This change ensures that support levels better reflect the size of larger farming operations.

Deadlines - AgriStability & AgriInvest

AgriStability: Deadlines for the 2025 program year

December 31, 2025: Apply for interim payment
December 31, 2025: Pay fee – final deadline (20% increase)
April 30, 2026: Pay fee, submit New Participant Form or cancel coverage for 2026 AgriStability
June 15, 2026: Submit T1163 (individuals)
June 30, 2026: Submit Statement A (corporations, trusts and special individuals)
June 30, 2026: Submit Year-end report and Claim form
September 30, 2026: Final deadline – Report your 2025 farm income to Canada Revenue Agency (corporations)

AgriInvest: Deadlines for the 2025 program year

June 30, 2026 (initial deadline): For individual participation AgriInvest only, submit 2025 T1163 to Canada Revenue Agency.
June 30, 2026 (initial deadline): For corporations, trusts and special individuals’ participating in AgriInvest only, submit 2025 Statement A to Agricorp.
September 30, 2026 (final deadline): For forms sent after the initial deadline, the maximum matchable deposit will be reduced by 5% for each month (or part of a month) past the initial deadline up to the final deadline.

What Documentation is Required - Preparing for Tax Season

As tax season is fast approaching - annual receipts and statements will soon start to be distributed. As mentioned in our 2025 Summer Newsletter , CRA will randomly request documentation on common personal tax deductions. Below is a list of the most common post assessments Ward & Uptigrove saw this summer and what is the recommended documentation for each claim.

Child Care Deduction

Monthly or annual statements from corporate day care providers
Must include:
Child’s first and last name
Dates of childcare expenses, general comments such as “provided in 2025” or “month of January 2025” are acceptable
Amount paid for services
Must indicate a paid balance (show $0 owing, stamped paid or provide copies of cancelled cheques or transfers)
Name of child’s parent(s)
Name and address of provider
Individuals providing day care services must provide all of the above as well as:
Provider signature on receipt
Social insurance number of the provider
Individuals may be reluctant to provide their SIN, sending the receipt directly to Ward & Uptigrove through our ShareFile portal is always an option.

Medical Expenses

Receipts must include:
Patient name
Description of goods or services provided
Indicate that the amount has been paid (show $0 owing, stamped paid or provide copies of cancelled cheques or transfers)
Drug Identification number (DIN) if the amount is for prescription drugs
Name of medical practitioner who prescribed / performed services
Annual pharmacy statements are recommended as they contain all of the required information and do not require you to keep track of small prescription receipts throughout the year
Annual insurance statements are preferred as they normally include all of the required information
Medical travel must provide:
Letter from family doctor or nurse practitioner that the services obtained were not available within a 40KM radius of the patient’s home
Appointment dates, print-out of appointment dates from specialist office is normally the best to obtain
Description of the reason for the trip, which can be provided by the taxpayer themselves

Foreign Taxes Paid (Not from Canadian T-Slip)

Must have completed a foreign tax return and can provide the filed tax return and notice of assessment OR proof that a tax return was not required to be filed.
If a notice of assessment is not available yet, proof of payment or receipt of expected refund is allowable as long as they show details such as who the payment was made to and which tax year it relates to.

Spousal or Child Support Payments

A signed court order or written agreement
Monthly or annual receipt which includes:
Name of person making payment
Name, address, date of birth and SIN of person receiving the payment
Total amount paid, breakdown of what was child vs. spousal
Names of the children support was paid for (if applicable)
Dates payments were made
Signature of recipient confirming receipt of payments
Cancelled cheques can be provided if receipt is not able to be obtained. Note that e-transfers are generally not acceptable unless accompanied by a letter from the recipient confirming amounts received.

Property Tax or Rent Payments

Valid rent receipts include:
Amount of rent paid
Date rent was paid, general comments such as “rent paid in 2025” are acceptable
Name of individual who paid rent
Address of the property rented
Name of individual or business who received the rent
Landlord’s signature
Property taxes must be able to provide property tax statement from the municipality
The statement must be stamped paid or provide a receipt of payments from the municipality
If receipt of payment is not able to be obtained, you can provide cancelled cheques or bank statements showing the amounts paid to the municipality in its place.

Automatic Filings

CRA is expanding their automatic tax filing services project. This program is intended to help low-income individuals with simple returns by filing their taxes to ensure they maintain their benefits throughout the year. In past years CRA has used SimpleFile , which is available by invitation only. Historically Ward & Uptigrove has observed this invitation received by young adult children in post-secondary school who CRA expects to have minimal income activity.

CRA will start to use pre-filled tax returns through an individual’s MyAccount in 2026 in addition to SimpleFile to expand this program. Taxpayers should be mindful of all their sources of income when using these services as it is their responsibility to ensure all income is reported on their tax return. If you or a family member receives an invitation from CRA and you have more questions, please reach out to the client manager on your account.

CRA Administrative Items

Direct Deposit

As a reminder, CRA will no longer accept changes to direct deposit through e-filing a personal tax return. All changes must be done through MyAccount, a Canadian Bank or Credit Union, or a direct deposit enrollment form .

Electronic Mail

CRA is continually changing the method of communication for individuals. Individuals are now urged to register for a MyAccount and update their notification preferences. Taxpayers should regularly check their online correspondence in their MyAccount to ensure that they do not miss out on important information such as notices of assessments/reassessments, installment reminders, post assessment letters, or statement of accounts.

CRA has defaulted MyBusiness accounts to electronic mail. Only those who had a business number prior to May 2025 and, do not have a registered MyBusiness account or do not have an Authorized Representative who has access to their CRA account will continue to receive physical mail. You can request to continue to receive paper mail by filling out an RC681 form, which must be resubmitted every two years. Should you choose to continue to receive physical mail, it will be imperative to keep your mailing address up to date as CRA will automatically revert a business to online mail if undeliverable mail is returned to them. If not done so already, it’s recommended that business owners register for a MyBusiness account and update their notification preferences. Ensure to regularly check your online correspondence in your MyBusiness account to ensure you do not miss out on important information such as notices of assessments/reassessments, installment reminders, audits, or statement of accounts.

Missing CRA correspondence for both businesses and individuals could lead to significant consequences, such as interest, penalties, or large, unexpected tax assessments. There are strict time frames the CRA provides for you to be able to provide information or object to an assessment – if these time frames lapse then you may be unable to object to the assessment. Click here for more information on CRA’s changes.

Please reach out to our Administrative team for assistance with filing the RC681, registering for a MyAccount/MyBusiness account, or updating your notification preferences.

Please note that representatives, such as Ward & Uptigrove, do not have the ability to update or maintain their client’s email information or mail notification preferences with CRA and therefore it remains the responsibility of the individual/business to ensure they have their accounts set-up accordingly to continue to receive CRA’s communications.

CRA will never send unsolicited emails or text messages asking you to click a link, provide personal information, or confirm banking details. If you receive a message that seems suspicious, please do not open any links and contact CRA directly.

Authorization

CRA changed their authorization process for individuals this past summer. To authorize a representative, you will now need to either:

Authorize a representative through MyAccount
Provide a representative with a Notice of Assessment from a previous year’s tax return and sign a certification page which is submitted to the CRA to be processed. CRA may still contact you to verify the authorization request under this method.

Ward & Uptigrove uses this authorization to download information from CRA for your personal tax returns to ensure accuracy of information as well as to correspond with CRA on your behalf for various reasons.

A reminder that CRA has also changed the way that authorization can be given for business numbers. Now a business registrant can only provide authorization through their MyBusiness account. Please note that when you register for a MyBusiness account for the purpose of authorizing a Representative, CRA will automatically update the default method of communication to electronic mail as noted above.

Those with MyAccount or MyBusiness Account can review Authorized Representatives on file and revoke access at any time. If you notice that Ward & Uptigrove is not authorized on your account and you would like them to be, reach out to our Administrative team for next steps.

Common Corporate Tax CRA Communications

Similar to personal tax returns, CRA issues a number of communications to corporations or sole proprietors registered for HST or payroll throughout the year.

Corporate Pre/Post Assessments

These are letters from CRA requesting back up documentation regarding specific sections of the corporate tax returns either prior to the assessment of the return and issuing of refunds (pre-assessment) or after the returns have been assessed and refunds have been issued (post-assessment).

Pre-assessments often occur in relation to input tax credits that generate a significant deduction or refund. This includes, the Ontario Regional Opportunities Investment Tax Credit or the Ontario Made Manufacturing Investment Tax Credit.

Post-assessments are often random and may relate to a project that CRA is running. Common post-assessments seen every year relate to vehicle additions, vehicle expenses, professional fees, foreign tax credits, travel expenses, and donations.

Payroll Discrepancy Notice (PD4R)

These are notices issued from CRA when there is a difference between total remittances made during the calendar year and the total amounts reported on T4/T4A slips. You are required to respond to these notices in order for CRA to verify if you are entitled to a credit on the account or if you owe more funds.

HST Review

CRA’s HST reviews can be random, but they often are a result of a large refund filed or a large increase in HST input tax credits claimed. These letters will often require some information about the business, a listing of sales, HST collected and HST ITC’s, a copy of the 10 largest sales invoices and expense invoices, as well as details on capital asset additions or disposals.

HST Sales Discrepancy

These letters are a result of there being a discrepancy between the sales reported and the expected HST collected associated with that return. This could be due to zero-rated or exempt sales being reported on the wrong line, which would give CRA the impression that there might be missing HST collected when there isn’t.

Another reason for the discrepancy letters is there being a difference between the sales reported on your personal or corporate tax return as compared to the sales reported or HST collected on your HST returns.

These types of letters often ask for an explanation of the difference and provide the opportunity to the taxpayer to correct the return if needed.

HST Rebates

CRA provides new housing rebates to individuals building their own new house or to corporations who build new houses as part of their business. As these rebates are specialized and often complex, they are almost always reviewed or required to submit documentation as part of the process. What type of information is required to be submitted will depend on which type of rebate was filed for. This could range from building purchase documentation to individual construction expense receipts.

Most CRA letters have a 30-day response requirement. If no response is submitted or no extension is requested, they will assume the claim was invalid and reassess the return to deny the claim made.

Audit Shield

As CRA’s data analytics continually improve, they are starting to investigate not only variances but also inconsistencies between related accounts. Currently, CRA reviews can sometimes be anticipated, however; we may see an increase in the volume or types of reviews in the future. If you have a business with large variances between reporting periods, frequently purchase vehicles within your business, deal with new housing rebates often, or are part of a large group of related companies - considering signing up for Audit Shield.

Audit Shield provides a cost-effective protection against CRA audits, enquiries, investigations or reviews. One annual payment can cover Ward & Uptigrove’s fees up to a specified amount for responding to CRA audits for corporate tax filings, personal tax filings, GST/HST filings, employer compliance audits, and business audits. Please note that Audit Shield does not cover personal tax pre-assessments, please refer to our Summer Newsletter for more information on those types of communications.

Please reach out to the Client Manager on your account if you have any questions or to see if Audit Shield is a good fit for you.

Snowbirds Closer Connection Filings

If you travel to the US for more than 29 days at a time but less than 183 days, you may be required to file a closer connection return (Form 8840) . This is an information only return which allows an individual who meets the United States substantial presence test, to still be treated as a nonresident for US tax purposes. This return must be filed annually by June 15 ^th . As the US increases their use of technology at the border, it may become easier for them to identify non-compliant individuals. Not filing this return could result in US tax being imposed and penalties being assessed. Please notify your Client Manager if this applies to you.

Reporting Changes for Employees Regarding T4/T4A

During the 2023 tax year, CRA requested that issuers (including employers and pension plan administrators) of T4 or T4A's needed to report on the slip whether on December 31st of that taxation year an employee or any of their family members were eligible to access dental insurance, or dental coverage of any kind including health spending and wellness accounts due to their current or former employment. If this was not reported in 2023 the CRA defaulted the reporting to code 1 which was "no access to any benefits".

This should have been reported on the following boxes:

Box 45 on all T4 slips
Box 015 on all T4A slips

For the current year and going forward, those boxes noted above on the T4 or T4A are MANDATORY. As such if those boxes have nothing in it when the slips are submitted, the CRA has indicated that they will reject the T4 and T4A submission requiring corrections which may result in penalties.

When filling out the T4 or T4A, employers must select one of the following 5 codes to report the situation that applies to their employees:

Code 1 - No Access to any dental care insurance, or coverage of dental services of any kind
Code 2 - Access to any dental care insurance or coverage of dental services of any kind for on the employee
Code 3 - Access to any dental care insurance or coverage of dental services of any kind for employee, spouse and dependents
Code 4 - Access to any dental care insurance or coverage of dental services of any kind for only the employee and their spouse
Code 5 - Access to any dental care insurance or coverage of dental services of any kind for only the employee and dependents

Note - If the employee has access to dental care insurance or coverage and has chosen to decline it for any reason the employer CAN NOT report Code 1.

Veterinary Advisory Group Updates

Congratulations to Rita Cole on her progression to a Partner position within the firm! We’re excited to celebrate Rita’s advancement and the continued growth of our team.

Webinars for Veterinarians

This past year, Ward & Uptigrove hosted two webinars for veterinary professionals:

Accounting and Tax Overview for Veterinary Practices
Best Practices for Selling your Veterinary Practice.

If you missed either session, the recordings are available on our website here .

We welcome your input - if you have any suggestions for future webinar topics, please email us at VetGroup@w-u.on.ca .

New Accounting Chart of Accounts

Earlier this year, an updated chart of accounts for veterinary practices was introduced to help improve consistency, data quality, and industry-wide reporting. If you would like to discuss the benefits of transitioning to these chart of accounts or need assistance with your accounting software, please reach out to us at VetGroup@w-u.on.ca .

Sharing of Financial Data with the OVMA

You have the option for Ward & Uptigrove to share directly with the OVMA your clinic’s financial statements and chart of accounts, which will help strengthen the reliability of the OVMA’s financial reporting and annual Economic Survey. If you haven’t provided consent and would like to participate, please email us at VetGroup@w-u.on.ca and we’ll send you a consent form.

Upcoming Events

The Veterinary Advisory Group will be attending the following industry events:

OVMA Conference and Trade Show - January 29-31 in Toronto.
OVC Industry Day, Ontario Veterinary College – March 17 in Guelph.

HR Updates

How the 2026-2028 Immigration Levels Plan Impacts Small Business Employers

As 2025 wraps up, Immigration, Refugees and Citizenship Canada (IRCC) has released its 2026–2028 Immigration Levels Plan. Below is an overview of the Plan’s key focus and what it means for small business employers.

Focus Areas

Fewer temporary workers: Canada will significantly reduce new temporary resident admissions. The number of new temporary worker arrivals will decrease from 367,750 in 2025 to 230,000 in 2026.
Steady permanent resident targets: Economic-class immigration, especially through Provincial Nominee Programs, will remain steady.
More temporary workers transitioning to permanent residency: 33,000 temporary workers will be accelerated into permanent residency pathways in 2026 and 2027.

What This Means for Your Business

Tighter access to short-term labour : Sectors that rely on seasonal or short-term foreign workers may face hiring challenges as temporary worker numbers decline.
Greater need to plan ahead : LMIAs, recruitment, and onboarding may require longer lead times. Employers will need to plan their workforce further in advance.
Stronger opportunities for talent retention : With a greater emphasis on permanent pathways, employers can support key workers in settling permanently, reducing turnover and training costs.

How Employers Can Prepare

Review your workforce to identify roles dependent on temporary foreign workers.
Explore temporary resident to permanent resident pathways to retain strong employees on a long-term basis.
Extend hiring timelines to reflect reduced temporary foreign worker availability.
Seek professional guidance to optimize immigration strategies and compliance.

The Living Wage and Small Businesses

United Way Perth-Huron and the Ontario Living Wage Network recently announced that the new living wage benchmark is $24.60 per hour, up from $23.05 in 2024.

The new Living Wage for Huron and Perth Counties creates more challenges for small businesses compared to other regions in Southwestern Ontario. The Living Wage is calculated using real costs of living in rural communities, including shelter, transportation, childcare, and food. Transportation and housing costs have impacted rural Huron and Perth’s Living Wage.

Why Implement the Living Wage?

Paying a Living Wage ensures workers can afford necessities and participate in the community. Our small business clients who are interested in social responsibility and a strong local reputation might elect to become a Living Wage employer. The Living Wage may benefit recruitment and retention efforts to compete for labour.

More information on how to become a living wage employer can be found at this link: Become a Certified Living Wage Employer - Ontario Living Wage Network

How Does the Living Wage Impact Small Businesses?

The Huron and Perth Living Wage is $7.00 higher than Ontario’s current minimum wage of $17.60 per hour. Implementing the Living Wage comes with a significant payroll cost for small businesses.

The government does not currently provide tax incentives or subsidies to encourage businesses to implement the Living Wage. Our small business clients are challenged to strike a balance between fair pay practices and business viability. Businesses where margins are thin will have to raise prices, which can be challenging for customers who are cost sensitive.

Ontario Living Wage Rates (2025)

New Job Posting Rules for 2026

Beginning January 1, 2026, several changes come into effect related to publicly advertised job postings under new regulation O.Reg. 476/24 of Ontario’s Employment Standards Act, 2000 . These changes will apply to employers who have 25 or more employees on the day the job ad is posted.

Job Posting Rules

1) Compensation: must include expected compensation or compensation range for the position

a. The posted range cannot exceed $50,000 per year

b. This rule does not apply if expected compensation or range is more than $200,000 per year

2) Use of Artificial Intelligence (AI): must disclose if the employer uses AI to screen, assess or select applicants

3) Vacancy Status : must disclose if posting is for an existing vacancy or not

4) Canadian Experience: job posting or application form cannot require Canadian work experience

5) Interviewed Applicants: employers must notify all interviewed applicants within 45 days of the interview date about whether a hiring decision has been made

6) Record Retention: employers must keep copies of job postings, applications and candidate communication records, including interview feedback and notifications, for three years

Next Steps:

Review your hiring practices to ensure your business is compliant:

Train your hiring personnel
Check job postings for compliance
Implement good recording keeping procedures

If you’re concerned about how these changes will apply to your small business, consider consulting with your HR professional for advice.

Emerging Leaders Development Program

The Emerging Leaders Development Program gives you the tools to confidently and competently lead your teams and avoid common leadership mistakes. Join us as we explore the skills required to be a great leader, manager, supervisor or team lead in an interactive program designed to set you up for success.

The next session of the Emerging Leaders Development Program is scheduled for March 3-17, 2026.

This session will cover:

Role of the Leader & Personal Effectiveness
Communication for Leaders
Motivation & Engagement
Time Management
HR/HS 101 (Optional)

Visit the training page on our website for more information or to register.

Wealth Management Updates

Estate Planning Refresh: A Valuable Year-End Habit

As the year wraps up, many families take time to get organized and review important personal and financial matters. One area that benefits greatly from an annual check-in is estate planning. Even a well-prepared Will or Power of Attorney can become out of date as life circumstances, assets, and family priorities evolve.

1. Review Your Will and Powers of Attorney

Ensure your Will still reflects your intentions and that the individuals you’ve appointed—executors, guardians, and attorneys—remain the right choices. Major purchases, changes in relationships, or new family circumstances may mean an update is needed.

2. Verify Beneficiaries and Account Ownership

Beneficiary designations on RRSPs, RRIFs, TFSAs, pensions, and life insurance take precedence over your Will.
Confirm that:

Beneficiaries are current
Joint ownership on accounts is still appropriate
Any corporate or trust-owned assets continue to align with your estate intentions

3. Keep Documents Organized and Accessible

A well-organized estate is one of the most meaningful gifts you can provide your family.
This includes ensuring your:

Asset summaries
Insurance details
Digital account information
Key contacts and instructions

As a reminder, Ward & Uptigrove offers a free service to electronically store important documents online, EstateKeeper. If you are interested in learning more about this simple, structured way to store and organize this information please reach out to your accountant or advisor.

4. Discuss Your Plans With Family

While not always easy, open conversations with spouses, adult children, executors, or attorneys can prevent confusion later. Even a brief discussion over the holidays can provide clarity and peace of mind for everyone involved.

Cybersecurity & Fraud Prevention During the Holiday Season

The holiday season is a time of connection and celebration—but unfortunately, it’s also one of the busiest periods of the year for online fraud and financial scams. With more people shopping online, traveling, and using digital communication, criminals take advantage of the increased activity and distractions.

Below are a few timely reminders to help you stay safe this season.

1. Be Cautious With Unfamiliar Emails and Texts

Phishing attempts increase sharply at this time of year. Watch for:

Emails or texts claiming to be from delivery companies
Messages about “account problems” that urge you to click a link
Fake charity solicitations
Emails that appear to be from banks or government agencies

If something feels off, don’t click any links. Contact the organization directly through their official website or phone number.

2. Protect Your Online Shopping

When shopping online during the holidays:

Only use trusted websites
Look for “https” in the URL
Avoid making purchases over public Wi-Fi
Use secure payment options like credit cards or digital wallets, which offer better fraud protection

Small precautions can prevent large problems.

3. Strengthen Your Passwords

Weak or reused passwords remain one of the biggest cybersecurity risks.
We recommend:

Using unique passwords for financial and email accounts
Enabling two-factor authentication (2FA) wherever possible
Considering a reputable password manager to help keep everything secure

This is one of the easiest ways to improve your digital security

4. Be Skeptical of Unexpected Phone Calls

Scammers continue to impersonate:

Banks and financial institutions
Government agencies
Technology support companies
Delivery services

They may claim there is a problem with your account, ask for verification codes, or request personal information.

As a rule: Never share PINs, passwords, or verification codes over the phone. If you’re unsure, hang up and call the organization directly using an official number.

5. Stay Alert When Traveling

If you’re traveling this season:

Avoid accessing financial information on public Wi-Fi
Keep devices locked when not in use
Watch for “shoulder surfing” at airports or terminals
Be cautious with QR codes at unfamiliar locations

Travel-related scams spike this time of year, especially around last-minute deals and booking confirmations.

6. How We Communicate With You

To help you distinguish legitimate communication from potential fraud, remember:

We will never ask for passwords or verification codes.
We do not send urgent or threatening messages requesting immediate action.
Any electronic document requests from our office will come from known staff email addresses or through our secure platform.

If you ever receive a message that seems unusual, please contact us before responding.

A Little Vigilance Goes a Long Way

Cybersecurity doesn’t need to be complicated. Most scams rely on urgency, emotion, or distraction, so taking a moment to pause and verify can make all the difference.

By the Numbers

Firm News

Staff Updates

As 2025 comes to a close, we reflect on our 67th year of growth and progression with our staff. We are proud to congratulate the following staff members on their development and progression into new roles.

Partner Announcement

Congratulations to Rita Cole and Garrett Topic on their progressions to Partner positions within the firm, taking the next steps in their leadership journeys. We look forward to seeing them continue to develop and progress within the firm, and we thank both Rita and Garrett for their ongoing contributions.

Agriculture Department

Progressions

Business Department

Progressions

Admin/Operations

Progressions

Years of Service

Congratulations to the following staff members on reaching these career milestones. We thank you for your contributions and loyalty to the firm:

5 Years of Service

10 Years of Service

15 Years of Service

25 Years of Service

Welcome!

We are thrilled to welcome the following new staff members to our team since July:

Happy Holidays

from the Partners and Staff of Ward & Uptigrove

2025 Fall Federal Budget Commentary

2025-11-05T15:43:09Z

On November 4, 2025, the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, presented Budget 2025 – Canada Strong, to the House of Commons.

No changes were proposed to personal or corporate tax rates. Some highlights include the following:

Some highlights include:

A. Personal Measures

Automatic tax filings for low-income Canadians to commence for the 2025 tax year.
A 5% credit for eligible personal support workers working for eligible health care establishments.

B. Business Measures

A variety of new and extended measures for accelerated CCA on asset acquisitions.
An anti-avoidance measure to prevent tax deferrals related to refundable dividend tax where dividends are paid within a corporate group.
Various modifications to tax incentives related to the clean economy.

C. International Measures

Revisions to the transfer pricing rules and requirements.

D. Sales and Excise Measures

Elimination of the underused housing tax.
Removal of the luxury tax on vessels and aircraft (but not on vehicles).

E. Other Measures

Deferral of bare trust filing requirements until the 2026 tax year.
Deferral of expanded filing requirements for non-profit organizations until the 2027 tax year

F. Previously Announced Measures

Intention to proceed with previously announced measures, including the capital gains rollover on small business investments, making the Canada carbon rebate for small businesses tax-free, allowing charitable donations made in early 2025 to be claimed in 2024 and increasing the lifetime capital gains exemption limit to $1,250,000 effective in 2024.
Confirming the cancellation of the proposed increase to the capital gains inclusion rate and the Canadian entrepreneurs’ incentive.

A. Personal Measures

Automatic Federal Benefits for Lower-Income Individuals

Budget 2025 proposed to provide CRA with the discretionary authority to file a tax return on behalf of an individual who meets all of the following criteria:

the individual would have no taxes on a federal tax return after considering only the basic personal amount, plus any age and disability credits they are entitled to;
all income of the individual for the taxation year is from sources for which specified information returns have been filed with CRA;
the individual has not filed a tax return for at least one of the three immediately preceding taxation years; and
the individual has otherwise not filed a return for the taxation year prior to, or within 90 days following, the tax filing deadline for the year.

CRA may also implement any other criteria as appropriate.

Prior to filing a return, the individual would be provided with the tax information reflected by CRA for their review. The individual would have 90 days to confirm or update it. If they take no action, CRA could file the return, issue a notice of assessment, and determine any credit or benefit entitlements.

In some cases, CRA may need the individual to confirm basic details, such as marital status, before issuing benefits. Some benefits also require a return from the spouse or common-law partner, which CRA could also file if the eligibility criteria are met.

The existing assessment, objection, and appeal processes would apply to assessments issued under these provisions. If it is determined after a tax return has been filed by CRA that the taxpayer did not meet the requirements for automatic tax filing, the tax return would be deemed not to have been filed.

Individuals would be able to opt out of automatic tax filing.

This measure would apply to the 2025 and subsequent taxation years. That is, filing could begin in 2026.

Interested parties can send comments to autotaxfiling-autoimpot@fin.gc.ca by January 30, 2026.

Temporary Personal Support Workers Tax Credit

Budget 2025 proposed to provide eligible personal support workers working for eligible health care establishments with a refundable tax credit of 5% of eligible earnings (providing a credit of up to $1,100). Amounts earned in British Columbia, Newfoundland and Labrador and the Northwest Territories would not be eligible, as federal funding is already provided to increase personal support workers’ wages in these jurisdictions.

To qualify, the person must ordinarily provide one-on-one care and essential support to optimise and maintain another individual’s health, well-being, safety, autonomy and comfort, consistent with that individual’s health care needs as directed by a regulated health care professional or a provincial community health organization. The person’s main employment duties must include helping patients with activities of daily living and mobilization.

The person must work for an eligible health care establishment, which would be hospitals, nursing care facilities, residential care facilities, community care facilities for the elderly, home health care establishments and other similar regulated health care establishments.

Eligible earnings would include all taxable employment income, including wages and salaries, and employment benefits (as well as similar tax-exempt income and benefits earned on a reserve) that is earned as an eligible personal support worker performing employment duties for eligible health care establishments.

Employers would need to certify their employees’ eligible earnings in prescribed form and manner.

Individuals would need to file a tax return to be eligible. This measure would apply to the 2026 to 2030 taxation years.

Top-Up Tax Credit

The lowest marginal personal tax rate is being reduced to 14.5% for the 2025 taxation year, and to 14% for the 2026 and subsequent taxation years. This rate is also applied to most non-refundable tax credits. In very rare cases where an individual’s non-refundable tax credit amounts exceed the first income tax bracket threshold ($57,375 in 2025), the decrease in the value of these credits may exceed their tax savings from the rate reduction.

Budget 2025 proposed to introduce a new non-refundable top-up tax credit, which would effectively maintain the current 15% rate for non-refundable tax credits claimed on amounts in excess of the first income tax bracket threshold.

The top-up tax credit would apply for the 2025 to 2030 taxation years.

Qualified Investments for Registered Plans - Small Businesses

Budget 2025 proposed to simplify and streamline the rules relating to registered plan investments in small businesses, while maintaining the ability of registered plans to make such investments.

In particular, RDSPs would be permitted to acquire shares of specified small business corporations, venture capital corporations and specified cooperative corporations (as is currently allowed for RRSPs, RRIFs, TFSAs, RESPs and FHSAs). In addition, shares of eligible corporations and interests in small business investment limited partnerships and small business investment trusts would no longer be qualified investments (for RRSPs, RRIFs, RESPs and DPSPs).

These amendments would apply as of January 1, 2027. Interests in small business investment limited partnerships and small business investment trusts that are acquired before 2027 under the current rules would continue to be qualified investments. The government noted that it is intended that shares of eligible corporations would continue to be qualified investments under the rules relating to specified small business corporations.

Budget 2025 also proposed to make a number of other technical legislative amendments to simplify the qualified investment rules. Notably, the qualified investment rules for six types of registered plans (i.e. all plans except DPSPs) would be consolidated into one definition in the Income Tax Act.

Home Accessibility Tax Credit Modification

Budget 2025 proposed to prohibit an expense claimed under the medical expense tax credit from also being claimed under the home accessibility tax credit. Under existing law, if the eligibility criteria for both credits are met, taxpayers can claim both credits in respect of the same expense.

This measure would apply to the 2026 and subsequent taxation years.

Canada Carbon Rebate Payments to Individuals - Program Wind-up

With the removal of the federal consumer carbon tax as of April 1, 2025, the government provided a final quarterly payment starting in April 2025 to eligible households. To support the winding down of mechanisms to return fuel charge proceeds, Budget 2025 proposed to provide that no payments would be made in respect of tax returns, or adjustment requests, filed after October 30, 2026.

Canada Disability Benefit - One-time Supplemental Payment

Budget 2025 proposed to provide a one-time supplemental Canada disability benefit payment of $150 in respect of each disability tax credit certification, or re-certification, giving rise to a Canada disability benefit entitlement, retroactive to the launch of the Canada disability benefit. Following the successful completion of the regulatory process, the first supplemental payments are expected to be made to recipients before the end of 2026-27.

B. Business Measures

Accelerated Capital Cost Allowance (CCA)

The CCA system determines the deductions that a business may claim each year for income tax purposes in respect of the capital cost of its depreciable property. Depreciable property is divided into CCA classes with each having its own rate, generally aligning with the expected useful life of the assets.

Budget 2025 referred to a series of proposals to allow accelerated CCA, many announced previously, as the “productivity super-deduction.”

Accelerated Investment Incentive (AII) Extended

Budget 2025 confirmed that the 2024 Fall Economic Statement proposal to reinstate the AII, including accelerated first-year CCA for manufacturing or processing equipment, clean energy generation and energy conservation equipment and zero-emission vehicles, would proceed. All of these incentives began to be phased out in 2024. The reinstatement of the incentives would begin for assets acquired on or after January 1, 2025. The current and proposed rates are summarized as follows:

manufacturing or processing machinery and equipment (class 53 until 2025, class 43 thereafter), clean energy generation and energy conservation equipment (class 43.1 and class 43.2 for property acquired before 2025) and zero-emission vehicles (classes 54, 55, and 56)
Normal CCA refers to the typical first-year CCA claim when no incentive was available, including application of the half-year rule. For example, normal CCA for a class 8 asset is 20% subject to the half-year rule. So, normal first-year CCA is 10%, with the current 2025 rate being 20% (2*10%) and the proposed rate being 30% (3*10%).

In summary, the proposal would restore the enhanced first-year CCA claims that had started to phase out for assets acquired in 2024, ensuring that the full incentives would apply to assets acquired in the calendar years 2025 to 2029. The existing scheduled phaseout from 2024 to 2027 would instead occur from 2030 to 2034.

Immediate Expensing for Manufacturing and Processing Buildings

Eligible buildings in Canada used to manufacture or process goods for sale or lease (manufacturing or processing buildings) have a CCA rate of 10% provided that at least 90% of the building’s floor space is used in manufacturing or processing.

Budget 2025 proposed to provide immediate 100% CCA expensing of the cost of eligible manufacturing or processing buildings, including eligible additions or alterations made to such buildings, provided the minimum 90% floor space requirement is met.

Property that has been used, or acquired for use, for any purpose before it is acquired by the taxpayer would be eligible for immediate expensing only if neither the taxpayer nor a non-arm’s-length person previously owned the property and the property was not transferred to the taxpayer on a tax-deferred “rollover” basis.

In cases where a taxpayer benefits from immediate expensing of a manufacturing or processing building, and the use of the building is subsequently changed, recapture rules may apply.

This measure would be effective for eligible property that is acquired on or after November 4, 2025 and is first used for manufacturing or processing before 2030. An enhanced first-year CCA rate of 75% would be provided for eligible property that is first used for manufacturing or processing in 2030 or 2031, and a rate of 55% would be provided for eligible property that is first used for manufacturing or processing in 2032 or 2033. The enhanced rate would be phased out entirely for property that is first used for manufacturing or processing after 2033.

Reinstatement of Accelerated CCA for Low-Carbon Liquefied Natural Gas Facilities

An accelerated CCA measure for liquefied natural gas (LNG) equipment and related buildings expired at the end of 2024. The measures increased the CCA rate for liquefaction equipment from 8% to 30% and for non-residential buildings used in LNG facilities from 6% to 10%. Budget 2025 proposed reinstating accelerated CCAs for LNG equipment and related buildings, but only for low-carbon LNG facilities.

Details regarding the new emissions performance requirements for these additional allowances will be provided at a later date. These measures would apply to property acquired on or after November 4, 2025 and before 2035.

Productivity-Enhancing Assets

Budget 2025 confirmed that a Budget 2024 proposal to provide immediate 100% CCA expensing of the cost of property acquired on or after April 16, 2024 that becomes available for use before January 1, 2027 will proceed. Assets in the following three classes would be eligible:

class 44 (patents or the rights to use patented information for a limited or unlimited period);
class 46 (data network infrastructure equipment and related systems software); and
class 50 (general-purpose electronic data-processing equipment, such as computers and systems software).

This immediate expensing would only be available for the year in which the property becomes available for use. The claim would be prorated when the taxation year is less than 12 months.

Dividend Refund – Tiered Corporate Structures

The Income Tax Act includes rules that seek to prevent the use of Canadian-controlled private corporations (CCPC) to defer personal income tax on investment income. Investment income earned by a CCPC is subject to an additional refundable tax that increases the corporation’s tax rate to approximate the highest marginal combined federal-provincial personal income tax rate. A corporation is entitled to a refund of a portion of this additional tax when it pays a taxable dividend, referred to as a dividend refund.

A corporation is generally not subject to income tax on a taxable dividend received from a connected corporation (generally, a corporation that owns shares carrying more than 10% of the votes and value of the payer corporation), except to the extent that the corporation paying the dividend (Payerco) received a dividend refund. In those cases, the corporate shareholder (Receiveco) is subject to a tax equal to the dividend refund received by Payerco, multiplied by Receiveco’s portion of the total dividends paid by Payerco. For example, if Payerco paid a $100,000 dividend and received a $10,000 dividend tax refund, and Receiveco’s dividend received from Payerco was $20,000, Receiveco would pay $2,000 of tax on the dividend. This tax would also be refundable when Receiveco pays dividends.

The government is concerned that tax planning techniques have been employed to take advantage of a timing difference where Payerco and Receiveco have different year-ends. For example, Payerco might pay a taxable dividend on October 25, 2025 and receive a dividend refund for its tax year ended on October 31, 2025. If Receiveco’s year-end is August 31, it would not be subject to the tax on its dividend received until its August 31, 2026 year-end, resulting in a 10-month deferral of tax.

Budget 2025 proposed to limit the deferral of tax in corporate structures with mismatched year-ends. In general terms, the proposed limitation would suspend Payerco’s dividend refund on the payment of a taxable dividend to Receiveco where two conditions are met. First, the suspension would apply only if Receiveco and Payerco are affiliated corporations. Second, the suspension would apply only if a tax deferral such as the one described in the example above will otherwise be achieved. Specifically, the suspension would apply if Receiveco’s taxes payable for the year in which it received the dividend are due later than Payerco’s taxes are due for the year in which it paid the dividend. Payerco would generally be entitled to claim the suspended dividend refund in a subsequent taxation year when Receiveco pays a taxable dividend to a non-affiliated corporation or an individual shareholder.

If Payerco’s dividend refund is suspended in this manner, Receiveco would not be required to pay the tax described above in respect of the dividend.

The dividend refund would not be suspended in Payerco if each Receiveco in the chain of affiliated corporations pays a subsequent dividend on or before the date on which Payerco’s taxes are due, as no deferral would result for the affiliated corporate group. The rule would also not apply to a Payerco that is subject to an acquisition of control within 30 days after the dividend payment.

This measure would apply to taxation years that begin on or after November 4, 2025.

The proposed new rules are complex. A detailed review of the structure of corporate groups will be required to determine situations where dividend refunds will be delayed, and to assess any changes in historical dividend strategies to minimize the impact of this proposal. As the details of the proposal may change during the legislative process, it will be preferable to delay this review until dividend planning is being done for fiscal years that will be affected by these proposals.

Scientific Research and Experimental Development (SR&ED)

Under the SR&ED tax incentive program, qualifying expenditures are fully deductible in the year they are incurred. Additionally, these expenditures are generally eligible for an investment tax credit.

The tax credit is provided at two rates. A fully refundable tax credit at an enhanced rate of 35% is available for Canadian-controlled private corporations (CCPCs) on up to $3 million of qualified SR&ED expenditures annually. The $3 million expenditure limit is gradually phased out where a CCPC’s taxable capital employed in Canada for the previous taxation year is between $10 million and $50 million. This limit is shared within an associated group of corporations.

A non-refundable tax credit at the general rate of 15% is available for corporations other than CCPCs and for qualified SR&ED expenditures of CCPCs that do not qualify for the enhanced credit.

The 2024 Fall Economic Statement proposed the following additional changes to the SR&ED program:

increase the expenditure limit from $3 million to $4.5 million;
increase the lower and upper prior-year taxable capital phase-out boundaries to $15 million and $75 million, respectively;
restore the eligibility of SR&ED capital expenditures for both the deduction against income and investment tax credit components of the SR&ED program; and
extend the enhanced tax credit to eligible Canadian public corporations.

Budget 2025 confirmed that these proposed measures would proceed.

In addition, Budget 2025 proposed to further increase the expenditure limit on which the SR&ED program’s enhanced 35% tax credit can be earned, from the previously announced $4.5 million to $6 million.

These measures would apply for taxation years that begin on or after December 16, 2024 (i.e. the date of the 2024 Fall Economic Statement).

Worker Misclassification – Employee vs Independent Contractor

The government is concerned that the deliberate misclassification of employees as independent contractors means that employers are not withholding and remitting the proper amounts of income tax, CPP and EI contributions. Misclassified employees may lose out on labour law protections, as well as benefits and pensions available to employees.

Trucking Sector

The government noted that this misclassification of employees has been particularly common in the trucking industry.

Budget 2025 proposed to provide $77 million over 4 years starting in 2026-27, with ongoing funding of $19.2 million annually, for CRA to implement a program that addresses non-compliance related to personal services businesses, as well as to lift the moratorium on reporting fees for services in the trucking industry.

Information Sharing

Budget 2025 also proposed to amend the Income Tax Act and the Excise Tax Act to allow CRA to share information with the Department of Employment and Social Development Canada for the purpose of addressing worker misclassification.

This measure would come into force on royal assent of the enacting legislation.

Agricultural Cooperatives: Patronage Dividends Paid in Shares

Prior to 2005, patronage dividends paid in shares by an agricultural cooperative to its members were taxable to the members in the year the shares were received. The cooperative paying the dividend was also required to withhold an amount from the dividend and remit it to CRA on account of the recipient’s tax liability.

A temporary deferral of income taxes and withholding obligations on patronage dividends received from agricultural cooperatives by their members in the form of eligible shares until the disposition (including a deemed disposition) of the shares has been in place since 2005, and was set to expire at the end of 2025. Budget 2025 proposed to extend this measure to apply in respect of eligible shares issued before the end of 2030, a five-year extension.

Clean Economy Tax Incentives

Budget 2025 announced a number of amendments and enhancements to tax incentives related to the clean economy.

Critical Mineral Exploration Tax Credit (CMETC)

Budget 2025 proposed to expand the eligibility of the 30% CMETC to include the following additional critical minerals: bismuth, cesium, chromium, fluorspar, germanium, indium, manganese, molybdenum, niobium, tantalum, tin and tungsten. This credit is available in respect of Canadian exploration expenses (CEE), including Canadian renewable and conservation expenses (CRCE) and Canadian development expenses (CDE) flowed out to individuals who invest in flow-through shares.

The following critical minerals are currently eligible for the CMETC: nickel, cobalt, graphite, copper, rare earth elements, vanadium, tellurium, gallium, scandium, titanium, magnesium, zinc, platinum group metals, uranium and lithium (including lithium from brines).

This measure would apply to expenditures renounced under eligible flow-through share agreements entered into after November 4, 2025 and on or before March 31, 2027.

Clean Technology Manufacturing Investment Tax Credit

Budget 2025 proposed to expand the list of critical minerals eligible for the 30% clean technology manufacturing investment tax credit to include antimony, indium, gallium, germanium and scandium. This refundable investment tax credit applies to investments in new machinery and equipment used to manufacture or process key clean technologies, or to extract, process, or recycle critical minerals essential for clean technology supply chains, currently including lithium, cobalt, nickel, graphite, copper and rare earth elements.

This measure would apply in respect of property that is acquired and becomes available for use on or after November 4, 2025.

Carbon Capture, Utilization and Storage (CCUS) Investment Tax Credit (ITC)

The CCUS ITC provides three different credit rates depending on the purpose of the equipment, with the following credit rates applying to eligible CCUS expenditures incurred from the start of 2022 to the end of 2030, declining for eligible expenditures that are incurred from the start of 2031 to the end of 2040:

60% (declining to 30%) for eligible capture equipment used in a direct air capture project;
50% (declining to 25%) for all other eligible capture equipment; and
37.5% (declining to 18.75%) for eligible transportation, storage and use equipment.

The extent to which the CCUS tax credit is available to a CCUS project and respective eligible equipment depends on the end use of the carbon dioxide (CO2) being captured. Eligible uses include dedicated geological storage and storage in concrete, but not enhanced oil recovery (EOR).

Budget 2025 proposed to extend the availability of the full credit rates by 5 years, so that the full rates apply to eligible expenditures incurred from the start of 2022 to the end of 2035, declining to the lower rates for eligible expenditures that are incurred from the start of 2036 to the end of 2040. A previously announced review of the CCUS investment tax credit rates will be undertaken before 2035 (rather than before 2030).

Clean Electricity Investment Tax Credit (ITC) and Canada Growth Fund

Budget 2025 proposed to include the Canada Growth Fund as an entity eligible for the 15% clean electricity ITC. Budget 2025 also proposed to introduce an exception so that financing provided by the Canada Growth Fund would not reduce the cost of eligible property for the purpose of computing the clean electricity ITC available to other entities. These measures would apply to eligible property that is acquired and that becomes available for use on or after November 4, 2025.

C. International Measures

Transfer Pricing

Transfer pricing rules are used to allocate profit among the various entities of a multinational enterprise (MNE) group. The accepted international standard is the arm's length principle set out in Article 9 (Associated Enterprises) of the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention on Income and Capital and included in Canada’s bilateral tax treaties. In addition, the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (the “OECD Transfer Pricing Guidelines”) present internationally agreed principles and provide guidelines for the application of the arm’s length principle.

Budget 2025 proposed to modernise Canada’s transfer pricing rules to better align with the international consensus on the application of the arm’s length principle. In addition, an interpretation rule would be added to ensure that Canada’s transfer pricing rules are applied in a manner consistent with the analytic framework set out by the OECD Transfer Pricing Guidelines.

The new rules would provide more detail on how cross-border transactions between non-arm’s length persons must be analysed. A new transfer pricing adjustment application rule would apply if two conditions are met: (i) there is a transaction or series of transactions between a taxpayer and a non-resident person with whom the taxpayer does not deal at arm’s length; and (ii) the transaction or series (once it has been analysed and determined) includes actual conditions different from arm’s length conditions. The actual conditions are determined not only by the contractual terms of the transaction or series, but also by other “economically relevant characteristics,” including the conduct of the participants.

The intention of transfer pricing analysis is to determine the price that would have been charged between arm’s length parties in comparable circumstances, taking into account the options realistically available to them at the time of entering into the transaction or series. The arm’s length price is the fair market value that should be charged, and the tax authorities can reassess taxpayers transacting at other values.

In addition to modifying the manner in which acceptable transfer prices must be determined, the new rules would modify certain administrative measures. These include the following items:

increasing the threshold for the transfer pricing penalty to apply from a $5 million transfer pricing adjustment to a $10 million adjustment;
clarifying the transfer pricing documentation requirements and also more closely aligning them with the new definitions and the requirements to select and apply the most appropriate method;
providing for simplified documentation requirements when prescribed conditions are met; and
reducing the time to provide transfer pricing documentation from 3 months to 30 days (the requirement for taxpayers and partnerships to make or obtain the appropriate records or documentation by their documentation-due date, generally the due date for their tax return for the year in which the transactions occurred, would remain unchanged).

This measure would apply to taxation years that begin after November 4, 2025.

Budget 2025 proposed changes to help prevent these schemes by introducing a new reverse charge mechanism (RCM) beginning with certain supplies in the telecommunications sector (such as providers of voice-over internet protocol, VoIP, services).

Under the proposed new rules, suppliers would not be required to collect the GST/HST payable on the supply. Instead, recipients would be required to self-assess and report the tax payable in their GST/HST return. If entitled, the recipient could claim an input tax credit (ITC) in the same return provided that they accounted for the GST/HST payable. This system appears to be intended to prevent the collection of GST/HST by parties that may not remit the funds to CRA.

The government will continue to monitor and assess the presence of carousel fraud in order to determine whether other supplies should also be subject to an RCM in the future.

Feedback on these proposals can be submitted by email to Consultation-Legislation@fin.gc.ca by January 12, 2026.

Manual Osteopathic Services

Budget 2025 proposed to clarify that osteopathic services rendered by individuals who are not osteopathic physicians are taxable under the GST/HST regime. This measure would apply to supplies made after June 5, 2025. However, it would not apply to a supply of osteopathic services made from June 6, 2025 to November 4, 2025 if the supplier did not charge, collect or remit any amount as or on account of tax in respect of the supply.

D. Sales and Excise Measures

Underused Housing Tax (UHT)

Budget 2025 proposed to eliminate the UHT (which first took effect on January 1, 2022) as of the 2025 calendar year. No UHT would be payable and no UHT returns would be required in respect of the 2025 and subsequent calendar years. Filing requirements, penalties and interest in respect of prior periods would not be removed.

Luxury Tax on Aircraft and Vessels

Budget 2025 proposed to end the luxury tax on subject aircraft and subject vessels. All instances of the tax would cease to be payable after November 4, 2025. Registered vendors in respect of these items would be required to file a final return. The tax would remain applicable to vehicles (such as cars and SUVs) with a value above $100,000.

Carousel GST/HST Frauds

Carousel schemes use a series of real or fraudulent transactions where at least one person collects GST/HST in respect of a supply of property or services but does not remit the amounts to the government.

E. Other Measures

Bare Trust Filings

Historically, a trust was required to file a T3 income tax return only if it met one of a number of parameters, and certain arrangements commonly referred to as bare trusts were excluded from the definition of trusts, and thus from filing requirements, entirely.

Effective for trust years ended December 31, 2023 or later, further requirements were added for a trust to be excluded from the filing requirements, new requirements to disclose substantial information regarding a trust's settlors, trustees, beneficiaries and certain other persons were added (filed on Schedule 15 ) and bare trust arrangements were also required to file.

Due to concerns that bare trust arrangements were extremely common, and often not recognized as trust arrangements by their participants, significant media attention focused on the administrative burden the obligation to file returns for bare trusts imposed on Canadians in late 2023 and early 2024. CRA waived the filing requirements for bare trusts first for 2023, shortly before the filing deadline, and again for 2024, five months before the filing deadline.

Draft legislation to modify these requirements was released on August 12, 2024. On August 15, 2025, revised draft legislation and explanatory notes were released. Neither of these proposals was ever tabled as a Bill. While these proposed measures would reduce the bare trust arrangements for which filings would be required, many common arrangements would still require T3 income tax returns to be filed, leaving a considerable administrative burden.

Budget 2025 confirmed that the government intends to proceed with the August 15, 2025 proposals, subject to further modifications for consultations and deliberations since their release. However, the application date for reporting by bare trusts would be deferred to apply to taxation years ending on or after December 31, 2026, and not require such filings for the 2025 taxation year.

Avoiding the 21-Year Deemed Disposition Rule for Trusts

Trusts are generally deemed to have disposed of their property for fair market value proceeds on the 21st anniversary of their creation, and every 21st anniversary thereafter (the “21-year rule”). Where property is transferred by a trust on a tax-deferred basis to a new trust, a rule prevents the avoidance of the 21-year rule. This rule prevents transactions that would indefinitely postpone tax on accrued gains. However, certain tax avoidance planning techniques have been used to avoid both the 21-year rule and the anti-avoidance rule. For example, this planning may involve transferring trust property on a tax-deferred basis to a beneficiary that is a corporation owned by a new trust.

Budget 2025 proposed to broaden the current anti-avoidance rule for direct trust-to-trust transfers to include indirect transfers of trust property to other trusts. This measure would apply in respect of transfers of property that occur on or after November 4, 2025.

Non-profit Organizations’ (NPO) Reporting Obligations

The Government stated that it intends to proceed with proposed expansions to the existing reporting requirements for NPOs by requiring basic filings for smaller NPOs not otherwise required to file and adding regular filing requirements for entities with receipts over $50,000. However, this would be deferred to apply for taxation years beginning on or after January 1, 2027 rather than commencing for 2026. The government is reviewing the feedback it received from consultations with stakeholders and will release final proposals in due course with the objective of minimising any additional administrative burden and clarifying which organizations are, or are not, subject to the new requirement.

Various Other Matters

Budget 2025 proposed several other measures, including the following:

A 2-year pilot project would be conducted to assess whether EI eligibility and entitlement can be determined accurately and securely using real-time payroll information.
Claimants receiving EI parental benefits would be eligible for an additional eight weeks of parental benefits in the event of the death of the child.
Temporary flexibility would be provided in respect of the EI Work-Sharing program, as announced on March 7, 2025, to provide benefits to eligible employees who agree to work reduced hours due to a decrease in business activity beyond their employer’s control.
Temporary EI measures that enhance income supports for Canadian workers whose jobs have been impacted by the economic uncertainty caused by foreign tariffs would be provided.
The Canada Labour Code would be amended to restrict the use of non-compete agreements in employment contracts for federally regulated businesses, with consultations beginning in early 2026.
$97 million would be provided over five years, starting in 2026-27, to establish the Foreign Credential Recognition Action Fund to work with the provinces and territories to improve foreign credential recognition, with a focus on health and construction sectors.
Legislation would be introduced to regulate the issuance of fiat-backed stablecoins in Canada.
Limits to access the informal procedure in the Tax Court would be reviewed.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act would be modified to restrict the acceptance of: cash deposits from one person into the account of another person; and a cash payment, donation or deposit of $10,000 or more.

Budget 2025 also noted that a comprehensive expenditure review was conducted to identify ways to reduce annual spending on an organization-by-organization basis, intended to result in more than $9 billion in savings annually. For example, spending would be reduced in CRA by winding down initiatives such as the digital services tax, the federal fuel charge and the Canada carbon rebate and the underused housing tax. Further, artificial intelligence (AI) and process automation would be used to reduce labour needs in compliance and collection activities.

F. Previously Announced Measures

In addition to items discussed above in conjunction with other proposals, Budget 2025 confirmed the government’s intention to proceed with the following previously announced tax and related measures, as modified to consider consultations, deliberations and legislative developments, since their release:

Legislative and regulatory proposals released on August 15, 2025, including with respect to the following measures:
capital gains rollover on small business investments;
crypto-asset reporting framework and the common reporting standard (subject to a deferred application date of January 1, 2027);
tax exemption for sales to employee ownership trusts;
tax exemption for sales to worker cooperatives;
non-compliance with information requests;
excessive interest and financing expenses limitation rules;
substantive CCPCs;
goods and services tax/harmonized sales tax (GST/HST) rules for the redemption of coupons;
technical tax amendments to the Income Tax Act and the Income Tax Regulations;
technical amendments to the Global Minimum Tax Act; and
technical amendments relating to the GST/HST and excise levies.

Legislative proposals released on June 30, 2025, to ensure that all Canada carbon rebates for small businesses are provided tax-free, and to extend the filing deadline for the 2019 to 2023 calendar years.
The extension of the mineral exploration tax credit announced on March 3, 2025.
Legislative proposals released on January 23, 2025, to extend the 2024 charitable donations deadline.
Legislative and regulatory proposals announced in the 2024 Fall Economic Statement, including with respect to the following measures:
exempting the Canada disability benefit from income;
expanding eligibility under the clean electricity investment tax credit to the Canada infrastructure bank;
modifying the small nuclear energy eligibility under the clean technology investment tax credit; and
expanding eligibility under the clean hydrogen investment tax credit to methane pyrolysis.

Legislative and regulatory proposals to remove the GST on the construction of new student residences released on November 19, 2024.
Legislative amendments to give effect to the suspension of the Agreement Between the Government of Canada and the Government of the Russian Federation for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital under domestic law as of November 18, 2024.
Legislative and regulatory proposals released on August 12, 2024, including with respect to the following measures:
alternative minimum tax (other than changes related to resource expense deductions);
disability supports deduction;
charities and qualified donees;
registered education savings plans;
avoidance of tax debts;
mutual fund corporations;
synthetic equity arrangements;
manipulation of bankrupt status;
accelerated capital cost allowance for purpose-built rental housing;
withholding for non-resident service providers;
regulations related to the application of the enhanced (100%) GST rental rebate to cooperative housing corporations;
clean electricity investment tax credit;
expanding eligibility under the clean technology investment tax credit to support generation of electricity and heat from waste biomass;
proposed expansion of eligibility for the clean technology manufacturing investment tax credit to support polymetallic extraction and processing;
amendments to the Global Minimum Tax Act and the Income Tax Conventions Interpretation Act;
technical tax amendments to the Income Tax Act and the Income Tax Regulations; and
technical amendments relating to the GST/HST, excise levies and other taxes and charges.

Legislative proposals released on July 12, 2024, related to implementing an opt-in fuel, alcohol, cannabis, tobacco and vaping (FACT) value-added sales tax framework for interested Indigenous governments.
The proposed exemption from the alternative minimum tax for certain trusts for the benefit of indigenous groups announced in Budget 2024.
The proposed increase in the lifetime capital gains exemption to apply to up to $1.25 million of eligible capital gains announced in Budget 2024.
Legislative and regulatory proposals announced in Budget 2024 with respect to a new importation limit for packaged raw leaf tobacco for personal use.
Tax measures to amend the Excise Tax Act, the Air Travellers Security Charge Act, the Excise Act, 2001 and the Select Luxury Items Tax Act to give effect to the proposals relating to non-compliance with information requests and to avoidance of tax debts announced in Budget 2024.
Legislative and regulatory proposals released on August 4, 2023, including with respect to the following measures:

technical amendments to GST/HST rules for financial institutions;
tax-exempt sales of motive fuels for export; and
revised Luxury Tax draft regulations to provide greater clarity on the tax treatment of luxury items.

Legislative and regulatory proposals released on August 9, 2022, including with respect to the following measures:
Technical amendments to the Income Tax Act and Income Tax Regulations; and
Remaining legislative and regulatory proposals relating to the GST/HST, excise levies and other taxes and charges.

Legislative amendments to implement the hybrid mismatch arrangements rules announced in Budget 2021.
The income tax measure announced on December 20, 2019, to extend the maturation period of amateur athlete trusts maturing in 2019 by one year, from eight years to nine years.

Budget 2025 also reaffirmed the government’s commitment to move forward as required with other technical amendments to improve the certainty and integrity of the tax system. Budget 2025 reflected the cancellation of the previously proposed increase to the capital gains inclusion rate and the Canadian entrepreneurs’ incentive.

The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.

No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Important CRA Updates & Reminders

2025-10-01T17:18:14Z

CRA Online Mail

Failure to actively monitor and review CRA online mail may result in significant penalties, interest and/or loss of ability to dispute CRA assessments.

Individuals:

As of July 3, 2025, approximately 500,000 benefit recipients, such as those receiving the Canada Child Benefit, Old Age Security, or the Disability Tax Credit began receiving CRA correspondence online through their Canada Revenue Agency (CRA) My Account . On September 4, 2025, an additional 900,000 individuals were transitioned. If you were affected, the CRA indicated that you should have received an email and in some cases a letter in late August outlining these changes and what to expect. Unlike the changes made to Business mail, the CRA did not provide any advance notice of their plan to transition individuals to online mail until after letters were sent.

The dates for subsequent phases have not yet been announced.

Important Steps for Taxpayers:

Check your CRA My Account regularly even if you aren’t affected to ensure you have access to notifications (paper or online) and that you haven’t missed any important correspondence such as instalment reminders, notices of assessments or reassessments, or CRA review letters with a limited time to reply to the CRA.
You can change your notification preferences including opting out of online mail at any time. Should you wish to continue receiving online correspondence, ensure that your email address on file with the CRA is correct under your profile in your My Account .

Businesses:

As a reminder, on May 12, 2025, the CRA transitioned to online mail as the default method for delivering most business correspondence.

This means that if you operate a business, your tax notices and other communications including letters, forms, and statements will be sent through My Business Account . Once posted, the correspondence is legally considered delivered on that date, so it is important to log in and check your CRA correspondence regularly as well as to ensure that you have set up your notification preferences .

You do have the option to opt out of online correspondence. To do so, you must either:

Submit Form RC681 – Request to Activate Paper Mail for My Business, or
Adjust your notification settings directly in My Business Account .

Please note that any requests to receive paper mail must be renewed every two years.

Also, be aware that accounting firms and other representatives do not have access to any CRA notification preferences for both individuals and businesses. We cannot make changes or receive CRA notifications on your behalf.

How does the Canada Post Strike affect correspondence from CRA

Due to the recent Canada Post strike the CRA strongly encourages all Canadians and tax-filers sign up for a CRA account and direct deposit .

To avoid disruptions receiving important CRA documents and benefit payments please sign up for direct deposit and set your correspondence preferences in your CRA account to “electronic mail.”

To avoid potential interest and penalties on amounts owing, we also encourage you to send any payment(s) to the CRA electronically.

The CRA typically does not resend notices delayed or lost in the mail. Ensuring uninterrupted access to digital services is therefore essential.

Ontario Annual Return Filings

Please be advised that some business owners may experience a temporary loss of access to their CRA My Business Account following the filing of the Ontario Corporate Annual Return.

This issue occurs during the transfer of information between the Ontario Business Registry (OBR) and the CRA. Both the CRA and OBR are aware of the problem and are actively working toward a resolution.

Should you find that your access has been revoked, please contact our office. A member of our administrative team will be happy to assist you.

Summer 2025 Newsletter

2025-07-02T18:02:51Z

Accounting

Tax Updates

Agriculture Updates

Please note that while this section is agriculture-specific, the general business and tax topics in other sections contain important information that is also applicable to agriculture clients. Please ensure you consider the remainder of the newsletter.

Miscellaneous Business Updates

Human Resources Solutions

Wealth Management

Firm News

Please Note Our Summer Hours

The offices of Ward & Uptigrove will close on Fridays at 12:00pm from July 4 through to August 29, 2025.

Improvements to the Ontario Made Manufacturing Investment Tax Credit - Ontario Budget 2025

Eligible buildings and equipment used in manufacturing and processing in Ontario that are acquired and become available for use during the period May 15, 2025 to December 31, 2029 are eligible for the Ontario Made Manufacturing Investment Tax Credit (the “OMMITC”).

The OMMITC was initially introduced in the 2023 Ontario budget. The 2025 Ontario budget enhances and expands the OMMITC by:

Increasing the OMMITC rate to 15% (from 10%), and
Expanding eligibility for the OMMITC to non-Canadian Controlled Private Corporations as a non-refundable tax credit.

The Ontario budget also introduced a repayment of the OMMITC in situations where the eligible property is, after May 14, 2025, sold or converted to non-M&P use within 5 years.

GST Relief for First-Time Home Buyers on New Homes Valued Up to $1.5 Million

On May 27, 2025, the federal government introduced a new GST rebate for first-time home buyers (the “Rebate”). To lower the upfront cost of buying a new home for young Canadians and spur the construction of new homes across the country, the federal government is eliminating the Goods and Services Tax (GST) for first-time home buyers on new homes up to $1 million and reducing the GST for first-time home buyers on new homes between $1 million and $1.5 million.

Who is eligible for the Rebate?

The Rebate is available to individuals that are:

At least 18 years or age and either a Canadian citizen or a permanent resident of Canada;
First-time home buyers and have not lived in a home that they (or their spouse or common-law partner) owned and was their primary place of residence in the calendar year or in the four preceding calendar years;
Acquiring the home as their primary place of residence; and
The first individuals to occupy the home as a place of residence after the construction (or substantial renovation) of the residential complex is substantially completed.

What homes qualify?

The Rebate will generally be available:

For purchase and sale agreements entered into during the period May 27, 2025 to December 31, 2030 for new homes purchased from a builder or shares of a cooperative housing corporation; or
For owner-built homes that begin construction during the period May 27, 2025 to December 31, 2030.

How much is the rebate?

2025 Federal Budget - Update

The newly elected federal minority Liberal government has indicated that it will present a 2025 fall budget. We will address any significant tax matters from the 2025 federal budget in our 2025 year end newsletter that will be released December 2025.

Starting Farm Succession Planning Early with your Accountant

There are many moving pieces in succession planning including, personal, family, financial, tax, and legal considerations. From initial conversations to putting a plan in motion, farm succession is an ongoing process. Plans can take months or years to implement. Involving your accountant in the initial discussions and planning process allows time to effectively analyze any tax tools available. This allows for the creation of a tax efficient plan that minimizes financial challenges and ensures family goals are achieved. This plan should also be developed with input from your financial advisor, lawyer, lender and other trusted professionals involved in your farming operations.

From an accounting and tax perspective, there are valuable tax tools that can be used in farm succession planning including utilizing the lifetime capital gains exemptions and deferring tax through intergenerational farm transfers. These tools have specific criteria that must be met in order to be utilized. One of the first steps your accountant can provide is an analysis of your property and assets owed to determine if there are applicable tax tools that can be used in your succession plan.

To complete this analysis, your accountant will gather information on the history of your farm assets with the goal of understanding your ownership structure, your operations, who is involved and who owns the assets involved. Early planning discussions with your accountant will involve questions including: Are your operations run through a partnership or a corporation? Are your assets owned in the same structure? What assets are being considered in this succession plan? How were those assets obtained and at what amount? Although this seems to be a simple process, prior years' information is not often readily accessible and farm operations and asset ownership can be complex and unique to you. It can take time to obtain the records and information required. Consideration also needs to be given to any potential tax tools used in any previous succession of the assets being considered in the current succession.

Starting discussions early provides families with time to identify all parties’ objectives and time to align those objectives. From daily farm management to farm financial health and retirement financial security, open communication is essential to any succession plan. If you are starting to think about transferring your farm assets, reach out to your accountant to discuss any planning that can be completed in advance to create a successful plan.

* While this article focuses on farm succession planning, involve your accountant early for any major business changes to ensure potential tax implications are reviewed.

Additional resources:

Corporate Succession Planning and Estate Equalization

Farm Property Class Tax Rate Program Update

Agricorp now offers a simplified online application process for farmland owners who may need to apply for a reduced property tax rate on their farmland.

This option applies if you:

Have recently purchased farmland
Need an exemption to eligibility criteria for the program
Have made changes to their farmland ownership, such as:
Amending property rental agreements or land usage
Updating farm business structures
Transferring property ownership to a family member
Adding or removing a spouse after a marriage or separation
Ownership becoming part of an estate

If you are currently eligible and enrolled in the Farm Property Class Tax Rate Program (i.e. you are receiving the reduced property tax rate on your municipal tax bill), there is nothing further to do.

Please see the Agricorp Feature Sheet for more information on the Farm Property Class Tax Rate Program. To access the online application, visit agricorp.com/farmtax for more information.

Important Changes to the AgriInvest Program

Canada Post service disruption notice: Agriculture and Agri-Food Canada (AAFC) will not send AgriInvest program statements, notices or correspondence to producers by mail during the postal service disruption. If you are a My AAFC account user you can login to view you program notices to ensure you do not miss your deposit deadline. Alternatively, you can call 1-866-367-8506 to ask for your deposit amount and confirm your deadline.

Starting with the 2025 AgriInvest program year there are two significant changes to the program:

New filing deadline – The deadline to file your 2025 AgriInvest program form T1163/Statement A will be June 30, 2026 (previously September 30).
Agri-environmental risk assessment – if your average annual net sales are $1 million or more for the previous three program years you must submit an eligible agri-environmental risk assessment to be eligible for the government matching deposit. Annual net sales are calculated by subtracting your gross purchases on your allowable commodities from your gross sales on your allowable commodities. The valid agri-environmental assessment must be obtained before your 2025 fiscal year-end.

Once the agri-environmental risk assessment is in place, a declaration must be completed and submitted before making any matchable deposit. The declaration must be submitted each year that average ANS is above $1 million unless the agri-environmental assessment is valid for more than one fiscal year.

AgriInvest has identified the following as eligible agri-environmental risk assessments:

Canadian Roundtable for Sustainable Beef (CRSB) Sustainable Beef Production Standard by a CSRB approved certification body
Certified Organic
Environmental Farm Plan
Nutrient Management Plans (such as manure management)
Nutrient Management Plans from 4R Designated or Certified Experts
Saskatchewan agri-environmental risk assessment
Plan agroenvironnemental de fertilisation
Plan d’accompagnement agroenvironnemental

Ontario Soil and Crop Improvement Association (OSCIA) offers Environmental Farms Plans. For more information about the OSCIA and how to complete an environmental farm plan refer to their website here .

Program & Tax Credit Updates

Regional Opportunities Investment Tax Credit – The Ontario Regional Opportunities Investment Tax Credit is a 10% refundable Corporate Income Tax Credit (to a $45,000 maximum credit) for corporations that invest more than $50,000 on construction, renovation or acquisition of eligible commercial and industrial buildings in certain regions. For more information on this tax credit, who is eligible and qualifying regions please refer to this article here .

Poultry and Egg On-Farm Investment Program (PEFIP) - Poultry and Egg On-Farm Investment Program (PEFIP) is a 10-year program (ending March 31, 2031) to help supply-managed poultry and egg producers adapt to market changes resulting from the implementation of international trade agreements. Additional information can be found here . If you require assistance with the registration process or a project application, please contact your accountant.

Deadlines

AgriInvest: Deadlines for the 2024 program year

September 30, 2025: For individual participation AgriInvest only, submit 2024 T1163 to Canada Revenue Agency.
September 30, 2025: For corporations, trusts and special individuals’ participating in AgriInvest only, submit 2024 Statement A to Agricorp.
For the 2025 program year, the deadline has changed from September 30 to June 30. Please refer to the article here .

AgriStability Deadlines:

For the 2024 program year

June 30, 2025: Submit Statement A (corporations, trusts and special individuals)
June 30, 2025: Submit Year-end report and Claim form
June 30, 2025: Pay fee, submit New Participant Form or cancel coverage for 2024 AgriStability
December 31, 2025: Final deadline – Report your 2024 farm income to Canada Revenue Agency (corporations)

CRA Change to Online Mail for Businesses

Effective June 16 ^th , the Canada Revenue Agency (CRA) has updated its default communication method for all businesses to online mail rather than paper correspondence. As a result, all businesses must either update their communication preferences via their CRA My Business Account, or complete the Request to Activate Paper Mail for my Business form, available here .

This change also applies to individuals with personal HST or payroll accounts, as well as partnerships.

There are exemptions to these changes for Charities.

Email Notifications Required

To ensure you receive CRA correspondence, it is essential to have a valid email address on file. You can add or update your email address by logging into your CRA My Business Account, navigating to the Profile section, and selecting Manage Notification Preferences. From there, you may register, update, or delete an email address linked to your account. Click here for step-by-step instructions.

Opting Out of Online Mail

If you prefer to continue receiving paper mail, you may opt out of online mail in one of two ways:

Submit the CRA’s Request to Activate Paper Mail form, or
Update your preferences directly through your CRA My Business Account under the Profile section by selecting Manage Mail for My Business. You will then be able to opt out of online mail for the applicable CRA accounts. Once this request is submitted, the CRA may call the business owner to verify the change.

It is important to note that the opt-out request is valid for two years only. If you wish to continue to receive paper mail beyond this period, a new request will need to be submitted to the CRA.

Next Steps

If your business has not yet registered for a CRA My Business Account, we strongly encourage doing so. For instructions on how to register, please refer to the following communication posted on our website here .

Please be aware that Ward & Uptigrove will not be monitoring your CRA online mail. CRA correspondence includes important and time sensitive information. We recommend checking your CRA account at least every two weeks, and more frequently if your business is currently under audit, review, or have ongoing matters with the CRA.

The CRA released correspondence regarding this change which can be found here .

Authorization Changes

As many of you may be aware, several years ago CRA made changes to the Authorization process for Ward & Uptigrove to gain access to business accounts through Represent a Client – they have now announced further changes for how Representatives can gain authorization for personal accounts as well.

Starting July 15, 2025, Authorize a Representative through EFILE will no longer be available for individuals. The options to authorize a representative are now:

Authorize a representative through MyAccount
Provide a representative with a Notice of Assessment from a previous year's tax return and sign a certification page which is submitted to the CRA to be processed. CRA may still contact you to verify the authorization request under this method

Ward & Uptigrove uses authorization to download information from CRA for your personal returns to ensure accuracy of information as well as to correspond with CRA on your behalf for various reasons.

If you have MyAccount, you can review your Authorized Representatives on file and revoke access at any time. If you notice that Ward & Uptigrove is not authorized and you would like them to be, reach out to our administrative team for next steps.

Direct Deposit

Starting March 24, 2025, CRA is no longer accepting direct deposit updates or changes through personal tax returns. All changes must be done through MyAccount, a Canadian Bank or Credit Union, or direct deposit enrolment form .

Common Summer/Fall CRA Communications

After personal tax returns are filed, there are a number of communications you may receive from CRA through the summer and fall months.

Pre/Post Assessments:

These are letters from CRA requesting back up documentation regarding specific sections of your tax return either prior to the assessment of your return and issuing of refunds (pre-assessment) or after the return has been assessed and refunds have been issued (post-assessment).

Pre-assessments often occur when there is a large unusual refund amount that is filed. These can be scenarios such as the first year of paying spousal support, large one-time donations, or a year with a large increase in medical expenses.

Post-assessments are often random; they can sometimes be tied to projects that the CRA is running. Currently there is a project for foreign tax credits so there is an increased number of those specific types of post-assessments. Typical post-assessments seen every year relate to donations, medical expenses, and eligible dependent claims.

Matching Letters:

These are letters from CRA requesting t-slip documentation or reconciliations of income. The most common type is due to CRA having slips under your SIN that were not included in your return. This year in particular we may see an increase in matching letters due to the delay in t-slips being processed by CRA.

Other reasons may include:

Joint investment accounts - these t-slips are split between spouses, and CRA is trying to reconcile all of the t-slips between two taxpayers
Pension splitting - CRA is trying to reconcile eligible pension income and withholding tax split between spouses
Employers not submitting T4 slips to CRA – the CRA will not have a record of the submission from your employer and are trying to verify the EI, CPP, and tax withheld is correct based on the T4 that you were issued

TFSA Overcontributions:

Banking institutions are required to submit TFSA transaction history to CRA at the end of February of each year. CRA uses this information to update your contribution history and allowable contribution room on your account. As their records are updated, they will automatically assess overcontribution penalties and send out letters with their findings.

If you receive this type of letter, it is important to verify if your account is still overcontributed. If so, you may be required to make a withdrawal and pay an additional penalty for the overcontributed amount in 2025. Penalties are 1% per month on the overcontributed balance.

RRSP Overcontributions:

Letters regarding RRSP overcontributions are less common but may be seen more in the future as CRA’s automated reconciliations improve. Similar to TFSA’s, banking institutions are required to submit contribution receipts to CRA at the end of February of each year which they use to update your allowable contribution room.

Currently, CRA requires you to self-assess any RRSP overcontributions by filing a T1-OVP and pay a 1% per month penalty, however; there have been a few letters sent to taxpayers where CRA has identified an overcontribution and assessed a penalty to the taxpayer automatically. Because the banks do not provide detailed information, CRA does not know which month the account became overcontributed and will assume that it has been overcontributed for the entire year, which can result in unnecessary penalties being paid.

What do to if you Receive a Correspondence from CRA:

Most CRA letters will have a 30-day response requirement. If no response is submitted or no extension is requested, they will assume the claim was invalid and reassess your return denying the claim made.

These letters can be responded to by the taxpayers themselves, however; if you are unsure or would like assistance in responding, forward the correspondence to your Client Manager as soon as possible. Please note that these matters are a separate service from personal tax preparation and will be invoiced accordingly. If you are enrolled in Audit Shield, your Audit Shield fee would already cover any work completed by us. Please note that pre-assessment reviews of a T1 filing (other than a pre assessment review of the business items of a Sole Proprietor) are not covered by audit shield.

Ward & Uptigrove often saves source documents for the common CRA requests (donation and medical receipts), however; if we do not have the required source documentation, we will reach out to ensure the correct information is provided in an effort to minimize the correspondence with CRA.

As CRA shifts to electronic communication, it is also important to verify your notification settings on your MyAccount as these letters can be easily missed.

Your success is our business. Looking to learn more about services Ward & Uptigrove offers, click here .

HR Updates

25 Years of Human Resources Excellence

Empowering People. Driving Success.

This year marks a major milestone—25 years of our Human Resources Solutions (HRS) division. Since its inception in the summer of 2000, our Partners recognized that human resources is a specialized and ever-evolving field, requiring expertise beyond the scope of accounting. To better serve our clients, we brought HR professionals in-house, delivering a comprehensive, one-stop approach to business support.

Our HRS team is an essential partner for our clients, helping them succeed through strong employee relationships, compliance, and effective workplace solutions. Guided by our commitment to caring for both staff and clients, we’ve expanded our expertise over the years to address the most complex workplace challenges. Today, our HR services include:

Employee relations and investigations
Accommodation and return to work
Conflict resolution and mediation
Compensation
Health and safety compliance
Immigration and recruitment strategies
…and much more!

We take pride in supporting our clients with developing their teams, strengthening workplace culture, and improving business performance. As we celebrate this journey, we honour the relationships we’ve built, the expertise we’ve developed, and the bright future ahead—together.

Thank you for being part of our success. Here’s to the next 25 years!

Learn more about the HR Solutions Service Offerings: Human Resources Solutions - Ward & Uptigrove or email us at HRresults@w-u.on.ca

Have You Heard?: Immigration Services

We are expanding our service offerings again to better serve you! We now are providing comprehensive immigration services tailored to businesses seeking to hire and retain international talent, including:

Labour Market Impact Assessment Applications
Work Permit Applications and Extensions
Permanent Residency
Immigration Strategy Planning
Compliance and Risk Management
Immigration Audit Review and Assistance

Permanent Residency: Canada’s Focus on Occupation-Specific Candidates

Throughout the Spring, the Government of Canada has continued to focus on filling labour shortages in key sectors. Recent Invitations to Apply for Permanent Residency have primarily been extended to candidates with work experience in STEM (Science, Technology, Engineering, and Math), healthcare, trades, and early childhood education occupations.

If your business relies on international talent, now is the time to strategize! Candidates with work experience in these occupations may be prioritized for permanent residence, helping your business retain foreign professional long term.

Contact us:

Hanne Nauwelaerts, RCIC (R1034450), CHRP

HanneN@w-u.on.ca

Looking for more information on Immigration Services? We are hosting a webinar on July 8th.

Click here for more information on this webinar.

Minimum Wage Increases

Ontario Minimum Wage Increasing October 1, 2025

The general minimum wage will increase to $17.60 an hour, effective October 1, 2025.

Student minimum wage will increase to $16.60 an hour. This wage applies to students under the age of 18 who work 28 hours a week or fewer when school is in session or who work during a school break or summer/winter holidays. For the full list of minimum wage changes for provincially regulated businesses, check out: Minimum wage | Your guide to the Employment Standards Act | ontario.ca

Federal Minimum Wage Increased April 1, 2025

As of April 1, 2025 the federally regulated businesses minimum wage increase to $17.75 an hour, which was a 2.4% increase. More information about this change: Increasing the federal minimum wage starting April 1, 2025 - Canada.ca

Mandatory Measures

Mandatory Pre-Hire Information: Are You Ready?

Starting July 1, 2025, Ontario employers with 25 or more employees will be required, under the Employment Standards Act, to provide new hires with specific written information before their first day of work or as soon as reasonably possible. This requirement enhances transparency and ensures employees fully understand their employment terms from the outset—critical for compliance, record-keeping, and onboarding.

The required information includes, but not limited to:

The employer’s legal name and any operating or business names
Employer contact details, including address, phone number, and relevant contacts
General description of the employee’s work location
The employee’s starting wage, rate, commission structure, or other applicable pay details
General outline of the employees’ anticipated initial work hours

Mandatory Washroom Cleaning Records

Effective July 1, 2025, a new regulation under the Occupational Health and Safety Act (OHSA) will require employers to maintain clean and sanitary washroom facilities. Employers must keep records of washroom cleanings, documenting the date and time of the two most recent cleanings. These records must be posted near the washroom or made accessible electronically.

Mark Your Calendar: More Employment Changes - Effective January 1, 2026

1. New Job Posting Requirements

Employers with 25 or more employees will have to comply with the following regulations when publicly advertising job postings:

Compensation Disclosure : Job postings will have to include information about the expected compensation or a range of expected compensation for the position.
If a range is provided, it cannot exceed $50,000 annually (for example, $60,000-$110,000).
Note, that this requirement will NOT apply to positions with expected compensation over $200,000 annually.
Artificial Intelligence (AI) Usage Disclosure : If AI is used to screen, assess, or select applicants, this practice must be disclosed in the job posting.
Existing Vacancy Statement : The job posting must indicate whether it is for an existing vacancy.

Click here for an example job posting . The highlighted yellow sections give you an example of how you could express these details within the job posting.

2. Canadian Experience Restrictions Prohibited

Employers will be prohibited from including requirements related to Canadian work experience in job postings or associated application forms unless prescribed by law. This measure is to promote inclusivity and equal opportunity for all applicants.

3. Closing the Loop: Employers Must Notify Interviewed Candidates

Employers who interview candidates for a publicly advertised position must notify applicants within 45 days of the final interview about whether a hiring decision has been made. This notification can be delivered in person, in writing, or through electronic communication.

Wondering what qualifies as an interview? While the definition is somewhat broad, it generally refers to an in-person meeting or a telephone/video conference (such as zoom, teams, etc.) where candidates are asked questions to assess their suitability for the role. It does not include initial screenings used to shortlist candidates for an interview.

4. Don’t Toss Those Files: New Record Keeping Rules Ahead

Employers will be required to retain records of job postings, application forms, and any information provided to applicant's post-interview for three years. This measure enhances accountability and supports compliance audits.

Staying up to date with changes may not be the most exciting task, but it’s crucial for maintaining compliance and fostering a fair work environment. Now is the time to review your templates, policies, hiring practices, job postings, and more—to ensure readiness for these upcoming changes. A little preparation now can go a long way in keeping your business on track!

Understanding Workplace Accommodation: Employer and Employee Responsibilities

Workplace accommodation has become difficult for employers to manage with vague medical notes and the uncertainty about what information they can request from employees and their medical practitioners. Employers must balance legal obligations to accommodate with respect for employee privacy.

Responsibilities

Employer Responsibilities

Maintain Communication: Employers have a legal duty to stay in touch with employees on leave.
Request Medical Information: While employers cannot ask for a diagnosis, they can request prognosis details, including the employee’s abilities, limitations, and restrictions. The best way to receive this information is through a Functional Abilities Form (FAF).
WSIB Report: If the injury or illness is work-related, or suspected of being related, employers must report it to the Workplace Safety and Insurance Board (WSIB) within three business days
*If the workplace is covered by WSIB.

Employee Responsibilities

Maintain Communication: Employees must keep in touch with their employer/supervisor during their leave.
Provide Medical Information: Employees must supply objective medical information upon request, so the employer has the necessary information to provide suitable accommodation.

Legal Framework for Accommodation in Ontario

The Ontario Human Rights Code requires employers to provide accommodation for employees. The goal is equal opportunities, access, and benefits in the workplace. This duty protects employees against discrimination based on disability, age, creed, sex, family status, and other protected grounds.

The Duty to Accommodate:

Employers must accommodate employees up to the point of undue hardship. To provide suitable accommodation, employers must have objective medical information from the treating practitioner(s) about the employee’s restrictions and abilities.

Undue hardship is determined based on:

Significant Cost that would essentially bankrupt the organization
Health and Safety Risk to the employee receiving accommodation or others
Availability of Funding from outside sources such as government, grants, insurance

Before claiming undue hardship, employers must demonstrate they have explored all reasonable solutions for accommodation.

Workplace Accommodation

Accommodation can include:

Modified job duties
Alternate suitable work
Adjusting work schedules
Providing assistive devices
Modifying the work location or work area

Effective communication and collaboration between employers and employees are essential for successful accommodation.

Individual Accommodation Plans

Each accommodation situation is unique and depends on factors such as:

Occupational vs. Non-Occupational Illness or Injury
Family Status Considerations
Availability of WSIB, Short-Term Disability, or Other Benefits

If you need support with accommodation and managing employee absence or return to work related to an injury or illness, contact the HR Solutions team at HRresults@w-u.on.ca .

New Long-Term Illness Leave - Effective June 19, 2025

Effective June 19, 2025, a new unpaid leave, Long-Term Illness Leave , has been introduced. This leave provides eligible employees with up to 27 weeks of leave within a 52-week period.

To be eligible, an employee must have completed at least 13 consecutive weeks of employment and meet the following two conditions:

The employee is unable to work due to a serious medical condition ; and
A qualified health practitioner has issued a certificate confirming the serious medical condition and indicating the expected duration of the employee’s absence.

Employees are required to provide written notice to their employer as soon as possible when planning to take a long-term illness leave.

Please note:

The 27 weeks of leave do not need to be taken consecutively.
The leave may be extended within the same 52-week period with an updated medical certificate, subject to the circumstances.
Depending on the situation, the employee may also qualify for other types of leave.

It is essential to maintain proper documentation when an employee is taking or returning from leave to ensure compliance and support effective management. If you have any questions or require assistance with managing an employee’s leave, please contact a member of our team.

Supervisor Sentenced to Five Years in Prison

A supervisor was recently sentenced to five years in prison for criminal negligence causing death. The Ontario Superior Court of Justice found that the supervisor’s failure to address reported safety concerns and take reasonable precautions to protect the worker was a marked departure from what a reasonable supervisor would do in the circumstances.

This is the harshest sentence to date for criminal negligence related to workplace health and safety.

It highlights the severe consequences of negligence, emphasizing that supervisors have a legal duty to prevent harm, regardless of whether workers make a formal complaint.

This court decision also reinforces the importance of due diligence and fulfilling the supervisor's duties under the Occupational Health and Safety Act. Click the link below to view the court case and the Ontario Superior Court of Justice decision: 2025 ONSC 845 (CanLII) | R v. Urgiles | CanLII

Ward & Uptigrove has developed a Supervisor Safety Series 1.0: Workplace Health & Safety Due Diligence for Supervisors to serve as a valuable resource to our clients, helping to educate front-line supervisors and managers. Remember, in many cases, you may be both the Employer and the Supervisor.

To learn more about our Supervisor Safety e-learning program : S upervisor Safety Series 1.0 - Ward & Uptigrove

Wealth Management Updates

The Importance of Financial Planning During Economic Uncertainty

Periods of economic uncertainty—like the one we’re facing today—can naturally lead to increased concern about personal finances. Volatile markets, inflationary pressures, geopolitical instability, and shifting interest rates all contribute to a sense of unpredictability. In times like these, having a well-structured financial plan in place can provide both clarity and a much-needed sense of reassurance.

While no one can predict short-term market movements, financial planning allows you to take a step back and look at the bigger picture. A good plan doesn’t rely on timing of market fluctuations. Instead, it’s built around your personal goals, your timeline, and your specific financial needs. More importantly, it can help ensure that you’re not put in a position where you're forced to sell investments during market downturns just to meet cash flow requirements.

Why Planning Matters in a Down Market

The foundation of any good financial plan is a clear understanding of your short-term and long-term goals, and how those goals translate into cash flow needs. For example, if you're retired and drawing income from your portfolio, or if you have an upcoming one-time expense like a home renovation or helping a family member financially, it’s important that these needs are accounted for and backed by appropriate investment choices.

When markets are rising, it can be easy to overlook the structure of your portfolio. But when markets decline, it becomes very apparent how critical it is to have a portion of your portfolio allocated to low-volatility, liquid assets that aren’t subject to sudden drops in value. These investments—often cash equivalents, short-term fixed income, or other stable instruments—can serve as a buffer during market downturns, giving your growth-oriented investments time to recover before being accessed.

Without this kind of structure in place, investors risk being forced to sell long-term growth assets like equities during a downturn—effectively locking in losses that may otherwise have been temporary.

A Plan That Aligns with Your Life

Financial planning is not a one-time event; it’s a living process that evolves with your life and your financial situation. A plan created five years ago might no longer reflect your current priorities, income sources, or obligations. That’s why periodic reviews are so important, especially during uncertain times.

Planning also fosters better decision-making. Rather than reacting emotionally to headlines or market movements, a financial plan gives you a rational framework for evaluating decisions. For many people, simply seeing the numbers—how long their assets are projected to last, what margin of safety is built in, and how short-term needs are protected—can bring a sense of calm and perspective.

Coordinating the Plan with the Portfolio

Financial planning and investment management are most effective when they’re working together. Your portfolio should reflect not just your ability or willingness to take on risk , but your actual cash flow needs—when you’ll need money and how much. That coordination allows for more tax-efficient withdrawals, better asset allocation decisions, and ultimately, more peace of mind.

At Ward & Uptigrove Wealth Management, we work closely with our related investment management company, TriCert Investment Counsel , to ensure financial planning and portfolio design are fully integrated. Proper portfolio construction is very important, and a personalized financial plan provides important information the portfolio manager can use to determine how the portfolio of that client should be built.

While the markets may feel uncertain, your financial future doesn’t have to be. A current, well-structured financial plan can provide the perspective and structure you need to stay focused on what truly matters: your goals, your lifestyle, and your long-term peace of mind.

If you’d like to learn more about financial planning or our approach to helping clients build and maintain a strong financial foundation, feel free to reach out to your Ward & Uptigrove accountant or connect directly with a Ward & Uptigrove Wealth Management advisor.

Health Care Spending Account vs. Group Benefits Plan: What's the Right Fit for Your Business?

As a business owner, offering health benefits is one of the most meaningful ways to attract and retain talent. But when it comes to choosing how to provide those benefits, the options can be confusing. Two of the most common solutions are Health Care Spending Accounts (HCSAs) and traditional Group Benefits Plans —and each comes with its own set of advantages and trade-offs.

Here’s a closer look at how they compare:

What is a Health Care Spending Account (HCSA)?

An HCSA is a flexible, employer-funded account that reimburses employees for eligible medical and dental expenses not covered by provincial health care. The business sets a fixed annual allowance for each employee, and employees choose how to use it.

Key Features:

Employer sets the annual dollar limit.
Covers a wide range of expenses (e.g. dental, vision, prescriptions, massage therapy, etc.).
No premiums—costs are only incurred when claims are submitted.
Can be used to top up a traditional group plan or offered as a standalone benefit.

What is a Group Benefits Plan?

A Group Benefits Plan is a more structured, insurance-based program that provides a defined set of benefits to employees—typically including health, dental, life, disability, and critical illness coverage.

Key Features:

Premiums are paid monthly by the employer (and sometimes employees).
Covers predefined services (e.g. 80% of prescriptions, 100% of basic dental, etc.).
Offers pooled risk—major costs like drug claims or disability can be covered by the insurer.
May include long-term security for employees with coverage for serious illness or disability.

Pros and Cons:

Which One is Right for Your Business?

HCSA may be a better fit if you:
Want predictable, controllable costs.
Have a smaller team or a workforce with diverse personal health needs.
Prefer simplicity and low administration.
Group Benefits may be a better fit if you:
Want to provide comprehensive coverage, including life and disability insurance.
Are competing for talent where group benefits are expected.
Have the capacity to manage the administrative and renewal processes

Final Thoughts

Many businesses find that a hybrid approach —offering a traditional group plan with an HCSA to top up coverage—strikes the right balance. Ultimately, the best choice depends on your workforce, budget, and long-term goals.

If you’re considering updating your benefits offering or want to explore which option might make the most sense for your team, we’d be happy to help you evaluate the possibilities.

Staff Updates

We are proud to congratulate the following staff members on their development and progression into new roles.

Agriculture Department

Progressions

Business Department

Progressions

Congratulations on your retirements!

Ryan Deyell, CPA, CA

Partner

After 25 years of service with Ward & Uptigrove, Ryan Deyell is retiring from the Partnership effective June 30, 2025.

Lee-Ann Tucker

Wealth Management Receptionist

After 28 years of service with Ward & Uptigrove, Lee-Ann Tucker is retiring from the Wealth Management department.

We are thankful to Ryan and Lee-Ann for their many years of contributions to Ward & Uptigrove, and wish them all the best.

Welcome!

We are thrilled to welcome the following new staff members to our team:

Have a Wonderful Summer

from the Partners and Staff of Ward & Uptigrove

CRA No Longer Sending Paper Mail To Businesses

2025-05-28T11:55:06Z

On February 6 ^th Ward & Uptigrove provided communication to clients regarding the CRA’s plan shift to online correspondence for all businesses in the spring of 2025. A formal announcement with further details was provided by CRA on May 12 ^th . This announcement means that all businesses will need to update their communication preferences either through their CRA My Account or by submitting the new Request to Activate Paper Mail form, further details on both are provided below.

These changes can have a significant impact on your business taxes, therefore we encourage clients to take time to read this letter as it provides important information.

Why is CRA Defaulting to Online Mail

CRA believes that online mail allows business owners to securely and conveniently receive CRA correspondence faster than paper mail. CRA also expresses the positive environmental impact of removing paper waste.

What do you need to know

Starting on May 12, 2025, online mail will be the default method of communication for all businesses either registering a new business number or creating a new specific program account for an existing business such as HST or Payroll.

For existing businesses and program accounts, these changes come into effect on June 16, 2025.

Existing businesses that do not have online access either through My Business Account or through their authorized representatives such as Ward & Uptigrove via the Represent a Client service may be exempt, however for many of our clients this will not be the case.

CRA will not send notifications to authorized representatives, as such Ward & Uptigrove will not be monitoring your CRA online mail.

How will this affect businesses

Any correspondence posted to your CRA My Account is considered received the moment it appears. If your email address is not up to date, you will not receive notifications. Therefore, to avoid missing critical correspondence you will need to check your CRA account at least every two weeks, more frequently if you’re under audit, review, or have other ongoing matters with the CRA.

Missing CRA correspondence could lead to significant consequences, such as interest, penalties, or large, unexpected tax assessments. For example, there are strict time frames the CRA provides for you to be able to provide information or object to an assessment – if these time frames lapse then you may be unable to object to the assessment. For businesses, efficient monitoring of the My Business Account portal will become an operational necessity starting in 2025 and will be an important responsibility for every business owner.

Updating CRA Notifications

Note: The RC681 does expire and will need to be resubmitted to CRA every two years. There will also be a transition period where businesses will only receive online correspondence until CRA can process the RC681 forms submitted. Therefore, it will be important to continue to monitor your online correspondence during this transition period.

Important Steps

Register for My Business Account if you haven’t already. How_to_Create_a_CRA_Account.pdf
If you wish to continue to have paper mail, you can either update your Profile through My Business Account or Submit Form RC681 – Request to Activate Paper Mail for Business. A fillable PDF version is available here:

o https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc681.html

Log into your My Business Account on a regular basis to ensure that you do not miss important correspondence from CRA
Update your email address with CRA under My Business Account and ensure that you are set up to receive notifications

To read the May 12 ^th CRA communication please visit: https://www.canada.ca/en/revenue-agency/services/e-services/digital-services-businesses/business-account/about-business-account/online-mail-for-business.html

Office Hours Update

2025-04-24T11:28:04Z

As we near the end of Tax Season, please note our office hours below:

Hours until April 29th

Mon, Tues, Weds, Fri: 8:30 am - 5:30 pm

Thursday: 8:30 am - 8:00 pm

Saturday: 9:00 am - 12:00 pm

Sunday: Closed

Hours on April 30th

8:30am – 5:00pm

Hours May 1st – May 2nd

Closed

Hours beginning May 6th

Monday – Thursday: 8:30am – 5:00pm

Friday: 8:30am – 4:30pm

Southwestern Ontario's Top Employer Award Winner

2025-02-05T19:39:17Z

We are thrilled to announce Ward & Uptigrove was selected as a recipient of the Southwestern Ontario's Top Employers Award for 2025.

The award is based on the following criteria:

1. Workplace,
2. Work Atmosphere and Social,
3. Health, Financial and Family Benefits,
4. Vacation and Time-Off,
5. Employee Communications,
6. Performance Management,
7. Training and Skills Development,
8. and Community Involvement!

Here are some of the reasons why Ward & Uptigrove was selected as one of Southwestern Ontario's Top Employers (2025):

Ward & Uptigrove increased its full-time workforce in Canada by over 13 per cent in the past year and lets everyone benefit in the company's success with profit-sharing -- the company also offers generous referral bonuses of up to $5,000 per successful candidate as an incentive for employees to recruit friends
Ward & Uptigrove hosts three major social events each year, giving employees the opportunity to unwind and connect with food, beverage and entertainment covered by the firm's partners -- events include a post-tax season party (employees plus a guest), a fall golf tournament, and an annual holiday celebration
Ward & Uptigrove matches employee donations in kind, and encourages them to lend a helping hand in the community with a paid day off to volunteer

Emily MacRobbie, Human Resources Manager at Ward & Uptigrove, says clients appreciate the close connections and sense of care their small-town environment fosters.

“We’re big enough to attract and retain some of the best and brightest minds in the industry, while simultaneously being small enough that staff and clients are known on a more personal level,” says MacRobbie. “Employees really appreciate the flexibility the firm offers, such as work location (in office or hybrid) and hours of work arrangements. We keep a pulse on what’s happening and make sure we remain competitive with things like paid time off and flexible health benefits.”

To learn more about career opportunities at Ward & Uptigrove visit www.wardanduptigrove.com/careers

2024 Year End Newsletter

2024-12-19T19:18:25Z

Accounting

Tax Updates

Agriculture Updates

Miscellaneous Updates

Human Resources Solutions

Wealth Management

Firm News

Please Note Our Holiday Shutdown

The offices of Ward & Uptigrove will be closed from 4:00 pm on Tuesday, December 24th and reopening in the New Year on Thursday, January 2nd.

GST/HST Holiday Tax Break

The Federal government recently announced a temporary measure to provide a two-month GST/HST break on a wide range of products, aimed at helping Canadians save on essential purchases. The GST/HST relief will be in effect from December 14, 2024 to February 15, 2025 and items eligible for the temporary GST/HST relief include the following items:

Most food and beverages, including takeout and dine-in meals, snack items and other prepared foods, as well as certain alcoholic and carbonated beverages
Children’s clothing, footwear, diapers and car seats
Children’s toys and games
Christmas and similar decorative trees
Video game consoles, controllers, and games
Jigsaw puzzles
Newspapers and printed books

For a full list of qualifying goods and services, please see the CRA site here

Additionally, to qualify for the GST/HST relief, both conditions will need to be met for qualifying goods:

All of the consideration is paid between December 14, 2024 and February 15, 2025
The goods are delivered or made available to the recipient during this period

Businesses that sell any goods or services that are exempt from GST/HST with the two-month holiday are still entitled to claim an input tax credit for the GST/HST paid on these expenses.

As well, businesses should be determining which goods they sell qualify for the relief and update their point-of-sales systems, along with monitoring delivery and payment dates to ensure the sales made qualify for the tax relief.

Capital Gain Updates

During the 2024 year, we saw significant proposed changes to the taxation of capital gains in Canada. To understand these changes, it is important to understand what a capital gain is. A capital gain is the growth in the value of capital property from the original tax cost. Assets that are generally considered capital property for income tax purposes include the following:

Share of a corporation
Real estate property
Goodwill (i.e. intangible value of a business)
Bonds and other similar investments

Proposed Increase to the Capital Gains Inclusion Rate

In the 2024 federal budget, held mid-April 2024, the federal government announced that they would be increasing the capital gains inclusion rate from 50% to 66.67%, effective for dispositions on or after June 25, 2024.

The last capital gains inclusion rate change occurred 24 years ago!

This rate change effectively increases the amount of tax payable on capital gains by 33.33%.

The proposed tax changes include a carve-out for individuals on the first $250,000 of capital gains. This carve-out means that on the first $250,000 of capital gains, the 50% inclusion rate will remain. This limit is per individual and per calendar year, with no proration for the 2024 year.

Proposed Increase to the Lifetime Capital Gains Exemption

As the name may suggest, dispositions of certain capital property may be exempt from income tax. The types of property that qualify for the lifetime capital gains exemption (“LCGE”) are qualifying farming and fishing property and shares of a qualified small business corporation. This exemption has a lifetime limit which the government changes from time to time.

Also included in the 2024 federal budget, the federal government announced that they would be increasing the lifetime capital gains exemption limit to $1,250,000 effective for dispositions on or after June 25, 2024.

With the proposed increase to the capital gains inclusion rate, tax savings when using the full $1,250,000 capital gains exemption could be over $446,000!

Proposed Introduction of the Canadian Entrepreneurs Incentive

Like the other proposed measures, the 2024 federal budget introduced the Canadian Entrepreneurs Incentive (“CEI”). This incentive will reduce the capital gains inclusion rate to 1/3 subject to annual and lifetime limits. See section below for more details .

Businesses specifically excluded from this incentive include professional practices, businesses that provide consulting services, financial services, real estate and property management services, rental businesses and developers, hotels foods and accommodation, and arts and entertainment.

The proposed rules currently set the maximum lifetime incentive available for the 2025 taxation year at $400,000 with increases of $400,000 per year until the lifetime limit reaches $2,000,000 in the year 2029.

In Ontario, this would lower the income tax rate on eligible capital gains from the top rate of 35.68% to 17.85%. The tax savings when using the full $2,000,000 lifetime limit is $356,800!

Capital Gains Rates for 2025

With all the recent proposed tax changes to the taxation of capital gains, there is even more variation on the effective tax rate on capital gains, as summarized in the chart below:

Federal Fall Economic Statement

On December 16, 2024, the federal government presented the Fall Economic Statement 2024. Some key highlights of the proposed measures are the following:

Accelerated Investment Incentive & Immediate Expensing

Proposes to reinstate the accelerated investment incentive (AII) and immediate expensing measures for qualifying property acquired on or after January 1, 2025 and that become available for use before 2030.

Regarding the AII measure, the government has proposed to increase the first-year CCA to three times the normal first-year deduction if the property is normally subject to the half-year rule, and one-and-a-half times the normal first-year deduction if the property is not normally subject to the half year rule.

Regarding the immediate expensing measure, it will be applicable only for manufacturing and processing machinery and equipment included in class 53, clean energy equipment included in class 43.1, and zero-emission vehicles included in classes 54, 55 and 56.

Canada Carbon Rebate for Small Businesses Changes

Proposes to change the design of the Canada Carbon Rebate program, effective for the 2024-25 and later fuel charge years. The proposal includes the following two changes to the calculation of the tax credit:

A minimum payment for eligible corporations with up to 20 employees; and
A phase-out for eligible corporations that have between 300 and 500 employees.

Also, proposes to expand the eligibility for the Canada Carbon Rebate rural supplement to individuals who reside in certain rural areas or small population centres, effective as of the 2024 taxation year.

Scientific Research and Experimental Development (SR&ED)

Proposes various enhancements to the SR&ED program and it indicated that further enhancements to the SR&ED program may be coming in the 2025 federal budget.

Other Announcements

Automatic personal tax filing – announced measures to simplify and automate individual tax filing in Canada, beginning as soon as the 2025 taxation year.
Reporting for non-profit organizations (NPOs) – proposes to require NPOs with total gross revenues exceeding $50,000 to file an annual information return, and requires NPOs that do not meet the $50,000 filing threshold to file a new, short-form return that contains basic information about the organization. These measures would apply for the 2026 and subsequent taxation years.

Updates on Previous Tax Measures

CRA Delays with Processing Ontario Tax Credits

Ontario corporations applying for tax credits including the Ontario Regional Opportunities Investment Tax Credit, as well as the Ontario Made Manufacturing Investment Tax Credit may be experiencing much longer than normal assessment processing times. The targeted processing time for corporate tax returns is normally six weeks. However, the CRA appears to have put a hold on processing such corporate returns that are claiming these Ontario tax credits. In certain instances, we have some clients that have been waiting for as long as a year.

The CRA has informed us that the primary cause for these delays is the high volume of returns applying for these credits. However, an interesting recent article posted by CBC may shed some light as to what could actually be behind the delays. The CRA has yet to provide an official response.

Ward & Uptigrove will continue to follow up with CRA, however, there is little that can be done to improve the processing time.

Canada Carbon Rebate for Small Businesses

In our summer 2024 newsletter, we provided details on the new Canada Carbon Rebate for Small Businesses. At that time, the date of when the CRA would pay these rebates was uncertain. The CRA has been paying these rebates during the month of December 2024. Also, although not law yet, recent announcements say the intention is for these rebates to be non-taxable. See section below for more details .

Proposed Reporting for Bare Trusts – Deferred

On October 29, 2024, the CRA announced that they will not require bare trusts to file a T3 Income Tax and Information Return (T3 return), including Schedule 15 (Beneficial Ownership Information for a Trust) for the 2024 tax year, unless the CRA makes a direct request for these filings. This was a continuation of the exemption from the trust reporting requirements that was issued for bare trusts for the 2023 tax year.

Short-Term Rental – Income Tax & HST Implications

There have been two significant developments regarding short-term rental arrangements, such as those on the Airbnb or Vrbo platforms:

1. On the income tax side, in the 2023 Fall Economic Statement, the federal government proposed to deny the deduction of expenses incurred in the year on non-compliant short-term rentals. The effective date for this measure is January 1, 2024, and as such this measure will impact 2024 personal income tax returns.

A non-compliant short-term rental is a residential property that is offered for rent for a period of less than 90 consecutive days that is either:

(a) Located in a province or municipality that does not permit the operation of a short-term rental; or

(b) Non-compliant with any of the registration, licensing, and permit requirements in the area in which the property is located.

To determine the amount of non-deductible expenses, you must first determine the portion of the year that your residential property is considered a non-compliant short-term rental. For the 2024 tax year only, as a transitional relief measure, if you are compliant with all the local registration, licensing and permit requirements on December 31, 2024, you will be deemed to be compliant for all of 2024.

2. On the GST/HST side, a Tax Court of Canada case found that the sale of a used condo unit was subject to GST/HST. This case involved a taxpayer that had rented the condo unit on long-term leases for approximately nine years before renting the property on short-term rentals for a period of 14 months after which time the unit was sold to an arm’s-length purchaser.

It will be interesting to see what actions the CRA takes after this case. Short-term rentals have gained in popularity over the last 5 years and it is unlikely many of these taxpayers have considered the GST/HST implications in operating these short-term rentals.

Tax Depreciation (Capital Cost Allowance) on Purpose-Built Rental Buildings

The 2024 federal budget proposed to increase the tax depreciation rate from the normal 4% to 10% for new eligible purpose-built rental projects that begin construction on or after April 16, 2024, and before January 1, 2031, and are available for use by January 11, 2036.

Canada Carbon Rebate for Small Businesses

Small businesses in Ontario will be receiving a carbon tax rebate to return a portion of federal fuel charges paid from 2019 to 2023. The rebate will be paid directly to eligible businesses, it does not need to be applied for. Businesses that are registered with direct deposit may have already received these payments, however; due to the Canada Post strike, cheques will be delayed for businesses that are not registered for direct deposit.

The rebate is available to all Canadian-controlled private corporations (CCPC’s) that have filed their 2023 tax return by July 15, 2024. Additionally, the rebate is only available to businesses with 499 or fewer employees in the calendar year.

The rebate amount is based on the number of employees in each calendar year, the rates in Ontario per employee are as follows:

2019 - $26

2020 - $68

2021 - $75

2022 - $86

2023 - $146

The Finance Minister recently announced that the Carbon Rebate payments for small businesses would be tax-free.

Click here for more information and for an estimator of payments that you may be eligible for.

Clean Technology Investment Tax Credit (ITC)

Earlier this year the Federal government introduced the Clean Technology ITC to encourage the adoption of clean energy technology. The credit applies to clean energy generation such as wind, water and solar equipment, geothermal energy, heat pumps, and non-road zero emission vehicles and charging equipment.

The ITC is a refundable tax credit of up to 30% of investments for eligible property acquired and available for use on or after March 28, 2023 and before 2035. The tax credit is available to Canadian corporations and is not available for individuals or partnerships.

To be eligible for the 30% tax credit rate, the company must meet certain labour requirements. Such requirements are generally met by paying covered workers in accordance with a collective agreement, or by paying amounts that similar workers would be paid under a collective agreement and making reasonable efforts to ensure that at least 10% of the labour performed in Red Seal trades is performed by registered apprentices.

Businesses that do not meet these labour requirements will be eligible for the tax credit at a reduced rate of 20%.

To be eligible for the Clean Technology ITC, the property must be new when acquired along with being situated and used exclusively in Canada. Additionally, it must be considered clean technology property, meaning that it is included in certain parts of Class 43.1, 43.2, or 56 of Schedule II of the Income Tax Regulations.

Important Changes to the AgriInvest Program

Starting with the 2025 AgriInvest program year there are two significant changes to the program:

New filing deadline – The deadline to file your 2025 AgriInvest program form T1163/Statement A will be June 30, 2026 (previously September 30).
Agri-environmental risk assessment – if your average annual net sales are $1 million or more for the previous 3 program years you must submit an eligible agri-environmental risk assessment to be eligible for the government matching deposit. Annual net sales are calculated by subtracting your gross purchases on your allowable commodities from your gross sales on your allowable commodities. The agri-environmental assessment must be valid at some point during your 2025 fiscal year. The valid agri-environmental assessment must be obtained before your 2025 fiscal year-end.

Once the agri-environmental risk assessment is in place, a declaration must be completed and submitted before making any matchable deposit. The declaration must be submitted each year that average allowable net sales is above $1 million unless the agri-environmental assessment is valid for more than one fiscal year.

The agri-environmental risk assessment identifies risks on farming operations and includes sustainability tools that support a producer in mitigating measures. The assessment gives producers direction on how to improve their farm’s health and safety, add value to their property, reduce costs and improve competitiveness.

The assessment evaluates:

Practices in soil and nutrient management
Crop and pest management
Water, biodiversity and land use
Handling and storage of farm inputs
Waste, by-products, and pollution
Energy efficiency
Livestock and feed management

AgriInvest has identified the following as eligible agri-environmental risk assessments:

Canadian Roundtable for Sustainable Beef (CRSB) Sustainable Beef Production Standard by a CSRB approved certification body
Certified Organic
Environmental Farm Plan
Nutrient Management Plans (such as manure management)
Nutrient Management Plans from 4R Designated or Certified Experts
Saskatchewan agri-environmental risk assessment
Plan agroenvironmental de fertilisation
Plan d’accompagnement agroenvironmental

Regional Opportunities Investment Tax Credit

The Ontario Regional Opportunities Investment Tax Credit decreased from 20% to 10% on January 1, 2024, with qualifying expenditures now eligible for up to a $45,000 refundable tax credit. This credit applies to the construction, renovation or acquisition of eligible commercial and industrial buildings in certain regions. For more information on this tax credit, who is eligible and qualifying regions please refer to this article here .

Tax Planning – Agriculture

Reviewing your operations estimated taxable income before your year-end date can allow for time to consider potential tax planning opportunities. If you expect your taxable income to be higher than prior years, consider discussing with your accountant the following tax planning opportunities to potentially reduce your tax liability:

Prepaid expenses - If you have the funds available, an effective way to defer taxes is to prepay for 2025 expenses prior to your year-end date. Examples of common prepayments are for crop inputs and livestock feed.

Asset purchases - Accelerated capital cost allowance is available for 2024. Asset purchases after December 31, 2023 can no longer be immediately expensed for tax purposes but the purchase could qualify for the Accelerated Investment Incentive (AII). Please refer to the article here .

Accounts payable – Pay invoices in 2024 rather than waiting until 2025. Paying as many expenses as possible before year-end will result in more deductible expenses for 2024 on a cash basis and will reduce your taxable income for the current year.

Holding inventory - Delay the sale of inventory (crops, livestock) until 2025. If you were planning on selling some inventory before year end but you do not need the cash flow until after year end, deferring the sale or collection on a sale can be an effective method to defer taxes.

Leasing vs. Buying Farm Equipment

Equipment is one of the most significant financial investments in your operation. When it comes to deciding whether to lease or buy a piece of equipment, it is important to understand the differences to effectively weigh the options.

Technology and Maintenance expenses

The increased efficiency a new tech piece of equipment can provide and the rising cost of repairs on older equipment are a couple of reasons why agriculture producers are considering leasing versus buying. Leasing a piece of equipment with updated technology could improve productivity without incurring significant expenses to keep existing equipment up to date.

Some lease agreements come with strict stipulations on how you can use the piece of equipment such as number of hours or kilometers. When you own the equipment, there are no contacts to adhere to. There may also be stipulations in the lease about maintenance being done and you may not have the ability to make any customized changes to the equipment.

On the flip side, although customizations may not be an option, the leasing company could cover the costs of repairs under a warranty. For pieces of equipment that require more maintenance than others, leasing can provide certainty in repairs expenses and reliability of equipment being in good condition when it is needed.

Timing

The short-term and long-term need for a specific piece of equipment is another consideration. If the piece of equipment is only needed for a short-term, leasing could be a viable option to reduce cash outflows as opposed to a purchase. Purchasing can often be more cost-effective over a longer term of ownership.

Equity

One advantage to buying farm equipment is that you own the asset, and this increases the equity in your business. A leased piece of equipment is not considered an asset of the business and does not increase equity.

Cashflows

Leasing generally results in a lower cash outflow initially and instead spreads the costs over the term of the lease. This can be beneficial when new or additional equipment is needed to boost the bottom line, but cash flow is tight. Or if cash for a down payment on an equipment purchase is not available, a lease typically does not require upfront down payments.

Tax considerations

The tax treatment for a lease is different compared to a purchase. The difference relates to the timing of tax deductions. With a lease, the full lease payment is deducted for tax. For an equipment purchase financed with a loan, the interest on the loan can be deducted and a specified percentage of capital cost allowance can be deducted as an expense each year. An analysis of the numbers can be helpful to determine the cash flow impact after taxes. A financed piece of equipment would usually result in greater tax deductions and savings in the years after purchase, where as a lease spreads the deductions over the term of the lease.

For HST purposes, some farm equipment is “zero-rated” which means no HST is paid on the purchase of farm equipment. However, if equipment is leased, HST is required to be charged on lease payments.

Each agricultural operation is unique and there is not a one size fits all answer to the lease versus buy decision. Several factors in addition to those listed above may also need to be considered to determine which option is best for your operation.

Canadian Entrepreneurs' Incentive

The 2024 federal budget, together with subsequent amendments, introduced the proposed Canadian Entrepreneurs’ Incentive (CEI). The CEI reduces the effective inclusion rate on capital gains realized on or after January 1, 2025 on the disposition of qualifying shares or qualified farm property by an eligible individual. The proposed 66.66% capital gains inclusion rate for post-June 24, 2024 dispositions would effectively be reduced by ½ to 33.33%.

This reduced inclusion rate would apply to gains not offset by the lifetime capital gains exemption. It also is in addition to the proposed reduced inclusion rate of 50% on the first $250,000 of capital gains.

Qualified farm property generally includes real property such as land or buildings that was primarily used in the course of carrying on a farming business in Canada usually by either the individual, a spouse, common-law partner, parent or child of the individual, family farm corporations or family farm partnerships.

There is a lifetime limit on gains eligible for this reduced rate, set at $400,000 commencing in 2025, and increasing by $400,000 annually until reaching a total of $2 million in 2029.

An example: If a farm was sold in 2025 for a gain of $2,000,000 and the taxpayer had their full lifetime capital gains exemption and no other capital gains in the year, then:

$1,250,000 of the gain may be sheltered from tax using their lifetime capital gains exemption;
$400,000 would be included in income at the effective CEI inclusion rate of 33.33%;
$250,000 would be included in income at the lower 50% inclusion rate (rather than the proposed 66.66% inclusion rate); and
$100,000 remaining would be included in income at the proposed 66.66% inclusion rate.

To be eligible for the CEI, several conditions would be required to be met including the following:

Qualifying property – The property being disposed of must be qualifying property including qualified farm or fishing property or qualified small business shares at the time of sale.
Ownership criteria – If the property is qualified small business shares being disposed of the individual must own at least 5% of the issued and outstanding shares with full voting rights. If the property being disposed of is Qualified Farm Property (QFP), the individual selling must own at least 5% of the total fair market value of the property. In both cases, the property must meet the 5% criteria for at least 24 continuous months, at any time since the shares were issued or the property was owned.
Engagement requirement – The individual disposing of the shares or property must have been actively engaged in the business on a “regular, continuous and substantial basis” for a total of at least three years.

The CEI has not yet received royal assent but is expected to become law. We will be tracking this proposed measure and provide updates in future newsletters as the measure goes through the legislative process.

Deadlines - AgriStability & AgriInvest

AgriStability: Deadlines for the 2024 program year

December 31, 2024: Apply for interim payment
December 31, 2024: Pay fee – final deadline (20% increase)
June 15, 2025: Submit T1163 (individuals)
June 30, 2025: Submit Statement A (corporations, trusts and special individuals)
June 30, 2025: Submit Year-end report and Claim form
June 30, 2025: Pay fee, submit New Participant Form or cancel coverage for 2024 AgriStability
December 31, 2025: Final deadline – Report your 2024 farm income to Canada Revenue Agency (corporations)

AgriInvest: Deadlines for the 2024 program year

September 30, 2025: For individual participation AgriInvest only, submit 2024 T1163 to Canada Revenue Agency.
September 30, 2025 : For corporations, trusts and special individuals’ participating in AgriInvest only, submit 2024 Statement A to Agricorp.
For the 2025 program year, the deadline has changed from September 30 to June 30. Please refer to the article here .

CRA MyAccount

In an effort to make registration easier, CRA has implemented an immediate identity verification option. A photo of your Canadian passport, driver’s license or provincial/territorial photo ID card can be used. Taxpayers not wishing to use this service can still verify their identity by receiving a security code through the mail.

New options have been added to MyAccount, taxpayers can now make an online request to:

Transfer available payments or installments within their own account
Request a refund of available payments or installments
Request payment tracing
Request a statement of account

Home Buyers Plan

Taxpayers can now withdrawal up to $60,000 through the Home Buyers Plan using their RRSP’s. Participants making a first withdrawal between January 1, 2022 and December 31, 2025 will also be able to defer the first repayment by an additional three years bringing the first required repayment to the fifth year following the first withdrawal. Early repayments are permitted and do not change the 15-year repayment period, they will reduce the minimum annual payment going forward.

The Home Buyers Plan can be used in conjunction with the First Home Savings Account as long as all conditions are met.

Workings Canadian Rebate

CRA announced a one-time tax free cost-of-living assistance payment of $250 to eligible individuals . Legislation has not been passed but is reported to be issued early Spring 2025. Eligible individuals are those who:

Worked in 2023
Earned up to $150,000 net income individually
Filed their 2023 tax return by December 31, 2024
Resident in Canada on March 31, 2025
Were not incarcerated for 90 days prior to April 1, 2025, and;
Were not deceased on April 1, 2025

Volunteer Firefighter/Search and Rescue Tax Credit

Non-refundable tax credits have been doubled, increasing to $6,000 starting in 2024. Taxpayers would be required to meet all criteria including having at least 200 hours of eligible services during the taxation year.

Canada Carbon Rebate for Individuals

Previously name the Climate Action Incentive, the rural supplement increase from 10% to 20% is in place again for the 2024 taxation year. The eligibility is reverting back to using 2016 Census data, so if taxpayers previously did not qualify using the 2021 Census data they may be eligible again.

Estate Planning - Select Items to Consider in your Will(s)

Choice of Estate Trustee

The person who will deal with your estate after you die is called an estate trustee (often also called executor).

Estate trustees have various responsibilities such as accounting for all your assets, applying for probate, looking after tax filings and distribution of estate assets.

In choosing an estate trustee, you may want to evaluate potential candidates based on the following criteria:

Trustworthiness
Organized, responsible and dependable
Financial knowledge
Residence, it can be easier if the estate trustee lives closer to be able to deal with your estate. If your estate trustee does not live in Canada, they might have to pay a bond
Likelihood to live longer than you
If you have a complicated estate, you may want to consider choosing a professional, such as a lawyer, accountant or trust company

Many people choose their spouse, family member, or friend to be their estate trustee. You should talk to the person you chose to make sure they agree to be your estate trustee before naming them in your will.

Dual Will Planning

Where you hold shares or loans of private corporations, a common probate planning strategy is to have two or dual wills. The first, often called primary will, consists of all your assets except those in your secondary will. The secondary will is generally comprised of all shares and loans in private corporations. The benefit of these dual wills is that probate fees may be avoided with assets listed in the secondary will.

Testamentary Trusts to Consider Creating in your Will

#1 Testamentary Spousal Trust

The most common situation we see is that on the death of the first spouse, all the assets are transferred to the surviving spouse. This transfer generally occurs on tax-deferred basis. However, if you have certain assets in your name that you eventually want to go to a particular person, such as your child, it may make sense to create a testamentary spousal trust in your will. A testamentary spousal trust would provide the same tax-deferred transfer; however, you would have more certainty on who will receive your particular assets once your spouse has also passed away.

Let us look at an example. Mr. A owns a particular capital property (Prop#1). Mr. A wants his son, Mr. B to eventually receive Prop#1 once he and Mrs. A have passed away. If Mr. A simple leaves Prop#1 to Mrs. A in his will, he would be relying on Mrs. A to transfer Prop#1 to his son, Mr. B. Mrs. A would have no obligation to transfer Prop#1 to Mr. B upon her death. If Mr. A wants certainty that Prop#1 would go to Mr. B upon the death of both Mr. and Mrs. A, Mr. A can create a testamentary spousal trust in his will.

#2 Henson Trust Planning

If you have a family member that has been diagnosed with a disability and you will be leaving significant funds for their care, a common plan is to set-up what is known as a Henson Trust in your will. A Henson Trust is a trust that provides the trustee with the absolute discretion to distribute income and capital from the trust to the beneficiary, thus making it invisible to government income support payments such as the Ontario Disability Support Program. There are various rules, requirements, limits and tax planning opportunities available.

Reporting Changes for Employees Regarding T4/T4A

This should have been reported on the following boxes:

Box 45 on all T4 slips
Box 015 on all T4A slips

When filling out the T4 or T4A, employers must select one of the following 5 codes to report the situation that applies to their employees:

Code 1 - No Access to any dental care insurance, or coverage of dental services of any kind
Code 2 - Access to any dental care insurance or coverage of dental services of any kind for on the employee
Code 3 - Access to any dental care insurance or coverage of dental services of any kind for employee, spouse and dependents
Code 4 - Access to any dental care insurance or coverage of dental services of any kind for only the employee and their spouse
Code 5 - Access to any dental care insurance or coverage of dental services of any kind for only the employee and dependents

Note - If the employee has access to dental care insurance or coverage and has chosen to decline it for any reason the employer CAN NOT report Code 1.

Legislative Updates

New Free Resource

Workplace Safety & Prevention Services is offering a free Health and Safety Orientation Handbook Generator for small businesses. If you are interested, follow the link: WSPS Safety Orientation Handbook

Be cautious that this is not a health and safety handbook but can be used as a starting point for small businesses. It is important for employers to customize their handbooks to align with their safety policies, ensure it meets all the legislative requirements based on their business and unique circumstances and provide training to staff.

If you are looking for an efficient method for employee training that meets legislative requirements, our team offers virtual programs that are engaging and support employer due diligence. Contact our Health and Safety Team for more information: HRresults@w-u.on.ca .

Emerging Leaders Development Program

Spring 2025 Program Schedule:

Thursday May 1 – In-person @ W&U (9-4)

Tuesday May 6 – virtual (9-12:30)

* optional Wednesday May 7 – virtual (9-12:30) * HR/HS 101

Thursday May 8 – virtual (9-12:30)

Tuesday May 13 – virtual (9-12:30)

Thursday May 15 – In-person @ W&U (9-4)

Government Funding

Student Work Placement Program Grant funded by the Government of Canada for Work-Integrated Learning (WIL).

What is WIL?

WIL is a model and process of curricular experiential education which formally and intentionally integrates a student’s academic studies within a workplace or practice setting.

Work Integrated learning opportunities that are eligible for Student Work Placement wage subsidies include, but are not limited to:

mentorship programs
co-op placements
practicums
applied research projects; and
internships

WIL experiences include an engaged partnership of at least: an academic institution, a host organization and a student. WIL can occur at the course or program level and includes the development of learning outcomes related to employability, personal agency and life-long learning.

Interested in learning more about this funding?

Join the Magnet’s Team for the Student Work Placement Program Information Sessions. Details are available on their website: Magnet Student Work Placement Program (swpprogram.ca)

Did you know that HRS provides regular updates regarding legislative changes via our LinkedIn page? Click here to follow us!

W&U Wealth Management Launches EstateKeeper®

Leave Memories, Not Mysteries.™

Organize, store, and share your legacy with Estatekeeper®

Proactive life planning

Imagine if tomorrow never comes—would your loved ones be equipped to handle your affairs? Do they know the whereabouts of crucial documents? Many individuals find themselves unprepared for life’s certainties. The lack of guidance and access to vital information could burden your family with numerous hours of effort and significant financial expense.

Wills, POA instructions, insurance policies, personal messages, and financial plans. These are only a sample of the information you can organize, store, and share with EstateKeeper®.

Don't postpone it to the final moments

When the inevitable occurs, EstateKeeper® assists your family, loved ones and advisors with access to vital information. EstateKeeper® guides you step-by-step in creating a single location to securely store and selectively share information with the appropriate individuals.

Securely organize, store, and share your vital

information with loved ones and professionals.

How does it work?

EstateKeeper® is your personal guide and secure virtual filing cabinet that will help you organize your legacy and be a resource for your loved ones. Store and share important financial and private information, securely and selectively.

How secure is it?

Every document or file that passes through EstateKeeper® is secured with bank-grade encryption. The platform utilizes the latest in security protocols and processes to ensure privacy and data security for your information when it’s stored and when it’s being shared.

How can I get access?

Clients of Ward & Uptigrove can utilize this service for free. To gain access to EstateKeeper and begin collaborating, contact Laura Long from the Ward & Uptigrove Wealth Management team at 519-291-4803 ext 2709 or LauraL@w-u.on.ca. From there, we will provide you with the resources you need to organize, store and share your legacy.

Get

 Access!

To gain access to EstateKeeper® and begin collaborating, contact Laura Long at 519-291-4803 ext. 2709 or email LauraL@w-u.on.ca.

Leave Memories, Not Mysteries.™ is a trademark of TriCert Investment Counsel Inc.

EstateKeeper® is a registered trademark of TriCert Investment Counsel Inc.

By the Numbers

Firm News

Staff Updates

As 2024 comes to a close, we reflect on our 66th year of growth and progression with our staff. We are proud to congratulate the following staff members on their development and progression into new roles.

Partner Announcement

Congratulations to Dan Benbow on his progression to a Partner position within the firm, taking the next steps along his leadership journey.

We look forward to seeing him continue to develop and progress within the firm, and we thank him for his ongoing contributions.

Agriculture Department

Progressions

Business Department

Progressions

HR Solutions

Progressions

Admin/Operations

Progressions

Congratulations on your retirements!

Rick Town

Wealth Management Advisor

After 26 years with Ward & Uptigrove, Rick Town is retiring from the Wealth Management department.

We are thankful for Rick's contributions to the firm over the years and wish him all the best in his retirement.

Annette Williamson

Bookkeeper/Payroll Administrator

Annette Williamson is retiring from the bookkeeping department.

We are thankful for Annette's contributions to the firm and wish her all the best in retirement.

Years of Service

Congratulations to the following staff members on reaching these career milestones. We thank you for your contributions and loyalty to the firm:

5 Years of Service

10 Years of Service

15 Years of Service

20 Years of Service

Welcome!

We are thrilled to welcome the following new staff members to our team since July:

Happy Holidays

from the Partners and Staff of Ward & Uptigrove

4 Programs & Incentives for First Time Home Buyers

2024-11-28T15:17:28Z

Buying your first home has never been so intimidating or expensive. The market is at an all time high, many homes are entertaining multiple offers, selling well over their asking price, and now, interest rates are beginning to rise.

If you’re looking to enter the market for the first time, you’re going to want to use every resource at your disposal, whether that’s government programs or professional guidance, or preferably both. Knowledge is power, so let’s discuss several incentives and programs available to help you reach your goals.

Available Programs

Home Buyer’s Plan
Home Buyer’s Amount
Land Transfer Tax Refund
First-Time Home Savings Account

First Time Home Buyer Definition

First, you need to clarify if you are, in fact, a First Time Home Buyer. In Canada, a First Time Home Buyer is someone who has not owned a home in the previous 4 years and has not occupied a home owned by their current spouse or common law partner. The only time this does not ring true is for the Land Transfer Tax Refund, but that will be explained further on in the article.

Home Buyer’s Plan

The Home Buyer’s Plan (HBP) allows people buying or building a home for the first time to borrow from their RRSP tax-free.

Eligibility:

You qualify as a First Time Home Buyer as per the definition in this article.
Must be home buyer’s Principal Residence
Must occupy the home within a year
Must be a Resident of Canada

Quick Facts:

Withdraw up to $60,000 from your RRSP, tax-free for the purpose of funding a first-time home purchase
If purchasing with another first-time home buyer, both can withdraw the same amount, for a total of $120,000 to be put towards a down payment.
Withdrawals must be made within 30 days of the closing date on your home.
Repayment must be made over 15 years, beginning by the second year after funds were withdrawn.
Minimum annual repayment of 1/15th the amount borrowed
If minimum payment is not met in any given year, the difference is added to your taxable income for the year.
Any repayments are not tax deductible

Home Buyer’s Amount

The Home Buyer’s Amount allows people to claim up to $5,000 for the purchasing a qualifying home.

Quick Facts:

Must submit a tax return
Eligible homebuyers may receive a tax credit of up to $1,500

Eligibility:

You or your spouse purchased a qualifying home.
You or spouse did not live in another home owned by you or spouse in previous 4 years.

Land Transfer Tax Refund

A Land Transfer Tax is payment for registering your property’s title under your name. You may be eligible for a refund on this payment.

Quick Facts:

Land Transfer tax is calculated based on the price of the property.
The Refund is a maximum of $4,000, which would cover a house purchase of approximately $368,000. For house purchases exceeding $368,000 you will be responsible for the remaining tax payable.
May apply for immediate refund at time of registration but must apply withing 18 months of registration.

Eligibility:

You must be at least 18 years of age
Must be occupied within 9 months of date of transfer
Cannot have ever owned a home or an interest in a home anywhere in the world
Your spouse cannot have owned a home or interest in a home while they were your spouse.
Cannot requalify for this program, unlike some other federal programs
The refund may be reduced if you are purchasing with someone who is not a first-time home buyer.
If you are married/common law and one spouse has previously owned a home but not while you were spouses, the eligible spouse can receive the full refund.
If you are not eligible spouses, and one person had previously owned a home, the eligible person can qualify for a portion of the refund, pro-rated to their share in the home.

First Home Savings Account

The First Home Savings Account (FHSA) is a proposed savings account that acts like an RRSP, specifically for those savings to purchase their first home.

Eligibility:

You qualify as a First Time Home Buyer as per the definition in this article.
Must be considered your principal residence within one year.

Quick Facts:

Contributions are tax deductible, like an RRSP.
Withdrawals, including investment income, are tax-free, like a TFSA - as long as the withdrawal is used to purchase a home.
Your maximum tax-deductible contribution will be $8,000 per year, lifetime max of $40,000.
Contribution room will start accruing upon account opening.
If money in the account is not used for 15 years, the account will be closed, and funds shifted to an RRSP or withdrawal on a taxable basis.

Conclusion

As you can see, there are several programs and incentives that offer help to a First Time Home Buyer. While the overall objective is to decrease the burden of upfront cost associated with buying a home, they all work differently and have varying eligibility requirements. In addition to doing your own research, you may want to consider working with a qualified professional.

If you are feeling a bit overwhelmed by all of the programs, check out the table below for a brief summary.

Have Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

Summer 2024 Newsletter

2024-06-27T13:11:45Z

Accounting

Tax Updates

Agriculture Updates

Miscellaneous Business Updates

Human Resources Solutions

Wealth Management

Firm News

Please Note Our Summer Hours

The offices of Ward & Uptigrove will close Fridays at 12:00pm from July 5 through to August 30, 2024

Increase to the Capital Gains Inclusion Rate – Federal Budget 2024

This measure has received the most publicity since its announcement in the Budget. Budget 2024 proposed to increase the inclusion rate for capital gains realized on or after June 25, 2024 from one-half to two-thirds.

For individual taxpayers, the first $250,000 of capital gains for a particular year will continue to have an inclusion rate of one-half.

Some other important notes on this measure:

For individual taxpayers, the $250,000 limit is an annual limit, not a cumulative limit
For individual taxpayers, the $250,000 is per taxpayer, not a family unit
For individual taxpayers, the $250,000 is not prorated for the short year in 2024

Draft legislation for this measure was released on June 9, 2024.

Up to June 24, 2024, Ward & Uptigrove worked with our clients to identify situations where it was advantageous to realize capital gains before the June 25, 2024 tax change.

On a go-forward basis, some strategies to consider include the following:

For individuals, where possible, planning to use the lifetime capital gains exemption (described below);
For personally held property, maximize the $250,000 annual limit by holding property jointly with your spouse (this would need to include beneficial ownership as well, not just title ownership);
For personally held property, maximize the $250,000 annual limit by selling fractional interests over multiple years; and
To access the $250,000 annual limit for individual taxpayers, corporate investments may be able to be moved to personal ownership in certain situations (for example, where a Company owes significant amounts to a shareholder).

Lastly, it is important to note that this change may now have a larger impact when a taxpayer dies, and capital property is not left to a spouse or common-law partner. In these situations, it is easier to exceed the $250,000 annual limit and thus this change may have a significant tax consequence.

Increase to the Lifetime Capital Gains Exemption (“LCGE”) – Federal Budget 2024

Where an individual taxpayer sells qualified small business corporation shares (i.e. active operating businesses that operate through a corporation and that meet certain tests) or qualified farm property, the individual may be eligible to claim the LCGE.

The benefit of the LCGE is that, similar to the principal residence exemption, capital gains taxation can be avoided (within limits) if certain requirements are met and subject to other considerations such as alternative minimum tax and impact to income tested benefits.

The amount of the LCGE is $1,016,836 in 2024 and is indexed to inflation. The Budget proposes to increase the LCGE to $1,250,000 (increase of $233,164) for dispositions that occur on or after June 25, 2024. Indexing of the LCGE will resume in 2026.

With the proposed increase to the capital gains inclusion rate, the tax savings from the LCGE has also increased. At the full $1,250,000, tax savings are approximately $446,000 in Ontario for a top rate taxpayer (excluding Ontario surtaxes and alternative minimum tax considerations).

As such, where applicable, it will be even more important to ensure your business is structured in such a way that you can access the LCGE on the eventual sale of your business.

Carbon Tax Rebate for Canadian-Controlled Private Corporations (“CCPC”) – Federal Budget 2024

What is it?

The official name for this proposed measure is the “Canada Carbon Rebate for Small Businesses”. The “small business” reference appears to be based on the number of employees of a business – being 499 or less.

The objective of this rebate is to return a portion of fuel charge proceeds from a province to eligible businesses, as outlined below. Ontario is one of the designated provinces for this rebate.

Who is eligible?

To be eligible for the retroactive payment with respect to the 2019-2020 to 2023-2024 fuel charge years, (a fuel charge year runs from April 1 to March 31), a CCPC must:

Have employed one or more persons in a designated province in the calendar year in which the fuel charge year begins
Have had 499 or fewer employees throughout Canada in that calendar year
File a tax return for its year ending in 2023 no later than July 15, 2024

CCPCs do not have to apply for this rebate. Once the Minister of Finance has specified the payment rates for each designated province for the applicable fuel charge year, the CRA will calculate and automatically issue the rebate amounts to eligible CCPCs.

How the rebate will be calculated?

The rebate amount will be equal to the number of persons employed by the eligible CCCPs in a designated province in that calendar year, multiplied by a payment rate specified by the Minister of Finance for the designated province for the corresponding fuel charge year.

Further CRA Comments

The CRA last updated its website for this rebate on June 21, 2024 with the following statements:

• “We will not be able to provide estimated rebate amounts until the Minister of Finance sets these payment rates

• In addition, it is too early to determine the exact distribution date. We will provide updates on the timeliness in the coming months”

Ontario Made Manufacturing Investment Tax Credit (“OMMITC”) – Ontario Budget 2023

What is it?

The OMMITC is a 10% refundable corporate income tax credit for eligible corporations (defined below) on qualifying investments (also defined below) in buildings, machinery and equipment for use in manufacturing or processing in the province of Ontario. The stated policy objective for this credit is “to help local manufacturers lower their costs, invest in workers, innovate and become more competitive.”

Who is eligible?

An eligible corporation must meet the following three requirements:

• It is a Canadian-controlled private corporation throughout the taxation year

• It is not exempt from Ontario corporate income tax for the taxation year

• It carries on a business in Ontario in the taxation year through a physical permanent establishment in Ontario (such as an office, a factory or a workplace)

What investments qualify?

Property that is included in the following capital cost allowance classes:

Class 1: Buildings acquired, constructed or, renovated and used for manufacturing or processing in Ontario that become available for use on or after March 23, 2023 and that are eligible for the additional 6% capital cost allowance. In order to qualify for this additional 6% rate, at least 90% of the floor space of the building must be used in manufacturing and processing and the building must have been acquired after March 18, 2007.

Class 53: For machinery and equipment to be used in the manufacturing or processing of goods in Ontario that are acquired and become available for use on or after March 23, 2023. For property acquired after 2025, qualifying investments will be property described in paragraph (a) of Class 43.

How the tax credit is calculated?

The tax credit for a taxation year is 10% of eligible expenditures for qualifying investments, up to a maximum of $2 million. The qualifying expenditures have a limit of $20 million in a tax year that is prorated for short taxation years and is shared among associated group of corporations.

How to claim the credit?

An eligible corporation can claim the credit for qualified investments acquired during a particular taxation year by completing Schedule 572, Ontario Made Manufacturing Investment Tax Credit, with its corporate income tax returns for such taxation year.

W&U comments

Schedule 572, and therefore the ability to claim the credit, only became available on May 21, 2024. During summer 2024, Ward & Uptigrove will be reviewing the 2023 and 2024 corporate income tax returns for our clients to identify clients that may have been eligible for this credit. In those situations, we will be amending the applicable corporate income tax returns to claim the credit.

Furthermore, there is the opportunity to combine the OMMITC with the Ontario Regional Opportunities Investments Tax Credit that we have covered in prior newsletters.

Capital Gains Inclusion Rate and Lifetime Capital Gains Exemption Changes

Please refer to the article in the tax section of our newsletter for information here . Navigating how the budget changes could affect your operations is specific to your situation. To discuss impacts on your operation, please contact your accountant.

Special Provisions for Financial Difficulties Cost-Share Program

Businesses often go through ups and downs, experiencing financial difficulty and making business even more challenging. Many farm operations are facing increased interest rates on renewal and increasing input prices. The special provisions for financial difficulties cost-share program delivered by the Ontario Soil and Crop Improvement Association (OSCIA) under the Sustainable Canadian Agricultural Partnership provides funding to Ontario farmers to complete a farm financial analysis. In order to be eligible for the funding, the farmer must show documentation of farm operation financial difficulty. Additional information on the program can be found here .

Program and Tax Credit Updates

Poultry and Egg On-Farm Investment Program (PEFIP) is a 10-year program (ending March 31, 2031) to help supply-managed poultry and egg producers adapt to market changes resulting from the implementation of international trade agreements. Additional information can be found here. If you require assistance with the registration process or a project application, please contact your accountant.
ACC loans – the interest free limit of the Advance Payments Program has been set at $250,000 for the 2024 program year. Further information on the Advance Payments Program and other loan programs offered by ACC can be found here or contact your accountant.
Return fuel charge proceeds to Farmers tax credit – the 2023 payment rate is set at $1.86 (2022 - $1.73) per $1,000 in eligible farming expenses. The 2024 rate has not yet been announced.
Regional Opportunities Investment Tax Credit (ROITC) temporary increase in the rate (from 10% to 20%) for qualifying expenditures ended December 31, 2023. ROITC claims are now calculated at 10%. This credit applies to the construction, renovation or acquisition of eligible commercial and industrial buildings in certain regions.

CRA Key Interest Rates

The rise in interest rates has resulted in the Canada Revenue Agency (CRA) increasing the following interest rates:

The interest rate on overdue taxes is currently 10%
The interest rate used to calculate taxable benefits to employees and shareholders from interest free and low-interest loans is currently 6%

It is important to note that the interest the CRA charges is not tax deductible, making the interest more punitive. To avoid interest charges, you must pay all amounts owing on time, including instalments to the CRA.

HST New Housing Rebates

GST/HST New housing rebates allow individuals to recover some of the HST paid on purchasing, building or substantially renovating a house. There are separate rebate applications dependent on the intended use of the home; whether the buyer will be living in the home or renting to tenants. In addition, there are several application types which consider the structure of the purchase. Determining which application applies to your situation can require some analysis to ensure the correct application is completed. If you are currently building a home or considering building a home as an individual, a partnership or a corporation, reach out to your accountant to discuss your situation and eligibility for the rebate.

GST/HST Electronic Filing Requirement

For reporting periods that start in 2024, registrants are required to file returns electronically with the exception of charities and some select financial institutions. CRA will levy a penalty of $100 for a first offense of non-electronic filing and $250 for each subsequent return not electronically filed. This penalty will apply even if the return is a nil return or in a refund position. As a transition measure – CRA is waiving penalties for filing periods beginning on or after January 1, 2024 and before April 1, 2024.

Registrants are encouraged to use the options available to them:

MyBusiness Account , registration requires a CRA security code to be mailed which can take up to 10 days to receive;
NETFILE , requires user to have an access code or access to a previously filed HST return;
TELEFILE , cannot be used for complex HST returns and requires an access code;
Financial Institutions, most banks offer filing and payment options for business taxes;
Authorized Representative, if Ward & Uptigrove is authorized on your CRA account, we can file HST returns on behalf of registrants.

Please reach out to your accountant if you have concerns to find the best solution for your business.

WSIB Electronic Filing Requirement

Similarly, WSIB has required electronic filing for reporting premiums. Employers are encouraged to use the options available to them:

Online Services , can be set up quickly;
MyBusiness Account , registration requires a CRA security code to be mailed which can take up to 10 days to receive;
Financial Institution, most banks offer filing and payment options for employers;

If electronic filing is not an option for you, contact WSIB directly to request an exemption.

HR Updates

HR & Health & Safety Legislative Updates

Did you know that HRS provides regular updates regarding legislative changes via our LinkedIn page? Click here to follow us!

Unlocking HR Resources for Canadian Agriculture Businesses

Agriculture businesses play a crucial role in feeding our nation and sustaining our rural communities. We know managing human resources can be challenging, especially for small and medium sized farms. Fortunately, there are valuable FREE resources available to support agricultural employers across Canada and specifically in Ontario.

Some resources include:

University of Guelph Foundations in Agricultural Management
Offered online, this management course includes eight (8) modules and is specifically for the agriculture industry. Module four (4) is specifically related to HR, titled “Managing Your Most Valuable Asset - Your People”.
Municipality of North Perth Agricultural Labour Resources
The Municipality of North Perth has posted a list of links to resources for both Employers and Employees. These include a guide to the Occupational Health and Safety Act for Farming Operations, Agriculture Employees Protection Act as well as the Ontario Federation of Agriculture’s Farm and Labour Safety article, to name a few.
Many of these can be accessed for free, with the exception of a few.
WSPS New Free Agriculture Safety Resources
WSPS has made new resources in four (4) different languages that cover common hazards in the agriculture sector. These include mobile friendly videos and infographics in Spanish, Thai, Vietnamese and English, covering ladders and heights, safely working with machines and safely working with tractors.
They have also created a poster that can be posted in the workplace, giving employees easy access to these videos through a QR code. Click here for the poster .
ESA Agricultural Employees
The Ontario Guide to the Employment Standards Act (ESA) is a website that provides an overview of the ESA and detail on the different rules and standards that apply.
Click here for the ESA Agriculture Employees poster. This poster is to be provided to employees and posted in the workplace.

Emerging Leaders Development Program – Fall 2024 Dates

Monday September 16 – In-person @ W&U 9:00-4:00 pm
Thursday September 19 – virtual via Zoom 9:00 – 12:30 pm * optional Human Resources 101
Monday September 23 – virtual via Zoom 9:00 – 12:30 pm * optional Health & Safety 101
Thursday September 26 – virtual via Zoom 9:00 – 12:30 pm
Monday September 30 – In-person @ W&U 9:00 – 4:00 pm

Learn more about the program and take advantage of the early bird pricing here .

Wealth Management Updates

Navigating the Canadian Housing Market: A Path to Homeownership with the First Home Savings Account

Buying a house in Canada has become increasingly challenging in recent years. Skyrocketing real estate prices, higher interest rates and more stringent mortgage rules have made it difficult for many Canadians to afford their first home. In this landscape, saving for a down payment can seem like a daunting, if not impossible, task. However, the introduction of the First Home Savings Account (FHSA) offers a glimmer of hope for prospective homebuyers.

Advantages of the First Home Savings Account

The FHSA is designed to help Canadians save for their first home more effectively. Here are some key benefits:

Tax-Deferred Growth: Contributions to an FHSA grow tax-free, similar to a TFSA. This allows savings to accumulate more quickly without the drag of taxes on investment income.
Tax-Deductible Contributions: Contributions are tax-deductible, much like an RRSP. This can provide immediate tax relief, reducing your taxable income for the year you contribute.
Tax-Free Withdrawals: Withdrawals from an FHSA are tax-free when used for purchasing a first home. This ensures that the entire amount saved can go towards your down payment.

Rules and Regulations

Understanding the rules governing the FHSA is crucial to maximizing its benefits:

Eligibility: To open an FHSA, you must be a Canadian resident, at least 18 years old, and a first-time homebuyer.
Contribution Limit: There is an annual contribution limit of $8,000, and a lifetime limit of $40,000, which allows for structured and substantial savings.
Account Duration: Funds can remain in the FHSA for 15 years, after which they must be withdrawn or transferred to an RRSP or RRIF if not used for purchasing a home.
Accrual of Contribution Room: Contribution rooms begins accruing when you open your account. By opening your account today, you will start accruing contribution room, even if you don’t plan on contributing this year. Next year, you could contribute $16,000.

An Opportunity for Parental Assistance

The FHSA also presents a valuable opportunity for parents looking to help their children achieve the dream of homeownership. Parents can gift children the money to make their annual contributions without any tax implications. This can significantly boost the savings rate and make the prospect of buying a home more attainable. With the combined efforts of personal savings and parental contributions, accumulating a sufficient down payment becomes a more realistic goal.

Setting Up an FHSA at Ward & Uptigrove Wealth Management

At our firm, we make it easy to set up an FHSA. Our experienced advisors can guide you through the process, ensuring that you understand all the benefits and rules associated with the account. We provide personalized advice tailored to your financial situation, helping you to make the most of this opportunity. Whether you're looking to open an account for yourself or contribute to your child's future home purchase, we are here to assist every step of the way.

While buying a home in Canada may seem out of reach for many, the First Home Savings Account provides a practical solution to overcoming this financial hurdle. By taking advantage of the FHSA’s benefits and utilizing strategic savings plans, homeownership can become a more attainable goal for Canadians. Contact us today to learn more about how you can get started on your path to owning your first home.

Ward & Uptigrove Wealth Management Partners with SPM Benefits

Ward & Uptigrove Wealth Management has recently partnered with SPM Benefits, a firm with over 20 years of expertise in the group benefits & retirement business.

Together we are able to provide solutions for:

Small to medium size businesses
Group Benefits: various funding & risk arrangements, Health care spending accounts
Group Retirement benefits: RRSP/DPSP/RPP/TFSA or a combination
All types of businesses & structures including sole proprietor, family owned & multi-corporation
Customized and niche providers

If you are a business owner interested in learning more about providing group health & retirement benefits to your employees or having a complementary audit of your existing benefits plan, please contact Laura Long, CFP at 519-291-4803 ext. 2709 or email LauraL@w-u.on.ca

We are excited to be able to provide this additional service offering to our clients.

Need Help? Contact a Ward & Uptigrove Wealth Management Representative.

519-291-3040 or email info@w-u.on.ca .

Staff Updates

We are proud to congratulate the following staff members on their development and progression into new roles.

Agriculture Department

Progressions

Business Department

Progressions

Welcome!

We are thrilled to welcome the following new staff members to our team:

Have a Wonderful Summer

from the Partners and Staff of Ward & Uptigrove

Corporate Succession Planning and Estate Equalization

2024-06-19T17:43:12Z

When contemplating the next steps for your corporate ownership and succession planning, maintaining fairness among family members is often a main priority even though all families members may not be involved in the business. One crucial aspect often overlooked is estate equalization, particularly in family-owned or closely-held businesses. Unequal distributions of wealth can lead to the business being forced to sell necessary business assets, jeopardizing the future viability of the core operations and business altogether. However, with strategic planning and the implementation of corporate life insurance, businesses can ensure equitable outcomes while safeguarding ongoing business sustainability.

Understanding Estate Equalization

Estate equalization refers to the process of balancing inheritances among heirs, particularly when certain assets, such as business interests, are illiquid or disproportionately valuable. In the context of corporate ownership, ensuring fair vs equitable distributions becomes more complex due to the interplay of family dynamics, business operations, sweat equity and financial considerations. Without proper planning, disparities in inheritances can cause families disputes and undermine the integrity of the business.

Challenges in Corporate Succession

Corporate succession planning presents unique challenges, especially when multiple family members or stakeholders are involved. While one heir may actively participate in the business's management, others might not possess the same level of involvement or interest. Disparities in inheritances can arise when valuable business assets are bequeathed to heirs based on their roles within the company, potentially leading to resentment and conflicts.

The Role of Corporate Life Insurance

Corporate life insurance emerges as a powerful tool for mitigating these challenges and ensuring estate equalization. By leveraging life insurance policies, businesses can create a financial mechanism to create fairness from inheritances effectively.

This can be a very challenging exercise in the sense that ‘fair’ and ‘equal’ have a very different meaning and context. For example: if there are multiple siblings within a family and one is working for the family business, whereas the other siblings do not, poses many challenges around succession planning and estate fairness. The sibling working for the business might assume a sweat equity component with the business solely being inherited by one or multiple siblings, whereas the other siblings may or may not assume an inheritance of the same value of the business' fair market value. This can lead to significant financial strain on the business tying up cash flows and potentially assets to be sold in order to meet the estate equalization needs if not planned properly.

Buy-Sell Agreements: With the assistance of legal and financial advisors, the company establishes buy-sell agreements among shareholders. These agreements outline the terms and conditions for the purchase and sale of shares upon predefined triggering events, such as the death of a shareholder.
Funding Mechanism: Corporate life insurance policies are acquired on the lives of key shareholders or owners. In the event of their death, the proceeds from these policies are utilized to fund the buy-sell agreements, enabling the surviving shareholders to purchase the deceased's shares at a fair market value.
Equitable Distribution: The proceeds from the life insurance policies facilitate the equitable distribution of wealth among heirs. Those not actively involved in the business receive their fair share of the estate, while those continuing the business retain ownership and control.

Benefits and Considerations

Implementing corporate life insurance for estate equalization offers several benefits:

Fairness and Stability: By ensuring fair distributions (it may not be equal to the business valuation), businesses foster harmony and stability among family members and stakeholders.
Continuity and Viability: Smooth transitions of ownership prevent disruptions to business operations, preserving continuity and long-term viability.
Liquidity Management: Life insurance provides liquidity precisely when it's needed most, enabling seamless transfers of ownership without jeopardizing the company's financial health.
Tax Advantages
The policy premiums are funded and paid by the corporation. Note – the premiums are not tax deductible.
The corporate life insurance death benefit over the cost basis of the policy can be paid as a tax-free capital dividend upon death.

It is also essential to consider various factors such as liquidity and access to the funds, premium affordability, and changes in business dynamics over time. Regular reviews and updates to the estate plan and insurance policies are necessary to adapt to evolving circumstances and regulatory changes.

Overall, there are tax benefits of owning corporate life insurance to manage succession planning, and estate equalization stands as a cornerstone for maintaining fairness and stability. Corporate life insurance emerges as a robust solution, offering a strategic framework to balance inheritances while ensuring the continuity and viability of the business. By embracing this approach and leveraging the expertise of financial and legal professionals, businesses can navigate the complexities of estate planning with confidence, securing a prosperous future for generations to come.

There are many different options and features available when looking into corporate life insurance. Contact our Wealth Management team to explore custom solutions and options to assess the implications specific to your circumstances.

Next Steps

Contact a Ward & Uptigrove Wealth Management representative at 519-291-3040 or email info@w-u.on.ca to learn more.

2024 Federal Budget Commentary

2024-04-17T14:38:44Z

On April 16, 2024, the Deputy Prime Minister and Finance Minister, the Honourable Chrystia Freeland, presented Budget 2024 – Fairness for Every Generation , to the House of Commons.

No changes were made to personal or corporate tax rates.

Some highlights include:

A. Personal Measures

Increase to the capital gains inclusion rate to 2/3, however individuals will retain the 1/2 inclusion rate on the first $250,000 of capital gains annually.
Increase to the lifetime maximum capital gains exemption, and two new incentives on specific types of business sales.
Modifications to the proposed amendments to focus the alternative minimum tax regime on high-income individuals.

B. Business Measures

Canada carbon rebate for small businesses that will begin by delivering payments to eligible CCPCs for five years of carbon tax.
Accelerated capital cost allowance on purpose-built residential rental properties.
Immediate expensing of certain productivity-enhancing assets, including computer hardware, acquired on or after April 16, 2024.

C. International Measures

Crypto-asset reporting framework that will require annual reporting by crypto-asset service providers on their clients’ activities using these assets.

D. Sales and Excise Measures

Extension of the GST exemption for new purpose-built rental housing projects to not-for-profit universities, public colleges and school authorities.

E. Other Measures

Details on the Canada disability benefit intended to commence in July 2025.

F. Previously Announced Measures

Intention to proceed with previously announced measures, including the denial of expenses for non-compliant short-term rental activities; the exemption of certain services of psychotherapists and counselling therapists from GST/HST; proposals related to the underused housing tax; temporarily pausing the fuel charge on heating oil; various clean energy tax credits; and other initiatives related to the clean economy.

A. Personal Measures

Capital Gains Inclusion Rate

Currently, one half of capital gains are included in a taxpayer’s income. Budget 2024 proposed to increase this inclusion rate to two thirds of the actual gain, effective for capital gains realized on or after June 25, 2024. Similarly, the deduction available for some employee stock option benefits will be reduced from one half to one third of the benefit. This adjustment to the inclusion rate will also apply to capital losses applied to offset capital gains.

Only half of the first $250,000 of capital gains (net of gains offset by capital losses, the lifetime capital gains exemption and the proposed employee ownership trust exemption and Canadian entrepreneurs’ incentive) realized by an individual will be included in their income each year. Two thirds of capital gains in excess of this amount will be included in their income. Other taxpayers, such as trusts and corporations, will be required to include two thirds of all capital gains realized on or after June 25, 2024 as income.

For taxation years that straddle June 25, 2024 (calendar 2024 for individuals), capital gains will be segregated between gains realized on or before June 24, 2024 (one half included in income) and gains realized on or after June 25, 2024 (two thirds will be income). For individuals, only half of the first $250,000 realized on or after June 25, 2024 will be included in their income.

Budget 2024 estimated that this change will impact only 0.13% of individual taxpayers and 12.6% of corporations.

Lifetime Capital Gains Exemption

Individuals are eligible to offset up to $1,016,836 (2024; indexed for inflation annually) of capital gains on qualified small business corporation shares and qualified farm or fishing property. Budget 2024 proposed to increase this lifetime limit to $1,250,000 for dispositions taking place on or after June 25, 2024. This amount would be indexed for inflation commencing in 2026.

Canadian Entrepreneurs’ Incentive

Budget 2024 proposed to reduce the capital gains inclusion rate on capital gains realized on the disposition of qualifying shares by an eligible individual. The inclusion rate would be halved, resulting in one third of such gains being taxable under the inclusion rates proposed in Budget 2024. This reduced inclusion rate would apply to gains not offset by the lifetime capital gains exemption.

There would be a lifetime limit on gains eligible for this reduced rate, set at $200,000 commencing in 2025, and increasing by $200,000 annually until reaching a total of $2 million in 2034.

To be eligible for this reduced inclusion rate, several conditions would be required to be met, including the following:

the shares were directly owned by the taxpayer at the time of sale;
the shares meet the asset tests required to be qualified small business corporation shares (generally, at the time of sale, all or substantially all assets were used in an active business carried on in Canada, and throughout the 24 months preceding the sale, more than 50% of the assets were so used);
the taxpayer was a founding investor at the time the corporation was initially capitalized;
the shares were held by the taxpayer for a minimum of five years prior to the sale;
at all times from the initial share subscription until immediately before the sale, the taxpayer directly owned shares accounting for more than 10% of the votes and 10% of the fair market value of the corporation;
throughout the five years immediately preceding the sale, the taxpayer was actively engaged on a regular, continuous and substantial basis in the activities of the business; and
the shares were acquired for fair market value consideration.

This incentive would not be available where the shares sold represented a direct or indirect interest in any of the following types of corporations:

a professional corporation (that is, a corporation that carries on the professional practice of an accountant, dentist, lawyer, medical doctor, veterinarian or chiropractor);
a corporation whose principal asset is the reputation or skill of one or more employees;
a corporation that carries on a business operating in the financial, insurance, real estate, food and accommodation, arts, recreation or entertainment sector; or
a corporation providing consulting or personal care services.

Employee Ownership Trust (EOT) Tax Exemption

Last year, Budget 2023 proposed tax rules to facilitate the creation of EOTs. An EOT is a form of employee ownership where a trust holds shares of a corporation for the benefit of the corporation’s employees. EOTs can be used to facilitate the acquisition by employees of their employer’s business, without requiring them to pay directly to acquire shares. These proposed rules are currently before Parliament in Bill C-59.

The 2023 Fall Economic Statement proposed to exempt the first $10 million in capital gains realized on certain sales of a business to an EOT from taxation. Budget 2024 provided further details on this proposed $10 million exemption.

The exemption would be available in respect of capital gains realized by an individual (whether directly, as a beneficiary of a trust, or as a partner in a partnership) on the sale of shares to an EOT where the following conditions are met:

the corporation is not a professional corporation;
the sale is a qualifying business transfer (QBT; meeting several requirements in the proposed rules for EOTs discussed below);
the trust acquiring the shares is not already an EOT or a similar trust with employee beneficiaries;
throughout the 24 months immediately prior to the QBT (the holding period), the shares were owned by the individual, a related person or a partnership in which the individual is a partner;
throughout the holding period, over 50% of the fair market value of the corporation’s assets were used principally in an active business;
at any time prior to the QBT, the taxpayer, or their spouse or common-law partner, was actively engaged in the qualifying business on a regular and continuous basis for a minimum period of 24 months;
immediately after the QBT, at least 90% of the beneficiaries of the EOT were resident in Canada; and
no disqualifying event (see below) occurs within 36 months of the QBT.

If the above conditions are satisfied, an exemption for up to $10 million in capital gains from the QBT would be available. If multiple individuals disposed of shares to an EOT as part of a QBT and met the conditions described above, they would be required to share the $10 million exemption. The taxpayers would be required to agree on how to allocate the exemption.

The exemption would be available for dispositions that occur between January 1, 2024 and December 31, 2026.

Qualifying business transfer (QBT)

The rules proposed in Budget 2023 require both the EOTs themselves and the QBTs by which they acquire businesses to meet numerous complex requirements. These subsections describe the general rules that would apply to EOTs.

A QBT would occur when a taxpayer disposes of shares of a qualifying business for proceeds that do not exceed fair market value. The shares must be disposed of to either a trust that qualifies as an EOT immediately after the sale or a corporation owned 100% by the EOT. The EOT must own a controlling interest in the qualifying business immediately after the qualifying business transfer. At the time of transfer, all or substantially all of the fair market value of the qualifying business’s assets must be attributable to assets used in an active business carried on in Canada. The business cannot be carried on through a partnership.

A qualifying business would be required to be a Canadian-controlled private corporation. No more than 40% of the corporation’s directors can be individuals that were significant owners of the qualifying business prior to the QBT, or were related to, or otherwise not dealing at arm’s length with, such owners.

Employee ownership trusts (EOT)

To be an EOT, a trust would be required to be resident in Canada and have only two purposes. First, it would hold shares of qualifying businesses for the benefit of the employee beneficiaries of the trust. Second, it would make distributions to employee beneficiaries, where reasonable, under a distribution formula that could only consider an employee’s length of service, remuneration and hours worked. Otherwise, all beneficiaries must generally be treated in a similar manner.

At least one third of the trustees would be required to be employees of a qualifying business controlled by the trust. Trustees of the EOT would generally be elected by the beneficiaries every five years. If any trustee is appointed (other than by such an election), no more than 40% of all trustees can be persons that sold shares of a qualifying business to the EOT (or be related to, or otherwise not act at arm’s length with, such individuals).

Trust beneficiaries would be limited to, and include all, qualifying employees (potentially including former employees and the estates of deceased employees). A qualifying employee would be an employee of a qualifying business controlled by the EOT. Employees could be excluded as beneficiaries until they complete a reasonable probationary period. Individuals, and persons related to, or otherwise not acting at arm’s length with, them who hold, or held prior to the QBT, a significant economic interest in the qualifying business would be excluded from being qualifying employees, and therefore could not be beneficiaries of the EOT.

Disqualifying event

If a disqualifying event occurs within 36 months of the QBT, the exemption would not be available. Where the individual has already claimed the exemption, it would be retroactively denied.

A disqualifying event would occur if an EOT loses its status or if less than 50% of the fair market value of the qualifying business’ shares is attributable to assets used principally in an active business at the beginning of two consecutive taxation years of the corporation.

If a disqualifying event occurs more than 36 months after a QBT, the EOT would be deemed to realize a capital gain equal to the total amount of capital gains in respect of which the vendors claimed the exemption. The normal reassessment period of an individual for a taxation year in respect of this exemption is proposed to be extended by three years, so CRA would have six years from the date of initial assessment to reassess in respect of any exemption claims under these proposals.

A claim for this exemption would require the EOT (and any corporation owned by the EOT that acquired the transferred shares) and the individual to elect to be jointly and severally liable for any tax payable by the individual as a result of the exemption being denied due to a disqualifying event within the first 36 months after a QBT.

Other matters

Under the proposed amendments to the alternative minimum tax (AMT), 30% of capital gains eligible for this exemption would be included in income for AMT purposes.

Budget 2024 also proposed to expand QBTs to include the sale of shares to a worker cooperative corporation. The worker cooperative would generally need to meet the definition set out under the Canada Cooperatives Act. Provided the relevant requirements are met, this would allow access to the same tax benefits as a QBT to an EOT, including the $10 million exemption. Budget 2024 indicated that additional details on this proposal will be released in the coming months.

Alternative Minimum Tax (AMT)

Individuals will owe AMT if the tax amount calculated under the AMT regime is greater than the tax calculated under the ordinary progressive tax rate regime. Under the legislated rules, the calculation of AMT allows fewer deductions, exemptions and tax credits than under the ordinary income tax rules. In 2023, the government proposed changes to AMT that would focus on high-income individuals and certain trusts by amending the following:

the AMT rate would be increased from 15% to 20.5%;
the exemption would be increased from $40,000 to the start of the fourth tax bracket (for 2024, this is $173,205); and
the AMT base would be broadened by further limiting tax preferences (i.e., exemptions, deductions and credits).

Budget 2024 proposed to make further changes to the AMT regime, such as the following:

to allow 80% of the donation tax credit (the 2023 proposals only provided for a 50% claim);
to fully allow deductions for the guaranteed income supplement, social assistance, and workers’ compensation payments;
to fully exempt employee ownership trusts from the AMT; and
to allow certain disallowed credits under the AMT to be eligible for the AMT carry-forward (i.e., the federal political contribution tax credit, investment tax credits, and labour-sponsored funds tax credit).

Budget 2024 also proposed to provide exemptions for certain trusts established for the benefit for various Indigenous groups. Interested parties can send comments to the Department of Finance Canada, Tax Policy Branch at consultation.legislation@fin.gc.ca by June 28, 2024.

All proposed AMT amendments would apply to taxation years that begin on or after January 1, 2024 (that is, the same day as the 2023 AMT amendments).

There were no broad-based changes to address concerns that many smaller trusts would be subject to AMT under the 2023 proposals. There was also no change to the 2023 proposal that only 50% of interest and financing costs incurred to earn income from property would be deductible for AMT purposes.

Volunteer Firefighters and Search and Rescue Volunteers Tax Credits

Budget 2024 proposed to double the credit amount for the volunteer firefighters tax credit and the search and rescue volunteers tax credit to $6,000. This would increase the maximum tax relief to $900. This enhancement would apply to the 2024 and subsequent taxation years.

Mineral Exploration Tax Credit

As announced on March 28, 2024, the government proposed to extend eligibility for the mineral exploration tax credit for one year to flow-through share agreements entered into on or before March 31, 2025.

Canada Child Benefit (CCB) – Death of a Child

Budget 2024 proposed to extend eligibility for the CCB for six months after the child’s death (the “extended period”) if the individual would have otherwise been eligible for the CCB in respect of that particular child. The extended period would also apply to the child disability benefit, which is paid with the CCB in respect of a child eligible for the disability tax credit. This measure would be effective for deaths that occur after 2024.

Disability Supports Deduction

The disability supports deduction allows individuals who have an impairment in physical or mental functions to deduct certain expenses that enable them to earn business or employment income or to attend school.

Budget 2024 proposed to expand the list of expenses recognized under the disability supports deduction, as follows:

where an individual has a severe and prolonged impairment in physical functions, the cost of an ergonomic work chair, a bed positioning device and purchasing a mobile computer cart;
where an individual has an impairment in physical or mental functions, the cost of purchasing an alternative input device to allow the individual to use a computer and purchasing a digital pen device to allow the individual to use a computer;
where an individual has a vision impairment, the cost of purchasing a navigation device for low vision; and
where an individual has an impairment in mental functions, the cost of purchasing memory or organizational aids.

Budget 2024 also proposed that expenses for service animals would be recognized under the disability supports deduction. Taxpayers would be able to choose to claim an expense under either the medical expense tax credit or the disability supports deduction.

This measure would apply to the 2024 and subsequent taxation years.

Home Buyers’ Plan

Budget 2024 proposed to increase the withdrawal limit from the home buyers’ plan from $35,000 to $60,000. This measure would apply to the 2024 and subsequent calendar years for withdrawals made after Budget Day.

Budget 2024 also proposed to temporarily defer the start of the 15-year repayment period by an additional three years for participants making a first withdrawal between January 1, 2022, and December 31, 2025. Accordingly, the 15-year repayment period would start the fifth year following the year the first withdrawal was made.

Qualified Investments for Registered Plans

Budget 2024 invited stakeholders to suggest how the qualified investment rules could be modernized on a prospective basis. Issues under consideration include the following: whether and how the rules relating to investments in small businesses could be harmonized to apply consistently to all registered savings plans; whether annuities that are qualified investments only for RRSPs, RRIFs, and RDSPs should continue to be qualified investments; whether and how qualified investment rules could promote an increase in Canadian-based investments; and whether crypto-backed assets are appropriate as qualified investments for registered savings plans.

Stakeholders are invited to submit comments to QI-consultation-PA@fin.gc.ca by July 15, 2024.

Indigenous Child and Family Services Settlement

Budget 2024 proposes to exclude the income of the trusts established under the First Nations Child and Family Services, Jordan’s Principle, and Trout Class Settlement Agreement from taxation. This would also ensure that payments received by class members as beneficiaries of the trusts would not be included when computing income for federal income tax purposes.

This measure would apply to the 2024 and subsequent taxation years.

Deduction for Tradespeople’s Travel Expenses

Eligible tradespeople and apprentices in the construction industry can currently deduct up to $4,000 in eligible travel and relocation expenses per year under the labour mobility deduction for tradespeople. A previously tabled proposal provided for an alternative deduction for certain travel expenses of tradespeople in the construction industry, with no cap on expenses, retroactive to the 2022 taxation year.

Budget 2024 announced that the government will consider bringing forward amendments to provide a single, harmonized deduction for tradespeople’s travel that respects the proposal.

B. Business Measures

Accelerated Capital Cost Allowance (CCA)

Productivity-Enhancing Assets

Budget 2024 proposed to provide immediate 100% CCA expensing for new additions of property in respect of the following three classes, provided that the property is acquired on or after April 16, 2024 and becomes available for use before January 1, 2027:

class 44 (patents or the rights to use patented information for a limited or unlimited period);
class 46 (data network infrastructure equipment and related systems software); and
class 50 (general-purpose electronic data-processing equipment, such as computers and systems software).

This expensing would only be available for the year in which the property becomes available for use. The claim would be prorated when the taxation year is less than 12 months.

Purpose-Built Rental Housing

Budget 2024 proposed to provide an accelerated CCA of 10% for new eligible purpose-built rental projects that begin construction on or after April 16, 2024 and before January 1, 2031. The property must be available for use before January 1, 2036. Eligible property would be residential complexes with at least four private apartment units or 10 private rooms or suites. At least 90% of the units must be held for long-term rental. Conversions of non-residential real estate, such as an office building, into a residential complex would be eligible. While renovations of existing residential complexes would not be eligible, the cost of a new addition to an existing structure would be. All the normal rules applicable to CCA would apply.

Restrictions

Property that has been acquired on a tax-deferred “rollover” basis, or from a non-arm’s length person, would not qualify for this acceleration of CCA.

Interest Deductibility Limits – Purpose-Built Rental Housing

Rules were previously proposed that would limit the amount of net interest and financing expenses that may be deducted by certain taxpayers in computing taxable income (the EIFEL rules). These proposed rules are currently before Parliament in Bill C-59.

The EIFEL rules provide an exemption for interest and financing expenses incurred in respect of arm’s length financing for certain public-private partnership infrastructure projects. Budget 2024 proposed expanding this exemption to also include situations in which arm’s length financing is used to build or acquire eligible purpose-built rental housing in Canada.

Canada Carbon Rebate for Small Businesses

In general, the federal government has intended to return 90% or more of the fuel charge collected in a province to individuals in that province through the Canada carbon rebate. A portion of the remainder is returned to farmers via a refundable tax credit. The government has committed to return the remainder of fuel charge proceeds to Indigenous governments and small and medium-sized businesses. The participating provinces include Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.

Budget 2024 proposed an accelerated and automated process to provide direct carbon rebates (a refundable tax credit) to Canadian-controlled private corporations (CCPCs) in provinces where the federal fuel charge applies. The rebate will be calculated by multiplying the number of persons employed in the province during the calendar year in which the fuel charge year begins, by a payment rate to be specified by the Minister of Finance. For example, the number of persons employed in the 2022 calendar year would be used to calculate the rebate in respect of the 2022-23 fuel charge year. To be eligible for the rebate, the corporation would need to have had no more than 499 employees throughout Canada in the calendar year. The payment rates for each applicable province for the 2019-20 to 2023-24 fuel charge years will be determined once sufficient information is available from the 2023 taxation year.

The tax credit would be paid automatically, with no application required. CRA would automatically determine the tax credit amount for an eligible corporation and pay the amount. It appears as if the number of employees would be determined by reference to the number of T4s filed.

With respect to the 2019-20 to 2023-24 fuel charge years, the rebate would be available where a tax return for the 2023 taxation year is filed by July 15, 2024. Budget 2024 indicated that this would deliver over $2.5 billion directly to 600,000 small- and medium-sized businesses.

Clean Economy Investment Tax Credits

Budget 2024 included a new 10% electric vehicle supply chain investment tax credit on the cost of buildings used in key segments of the electric vehicle supply chain, for businesses that invest in Canada across three supply chain segments:

electric vehicle assembly;
electric vehicle battery production; and
cathode active material production.

The credit would apply to property that is acquired and becomes available for use on or after January 1, 2024 (it would be fully eliminated by the end of 2034).

Budget 2024 also proposed that the clean technology manufacturing investment tax credit would be adjusted to incorporate polymetallic projects (projects engaged in the production of multiple metals; draft legislation will be released for consultation in summer 2024 and the government targets introducing legislation in fall 2024).

More details on the clean electricity investment tax credit were also provided (draft legislation was not included).

Mutual Fund Corporations

Budget 2024 proposed to preclude a corporation from qualifying as a mutual fund corporation where it is controlled by or for the benefit of a corporate group (including a corporate group that consists of any combination of corporations, individuals, trusts, and partnerships that do not deal with each other at arm’s length). This measure would apply to taxation years that begin after 2024.

Non-Compliance with Information Requests

Budget 2024 proposed several amendments to expand CRA’s ability to gather information. They are intended to enhance the efficiency and effectiveness of tax audits of uncooperative taxpayers and facilitate the collection of tax revenues on a timelier basis. The proposed measures included the following:

CRA would be permitted to issue a “notice of non-compliance” to a taxpayer that fails to comply with a requirement or notice to provide information;
where a notice of non-compliance is issued, a penalty of $50 per day ($25,000 maximum) would apply until the request is complied with;
CRA would be permitted to require that information (oral or written) or documents included in a requirement or notice be provided under oath or affirmation;
when CRA obtains a compliance order against a taxpayer from a court, the taxpayer would be subject to a penalty equal to 10% of the aggregate tax payable by the taxpayer for each related taxation year for which aggregate tax payable exceeds $50,000; and
various extensions of the time limit for reassessments would apply, generally providing CRA with additional time equal to the period of non-compliance, or of any legal dispute related to a requirement or notice.

C. International Measures

Crypto-Asset Reporting Framework

Budget 2024 proposed to impose a new annual reporting requirement on crypto-asset service providers that deliver business services effectuating exchange transactions in crypto-assets (e.g. crypto exchanges, crypto-asset brokers and dealers, and operators of crypto-asset automated teller machines).

Crypto-asset service providers would be required to report to CRA, in respect of each customer and in respect of each crypto-asset, the annual value of:

exchanges between the crypto-asset and fiat currencies;
exchanges for other crypto-assets; and
transfers of the crypto-asset, including the requirement to report information in respect of a customer of a merchant where the crypto-asset service provider processes payments on behalf of the merchant and the customer has transferred crypto-assets to the merchant in exchange for goods or services with a value exceeding US$50,000.

Reportable crypto-assets would exclude central bank digital currencies and specified electronic money products (e.g., digital representations of fiat currencies), which would be reportable under proposed amendments to the Common Reporting Standard included in Budget 2024.

In addition to information on crypto-asset transactions, crypto-asset service providers would be required to obtain and report information on each of their customers, including name, address, date of birth, jurisdiction(s) of residence and taxpayer identification numbers for each jurisdiction of residence. If a customer is a corporation or other legal entity, the same information would need to be collected and reported in respect of the natural persons who exercise control over the entity. Reporting would be required with respect to both Canadian resident and non-resident customers.

Withholding for Non-Resident Service Providers

Budget 2024 proposed to provide CRA with the legislative authority to waive the 15% withholding requirement on payments to non-residents for services provided, over a specified period, if either of the following conditions are met:

the non-resident would not be subject to Canadian income tax in respect of the payments because of a tax treaty between its country of residence and Canada; or
the income from providing the services is exempt income from international shipping or from operating an aircraft in international traffic.

D. Sales and Excise Measures

Extending GST Relief to Student Residences

In 2023, the government announced that it would temporarily remove the GST from new purpose-built rental housing projects, such as apartment buildings, student housing and senior residences built specifically for long-term rental accommodation.

Budget 2024 proposed to apply the normal GST/HST rules that apply to other builders (i.e., paying GST/HST on the final value of the building) in respect of new student housing projects such that they can claim the enhanced GST rental rebate. Budget 2024 also proposed to allow universities, public colleges and school authorities that operate on a not-for-profit basis to access the rebate with respect to new student housing. This would not be available to universities, public colleges and school authorities that operate on a for-profit basis.

The proposed measures would apply to student residences that begin construction after September 13, 2023 and before 2031, and that complete construction before 2036.

GST/HST on Face Masks and Face Shields

Budget 2024 proposed to repeal the temporary zero-rating of certain face masks or respirators and certain face shields under the GST/HST. This measure would apply to supplies made on or after May 1, 2024.

E. Other Measures

Housing Plan

Budget 2024 included a variety of proposed initiatives to stimulate home construction. In addition to tax-related measures discussed elsewhere in this document, a variety of non-tax measures were proposed, including the following:

first-time homebuyers will be permitted to obtain CMHC-insured mortgages with a 30-year amortization period if they purchase a newly built home, commencing August 1, 2024;
the Canada Mortgage Charter will include an expectation that permanent amortization relief will be provided to allow existing homeowners to reduce their payments by extending their mortgage term in order to facilitate homeowners being able to retain their homes; and
expanded efforts will be undertaken to unlock government-owned real estate to be used for home construction, including the use of land held by the Department of National Defense and converting underused federal offices into homes.

Canada Pension Plan (CPP)

Budget 2024 proposed to coordinate with provincial partners to make amendments to the CPP, including the following:

enhance the death benefit for certain contributors;
add a children’s benefit for part-time students whose parent is deceased;
extend eligibility for children’s benefits where a disabled parent reaches age 65; and
end eligibility for survivor’s benefits to people who are legally separated after a division of pensionable earnings.

Canada Disability Benefit

Budget 2024 provided additional details on the launch of the Canada disability benefit. Payments under this benefit are intended to commence in July 2025, following the successful completion of the regulatory process and consultations with persons with disabilities. A maximum annual benefit of $2,400 would be available to low-income persons between the ages of 18 and 64 eligible for the disability tax credit. The benefit is expected to support over 600,000 individuals.

Student Loan Forgiveness

Forgiveness of student loans for health care and social services professionals working in rural or remote areas would be expanded from its current coverage of, doctors and nurses to also be available to early childhood educators, dentists, dental hygienists, pharmacists, midwives, teachers, social workers, personal support workers, physiotherapists and psychologists.

Canada Learning Bond

The Canada learning bond is a government contribution of up to $2,000 per year to registered education savings plans (RESPs) for children in low-income families. In order to increase the receipt of these amounts, Budget 2024 proposed the following initiatives:

commencing with children born in 2024, RESPs would be opened automatically for children eligible for these payments in the year they turn four years of age;
caregivers of older children eligible for these payments will be permitted to apply for the creation of a similar RESP, and the automatic deposit of these funds; and
the maximum age to retroactively claim the Canada learning bond will be increased to 30 from 20.

Charities and Qualified Donees

Budget 2024 proposed several amendments relating to the charitable sector, including the following:

modernizing the way in which CRA provides services and communicates information relating to registered charities and other qualified donees;
amending certain rules for qualifying foreign charities;
removing the requirement that official donation receipts contain:
the place of issuance of the receipt;
the name and address of the appraiser, if an appraisal of the donated property has been done; and
the middle initial of the donor; and
updating the regulations to expressly permit charities to issue official donation receipts electronically, provided that they contain all required information, they are issued in a secure and non-editable format and the charity maintains an electronic copy of the receipts.

The above measures, other than those related to foreign charities, apply upon royal assent.

Canada Revenue Agency (CRA) Funding

Additional funding will be provided to CRA for initiatives including the following:

ongoing efforts to identify non-compliance in real estate transactions;
pilot new automatic filing services SimpleFile Digital and SimpleFile by Paper to increase filings by low-income taxpayers; and
improve the efficiency of its call centres.

Consultations and Reviews

Budget 2024 also announced the following areas proposed to be reviewed, some with formal consultations:

modernizing the scientific research & experimental development tax incentive program, with an intention to increase annual funding by $150 million;
implementing a tax on residentially zoned vacant land; and
issuing draft legislation to limit non-sufficient funds (NSF) charges to $10, and restrict their application in various other ways.

F. Previously Announced Measures

Budget 2024 confirmed the government’s intention to proceed with the following previously announced tax and related measures, as modified to consider consultations, deliberations and legislative developments, since their release.

Legislative proposals released on March 9, 2024, to extend by two years the 2% cap on the inflation adjustment on beer, spirit and wine excise duties, and to cut by half for two years the excise duty rate on the first 15,000 hectolitres of beer brewed in Canada.

Legislative proposals released on December 20, 2023, including with respect to the following measures:
the clean hydrogen investment tax credit and clean technology manufacturing investment tax credit;
bona fide concessional loans;
denial of expenses for certain short-term rentals;
ovaping excise duties; and
international shipping.

Legislative and regulatory proposals announced in the 2023 Fall Economic Statement, including with respect to the following measures:
the Canadian journalism labour tax credit;
proposed expansion of eligibility for the clean technology and clean electricity investments tax credits to support generation of electricity and heat from waste biomass;
the addition of psychotherapists and counselling therapists to the list of health care practitioners whose professional services rendered to individuals are exempt from GST/HST;
proposals relating to the GST/HST joint venture election rules;
the application of the enhanced GST rental rebate to qualifying co-operative housing corporations; and
proposals relating to the underused housing tax.

Regulatory proposals released on November 3, 2023, to temporarily pause the federal fuel charge on deliveries of heating oil.

Legislative and regulatory amendments to implement the enhanced GST rental rebate for purpose-built rental housing announced on September 14, 2023.

Legislative proposals released on August 4, 2023, including with respect to the following measures:
carbon capture, utilization and storage investment tax credit;
clean technology investment tax credit;
labour requirements related to certain investment tax credits;
enhancing the reduced tax rates for zero-emission technology manufacturers;
flow-through shares and the critical mineral exploration tax credit – lithium from brines;
employee ownership trusts;
retirement compensation arrangements;
strengthening the intergenerational business transfer framework;
the income tax and GST/HST treatment of credit unions;
a tax on repurchases of equity;
modernizing the general anti-avoidance rule;
providing relief in relation to the GST/HST treatment of payment card clearing services;
extending the quarterly duty remittance option to all licensed cannabis producers;
including revised luxury tax draft regulations to provide greater clarity on the tax treatment of luxury items; and
excessive interest and financing expenses limitations.

Legislative proposals released on August 9, 2022, including with respect to the following measures:
substantive Canadian-controlled private corporations;
remaining legislative and regulatory proposals relating to the GST/HST,
excise levies and other taxes and charges announced in the August 9, 2022 release;
legislative amendments to implement the hybrid mismatch arrangements rules announced in Budget 2021; and
regulatory proposals released in Budget 2021 related to information requirements to support input tax credit claims under the GST/HST.

Violation of Occupational Health & Safety Act Results in Unprecedented Fines

2024-04-16T14:47:05Z

On April 5, 2024, an unprecedented fine was levied towards a corporation and its director for violation of the Occupational Health and Safety Act . The corporation was fined $600,000 and the director was fined $80,000, plus a 25% victim surcharge.

These are highest fines levied both towards a corporation, and to an individual for a single charge in Canadian history, and is further evidence that governing bodies are serious about enforcing legislation to protect workers and prevent further fatalities and injuries.

What can we learn from this?

1. Chemical handling protocols are critical for reducing risk in the workplace. In this case, diesel fuel and gasoline were unintentionally mixed, causing an increased flammable hazard. Ultimately, this mistake resulted in catastrophic explosions and fires that caused the death of 6 people and serious injury of another.

2. Directors are being held increasingly accountable for the workers under their care; specifically, for oversight of middle management/supervisors and ensuring hazards are identified and controlled. While consistent with their legislated duties under the Act, historically directors have not been the target of large fines and charges. Instead, the penalties were previously levied toward front line supervisors and staff. This reflects the growing understanding that senior directors have the most accountability for the workplace and workers, and that they have a duty to know what is happening in their organization.

3. Senior leaders need to have open communication and trust with their workforce to ensure candid and frequent flow of information. Leaders won’t know what is happening, and therefore cannot take action to address risk if the workforce is fearful or apprehensive about reporting their concerns.

Consider who in your workplace provides this information and to whom. If you are a leader, what questions should you be asking and what to you need to know? Do you believe that staff are open and honest, without fear of repercussions when delivering bad news? Is there a clear and accessible process for reporting, tracking, and resolving issues?

4. Workplace culture is built from the top. Leaders are responsible for establishing systems and structures that support a culture that prioritizes worker safety. Blame-centered culture reinforces our natural instinct of self preservation over disclosure; silence and secrecy over candor and open communication. Also, actions mean more than words. Leaders need to ensure actions and directives echo policy statements, and vice versa.

So, what can you do?

Ensure that you have an environment where staff feel comfortable reporting issues, where supervisors and managers appreciate staff input and take action to address these concerns. Having little or no reported concerns is a red flag and is a prime indicator that staff do not understand or feel comfortable reporting issues. Ensure that staff are trained about the specific tasks and hazards in your workplace, not just general safety measures, and equip supervisors and managers with the tools and knowledge they need to be successful and manage the workers under their care.

To read more about the incident, the Ministry of Labour, Labour, Immigration, Training and Skills Development has published a court bulletin: https://news.ontario.ca/mlitsd/en

For any assistance or answers about how you can bolster your health and safety systems and due diligence, contact our resident safety expert Jennifer Goertzen, CRSP .

Office Hours Update

2024-04-12T18:12:23Z

As we near the end of Tax Season, please note our office hours below:

Hours until April 29th

Monday – Friday 8:30am – 5:30pm

Thursday evenings 6:30pm – 8:00pm (closed from 5:30pm- 6:30pm)

Saturdays 9:00am – 12:00pm

Hours on April 30th

8:30am – 5:00pm

Hours May 1st – May 3rd

Closed

Hours beginning May 6th

Monday – Thursday 8:30am – 5:00pm

Friday 8:30am – 4:30pm

Should You Save or Pay Down Debt?

2024-03-20T17:04:23Z

This article is based off our podcast episode “Paying Down Debt vs. Saving with a Wealth Advisor”. If you prefer to listen rather than read, you can find it here .

It’s been about two years since Central Banks started increasing interest rates to combat inflation. For anyone with debt in their lives, the question has likely become “Do I put extra money towards paying down debt, or do I save it?”.

There are three ways to use your money. The first is spending it on goods and services. Once it’s spent, it’s gone and is replaced with an item or a service. Many of those things you need to do just to survive – you need to keep food in your tummy and the lights on at home. The other two forms of spending are investing and paying down debt.

Investing and paying down debt are both forms of spending that improve your net worth. If you’re investing, the value of your assets increases. If you’re paying down debt, your liabilities decrease. Either are a good choice when it comes to increasing your net worth, but one may be better than the other depending on your personal situation.

How do you weigh the options of paying down debt versus investing?

When you pay down debt, you’re reducing the amount of interest you’ll pay in the future. For example, if you have a $100,000 loan that has a 5% interest rate on it and you pay off that loan, you will have saved yourself $5,000 in interest expense.

There is less certainty when you invest, unless you’re choosing a GIC or similar investment. If you’re putting funds into a balanced portfolio with stocks and bonds, you are hoping to earn investment income including interest, dividend payments, and eventually price appreciation. However, as with anything in the markets, the value of that initial investment can go up and down. Your rate of return simply cannot be guaranteed.

In choosing to pay down debt, you are guaranteed a rate of return – unless you have a variable rate in place. Typically, though, you know what your interest cost will be annually. In choosing to invest, you are asking yourself whether you can do better than the guaranteed rate of return on your debt. Interest rates were historically low up until last year – your guaranteed rate of return on debt was maybe 2% - so it was less attractive to pay down debt.

What about those who are still benefiting from a low fixed interest rate on their debt?

Many people are still benefiting from historically low fixes rates today. If you got a new mortgage in 2020 or 2021, you could have a mortgage rate under 2%. In hearing that mortgage rates have climbed to 7% at the time of writing, some people are feeling panicked, thinking they need to pay down their mortgage. However, doing so right now may not be in your best interest financially.

Alternatively, having a lump sum ready to pay down on your mortgage when it matures IS a good idea. If you have money from an inheritance for example and you’re not sure what to do with it, one strategy could be to put that money in a risk-free investment that could earn you 5% now, beating that 2% mortgage. As long as you ensure your risk-free investment matures at the same time or a bit before your mortgage term, you can then use that lump sum to pay down your debt. In this way, you’re able to take advantage of the higher interest rates now.

How does tax impact your choice?

There are also tax implications to consider when looking at paying down debt or investing. For example, contributing to a Registered Savings Plan (RSP) offers a tax deferral that could be beneficial in the future. If you put $10,000 into an RSP and your marginal tax rate is 30%, you will be in a better position by $3,000. One strategy could be to make the RSP contribution, file your taxes, get your return, and then use that lump sum from your return to pay down debt.

Another situation to consider is deductible debt. This is generally debt that is used to acquire a business or assets within a business. Typically, a mortgage or home equity line of credit doesn’t qualify. In this situation of comparing rates of return on debt versus investing, you must consider the tax implications. In a corporation or a sole proprietorship, the interest costs applied to generate income can be used against the related revenue to lower the taxable income. This can become a complicated calculation and is very individualized based on your unique situation. It’s important to seek professional advice from an Accountant or Financial Planner before making any decisions.

Others Considerations

Other important factors to consider when making the decision between paying down debt or investing are:

The type of debt you have
Eg: Non-secured debt like a credit card with 20% interest is almost always one you want to pay down immediately. Rarely can you find a rate of return on an investment higher than 20%!
Cash flow needs
A bonus is great to receive, but do you have seasonality to your income? Or maybe you have a trip planned. Consider what you need over the next 6-12 months and plan accordingly
If you pay down your debt, how will you use funds in the future to improve your net worth?
Eg: paying off your mortgage is a great feeling, but what will you do with the money coming in that was previously being used for mortgage payments? Your Financial Planner can help you make a strong financial decision, rather than using it all on goods and services and not improving your net worth.

Our Financial Planners are always ready to answer your questions related to paying down debt, investing, and more.

Next Steps

Contact a Ward & Uptigrove Wealth Management representative at 519-291-3040 or email info@w-u.on.ca to learn more.

2023 Year End Newsletter

2023-12-19T13:39:43Z

Accounting

Tax Updates

Agriculture Updates

Miscellaneous Updates

Human Resources Solutions

Policy Updates

Grants

Wealth Management

Firm News

Please Note Our Holiday Shutdown

The offices of Ward & Uptigrove will be closed from 3:00 pm on Friday, December 22nd and reopening in the New Year on Tuesday, January 2nd.

Updates on Underused Housing Tax (UHT)

On October 31, 2023, which was also the first administratively extended deadline to file the UHT returns for the 2022 calendar year, the Minister of National Revenue announced a further deadline extension of April 30, 2024. As such, owners affected by the UHT will have until April 30, 2024 to file their returns for the 2022 calendar year without being charged penalties or interest.

Further changes to UHT were proposed in the federal government’s 2023 Fall Economic Statement released on November 21, 2023. These changes are the following:

Elimination of Filing Requirements for Most Canadians

Starting with the 2023 calendar year, the definition of “excluded owner” is proposed to be expanded to include specified Canadian corporations, partners of specified Canadian partnerships, and trustees of Canadian trusts as defined in the UHT Act.

As “excluded owners” are not required to file UHT returns, when we look at our clients and the UHT returns that we prepared for the 2022 calendar year, we estimate only 1-2% will continue to have a filing requirement in 2023 under the new proposed rules.

It is important to clarify that this proposed change starts with the 2023 calendar year. The filing requirement for the 2022 calendar year is not being changed.

Reduction of Failure to File Penalties

Based on the current rules, the minimum late filing penalty per return is $5,000 where the owner is an individual and $10,000 per return where the owner is a corporation.

The federal government has proposed to reduce the minimum late filing penalty per return to $1,000 where the owner is an individual and $2,000 per return where the owner is a corporation.

This proposed change will be retroactive to the 2022 calendar year as well as future UHT filings.

Purchase of Depreciable Assets in 2024 and Onwards – Capital Cost Allowance (CCA)

The eligibility period for acquiring eligible property for immediate expensing by a Canadian-controlled private corporation (CCPC) will end on December 31, 2023. The eligible property must be considered available for use by December 31, 2023 in order to be eligible for this measure.

The eligibility period for individual and Canadian partnership where all the members are individuals is December 31, 2024. Therefore, there is still time for individuals and Canadian partnerships to benefit from the immediate expensing measure.

For an overview of the temporary immediate expensing measure, please refer to our previous article here .

For eligible property acquired after 2023 and before 2028 (hereinafter referred to as the “phase-out period”) by CCPC’s, the previous Accelerated Investment Incentive (AII) will apply subject to a new phase-out.

For eligible property that would normally be subject to the half-year rule and that becomes available for use during the phase-out period, the enhanced first-year allowance is two times the normal first-year CCA deduction. In essence, CCA is calculated at the rate relevant to that class without applying the half-year rule.

For eligible property that would not normally be subject to the half-year rule and that becomes available for use during the phase-out period, the enhanced first-year allowance is generally equal to one-and-a-quarter times the normal first-year CCA deduction.

The following chart illustrates eligible property acquired and that becomes available for use in 2024 by a CCPC:

The phase-out period after 2023 for manufacturing and processing, clean energy equipment, and zero-emissions vehicles and equipment will be the following:

2024 and 2025: The first-year deduction is 75%
2026 and 2027: The first-year deduction is 55%

ROITC Reminder

The temporary increase in the Regional Opportunities Investment Tax Credit (ROITC) rate (from 10% to 20%) for qualifying expenditures ends December 31, 2023. This credit applies to the construction, renovation or acquisition of eligible commercial and industrial buildings in certain regions.

Changes to Interest Rates – Tax Implications

The recent rise in interest rates has resulted in the Canada Revenue Agency (CRA) increasing the following two key interest rates in 2023:

The interest rate on overdue taxes is currently 9%, and will be increasing to 10% in January 2024.
The interest rate used to calculate taxable benefits to employees and shareholders from interest free and low-interest loans is currently 5%, and will be increasing to 6% in 2024.

It is important to note that the interest the CRA charges is not tax deductible, making the interest even more punitive. Consequently, it is important to pay all amounts owing including instalments to the CRA on time. Larger penalties will be in effect if a business repeatedly misses deadlines.

Tax Planning – Agriculture

Each year, near the end of November and into December you should review if your taxable income will be higher than normal for 2023.

Please review the options below which could be used to minimize your tax liability:

Prepaid Expenses - If you have the funds available, an effective way to defer taxes is to prepay for 2024 expenses prior to December 31st. Examples of common prepayments are for crop inputs and livestock feed.
Asset purchases – Immediate expense:
Corporation - If you operate Agricultural business as a Canadian-controlled private corporation (CCPC) and are holding off on an asset purchase until 2024, you might consider purchasing the asset before December 31st to take advantage of immediate expensing of asset purchases which will end on December 31, 2023.
Sole Proprietors or Partnerships – The immediate expensing eligibility period for an individual and Canadian partnership where all the members are individuals is December 31, 2024.
Asset purchases - accelerated capital cost allowance:
For any assets excluded from immediate expensing the purchase could qualify for the Accelerated Investment Incentive (AII). Please refer to the article here .
Payables – Pay invoices in 2023 rather than waiting until 2024. Paying as many expenses as possible before year-end, will result in more deductible expenses for 2023 on a cash basis and will reduce your taxable income for the current year.
Holding inventory - Delay the sale of inventory (crops, livestock) until 2024. If you were planning on selling some inventory (crops, livestock) before year end but you do not need the cash flow until after year end, deferring the sale or collection on a sale can be an effective method to defer taxes.

Review Engagements – Accounting for Biological Assets and Additional Information Required

The new section of accounting standards providing guidance on accounting for agricultural inventories is effective for fiscal periods beginning on or after January 1, 2022. This standard will only affect your operations financial statements if you require financial statements subject to a “Review engagement”.

This new section will require a distinction be made between agricultural inventories and productive biological assets (eg. dairy cows) with each being reported separately on agricultural producer’s financial statements. Agricultural inventories (eg. crops and non-productive livestock) can be measured at their cost or net realizable value. Productive biological assets must now be initially measured at cost and in most cases will be recorded as long-term assets on the financial statements as opposed to being recorded as inventory and a current asset.

Agricultural producer’s financial statements will now include additional disclosure requirements for any productive biological assets and agricultural inventories. Transitional provisions will be considered for each client to reduce the administrative time in applying these new reporting standards. However, in order to properly implement the disclosure requirements additional information may be requested when preparing your review engagement financial statements. For example, additional information requested from clients may include livestock and produce production schedules which may not have been prepared in the past. Requests may also include quantities of crops harvested, quantities of crops purchased or sold number of head sold or purchased during the fiscal year.

Program and Tax Credit Updates

Poultry and Egg On-Farm Investment Program (PEFIP) is a 10-year program (ending March 31, 2031) to help supply-managed poultry and egg producers adapt to market changes resulting from the implementation of international trade agreements. Additional information can be found here . If you require assistance with the registration process or a project application, please contact your accountant.
Dairy Direct Payment Program has made available $1.2 billion in funding over the next 6 years to account for the impacts of the Canada-United States-Mexico Agreement (CUSMA). The 2023-2024 intake period is now open.
The Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a new 5-year agreement, April 1, 2023 to March 31, 2028 between the federal, provincial and territorial governments. The agreement includes $1 billion for federal programs and activities, and $2.5 billion in cost-shared programs and activities funded by federal and provincial governments.
ACC loans – the interest free limit of the Advance Payments Program increased to $350,000 for the 2023 program year. Further information on the Advance Payments Program and other loan programs offered by ACC can be found here , or contact your accountant.

Deadlines - AgriStability & AgriInvest

AgriStability: Deadlines for the 2023 program year

December 31, 2023: Apply for interim payment
December 31, 2023: Pay fee – final deadline (20 per cent increase)
June 15, 2024: Submit T1163 (individuals)
June 30, 2024: Submit Statement A (corporations, trusts and special individuals)
June 30, 2024: Submit Year-end report and Claim form
June 30, 2024: Pay fee, submit New Participant Form or cancel coverage for 2024 AgriStability
December 31, 2024: Final deadline – Report your 2023 farm income to Canada Revenue Agency (corporations)

AgriInvest: Deadlines for the 2023 program year

September 30, 2024: For individual participation AgriInvest only, submit 2023 T1163 to Canada Revenue Agency
September 30, 2024: For corporations, trusts and special individuals’ participating in AgriInvest only, submit 2023 Statement A to Agricorp

Advancing in Ag through Stewardship with Maitland Conservation

A message from the Maitland Conservation Authority:

Covering the watersheds of the Maitland, Nine Mile, and Eighteen Mile rivers, and sub-watersheds along the Lake Huron shoreline, Maitland Conservation has various programs and recommendations dedicated to building agricultural resilience through on-farm practices.

These efforts target benefits including, reducing need for non-renewable fuel and fertilizers, reducing management costs, increasing economic benefit and ecological production, and restoring biodiversity.

Stewardship areas of focus include:

Cover Crops
Marginal Land Restoration
Stream Buffering
Wetlands
Windbreaks

Follow the link to discover opportunities for guidance and funding that will bring these benefits home.

Maitland Conservation Stewardship Newsletter

Tree and shrub orders are currently being accepted for spring 2024 planting. Order forms and program information are posted on their website at mvca.on.ca The deadline for orders is Jan. 31, 2024.

CEBA Repayment

The CEBA loan forgiveness repayment deadline and terms have been updated but are still forthcoming. There are two ways to receive forgiveness:

The entire non-forgivable loan balance ($30,000 if a $40,000 loan was received or $40,000 if a $60,000 loan was received) must be repaid by January 18, 2024 OR
An application for alternative financing needs to be submitted prior to January 18, 2024 to the same financial institution the provided the original CEBA loan, and the non forgivable portion of the original CEBA loan is then repaid by no later than March 28, 2024.

If you do not repay your loan by January 18, 2024, your loan will convert to a term loan with full principal repayment due on December 31, 2026. Starting January 19, 2024, interest at a rate of 5% per annum will apply to the outstanding balance of your CEBA loan.

Veterinary Incentive Program

The Veterinary Incentive Program is a new funding program in Ontario that aims to encourage newly licensed veterinarians who practice on food animals to work in underserviced areas, including northern communities. The grant is also available for licensed veterinarians who are relocating to a clinic in an underserviced area. Grant funds may total up to $50,000 per person, and the program will run for nine years, with grant payments made over a five-year period.

Applications are being accepted on a continuous basis until March 31, 2027. Specific eligibility requirements must be met in order to be considered as an applicant. Eligibility requirements, application forms, and more information on the program can be found here .

Additional T4 and T4A Requirements for 2023 – Canadian Dental Care Plan

Due to the federal government setting up a Canadian Dental Care Plan for families that have adjusted net income of less than $90,000, there are new requirements on the 2023 T4 and T4A for all employers.

For T4s there will be an additional box (box 45) that must be filled out with information as to whether the employee and their spouse and dependents have access to dental benefits.
For T4As the same information may be required

It is important to note that employers will not be indicating whether the employee is utilizing the dental benefits that are provided by their employer, but whether they have access to them.

The following are the codes that would be put in either box 45 on the T4, or box 15 on the T4A:

Code 1 - No access to any dental care insurance or coverage of dental services of any kind
Code 2 - Access to any dental care insurance, or coverage of dental services of any kind for payee only
Code 3 - Access to any dental care insurance, or coverage of dental services of any kind for payee, spouse and dependents
Code 4 - Access to any dental care insurance, or coverage of dental services of any kind for payee and their spouse
Code 5 - Access to any dental care insurance, or coverage of dental services of any kind for only the payee and the dependents

These codes will be used by CRA in order to determine eligibility for the Canadian Dental Care Plan.

For more information, please visit the CRA – T4/T4A Reporting Requirements webpage and the CRA – Canadian Dental Benefit webpage .

Policy Updates

WSIB Changes

As of September 29, 2023, the WSIB must receive an employer’s accident report within three business days after the employer learns of the reporting obligation (business days are Monday to Friday, and do not include statutory holidays). This is a change from seven business days previously.

Minimum Wage Increase

General minimum wage in Ontario increased on October 1, 2023 to $16.55. Details on other minimum wage requirements can be found here .

Licensing Requirements of Temporary Help Agencies and Recruiters – Comes into effect July 1, 2024

Beginning on July 1, 2024, employers will be responsible to ensure that any company they are using to recruit is licensed – even if the recruiter and/or help agency works outside of the province/country when they are recruiting for Ontario. It is expected that in 2024, the government will have all licensed companies posted on their website.

Ward & Uptigrove Human Resources Solutions has applied to become a licensed recruiter to continue to serve our clients.

Disconnecting from Work

A reminder that beginning in 2023 and the years following, employers that employ 25 or more employees on January 1 of any year must have a written policy on disconnecting from work in place before March 1 of that year. You can learn more about disconnecting from work policies here .

Electronic Monitoring

A reminder that employers with 25 or more employees on January 1 of any year are required to have a written policy on the electronic monitoring of employees in place. To learn more, visit the website here .

Grants

Canada Summer Jobs

Canada Summer Jobs (CSJ) provides wage subsidies to employers to create quality summer work experiences for young people aged 15 to 30 years. Funding can be up to 100% of general minimum wage for non-profit organizations, and 50% for private and public sector organizations.

Applicants are considered based on a number of requirements, including special local priorities. Local priorities for Perth-Wellington include:

Support for a local event: Community events
Support for a specific type of project: Projects supporting not for profit organizations
Support for a specific type of project: Projects supporting small businesses
Support for projects that offer programs and/or support to specific target groups: Children and/or youth
Support for projects in a specific economic sector: Agricultural, forestry, fishing and hunting

To learn more about CSJ or to apply, visit the website here .

Canada-Ontario Job Grant

Canada-Ontario Job Grant (COJG) provides opportunities for employers to invest in their workforce, with help from the government.

Employers can get up to $10,000 in government support per person for training costs.
The training must be delivered by an eligible, third-party trainer.
Employers with 100 or more employees need to contribute 1/2 of the training costs. Small employers with less than 100 employees need to contribute 1/6 of training costs.
Most organizations acting as an intermediary are eligible for administrative funding equal to 15% of the government contribution.

To learn more about the COJG or to apply, visit the website here .

Paying Down Debt Vs. Saving

This article is based off our podcast episode “Paying Down Debt vs. Saving with a Wealth Advisor”. If you prefer to listen rather than read, you can find it here .

How do you weigh the options of paying down debt versus investing?

There is less certainty when you invest, unless you’re choosing a GIC or similar investment. If you’re putting funds into a balanced portfolio with stocks and bonds, the value of that initial investment can go up and down. Your rate of return simply cannot be guaranteed.

What about those who are still benefiting from a low fixed interest rate on their debt?

Alternatively, having a lump sum ready to pay down on your mortgage when it matures IS a good idea. If you have money from an inheritance for example and you’re not sure what to do with it, one strategy could be to put that money in a risk-free investment that could earn you 5% now, beating that 2% mortgage. If you ensure your risk-free investment matures at the same time or a bit before your mortgage term, you can then use that lump sum to pay down your debt. In this way, you’re able to take advantage of the higher interest rates now.

There are more things to consider like how tax impacts your decision, the type of debt you have, and cash flow needs. For a more detailed breakdown, listen to the full episode of “Integrating for Success” here .

By the Numbers

Why did IAIC change their name to TriCert Investment Counsel?

They wanted a name that brings clarity to our approach, is easy to say and is memorable. TriCert exemplifies our integrated approach of bringing together your three (Tri-) certified (-Cert) professionals (CPA, CFP, and CIM/CFA) as one team to better serve you and deliver results. Their new identity provides a better understanding of how your portfolio manager works with your accountant and financial planner to deliver comprehensive and tax-efficient solutions. Your business with TriCert Investment Counsel, formerly IAIC, remains uninterrupted.

Visit their new website at www.TriCert.ca to learn more.

Firm News

Did you know Ward & Uptigrove has its own podcast called “Integrating for Success”? We answer pressing client questions like “should I be paying down debt or saving?” and “how can I attract talent as a veterinary hospital?”

You can listen on our website here or wherever you get your podcasts.

Staff Updates

As 2023 comes to a close, we reflect on our 65th year of growth and progression with our staff. We are proud to congratulate the following staff members on their development and progression into new roles.

Principal Announcement

Congratulations to the following staff members on their progression to a Principal position in the firm, taking the next steps along their leadership journey. We look forward to seeing these individuals continue to develop and progress within the firm, and we thank them for their ongoing contributions.

Agriculture Department

Progressions

Business Department

Progressions

Tax Department

Progressions

HR Solutions

Progressions

Admin/Operations

Progressions

Congratulations on your retirement!

Brad Buchanan, CPA, CGA

Partner

After 36 years with Ward & Uptigrove, Brad Buchanan is retiring from the Partnership and transitioning to a Counsel role.

Brad will continue to serve his clients over the next few years, while he focuses on transitioning his clients to a new advisor at the firm.

We are thankful for Brad’s ongoing contributions to the firm.

Years of Service

Congratulations to the following staff members on reaching these career milestones. We thank you for your contributions and loyalty to the firm:

5 Years of Service

10 Years of Service

15 Years of Service

25 Years of Service

35 Years of Service

Welcome!

We are thrilled to welcome the following new staff members to our team since July:

Happy Holidays

from the Partners and Staff of Ward & Uptigrove

What is a Financial Plan?

2023-10-13T14:58:25Z

What goes into a comprehensive Financial Plan?

Financial plan is a broad term and it can be applied pretty loosely. But that’s okay, because a financial plan can be very different for everyone. Each individual situation will have different levels of focus and concentration, and it certainly isn't a cookie cutter, one size fits all.

A financial plan should go back to focusing on what the specific needs of that individual are. The first and most important piece is that you must define the financial goals and objectives of the person or the people that the plan is being completed for.

The second thing that you need to do is have a good understanding of the current financial position, which is understanding the person’s net worth. What do you own? Assets; do you own a house, do you have investments? What are your debts? Do you have a mortgage? Do you have a line of credit, or student loans, or loans within your business? All of these pieces are key to understanding someone’s financial position.

Additionally, there's a term that we call the “financial lifecycle” that helps us understand where you are in life from a qualitative point of view. Different people reside in different places on the financial lifecycle. For example, someone who is 30 years old with a couple of young kids is in a very different position than someone who is 60 years old with grown children.

So, within a financial plan, there are certain areas you can focus on, and how much work you do really depends on where you're on the financial lifecycle.

The six areas of focus within a comprehensive financial plan are: protection planning (otherwise known as insurance), investment planning, tax planning, retirement planning, estate planning, cashflow planning.

1. Tax Planning

Tax planning is very different for people with different sources of income. For someone with only employment income or T4 income, the use of RSP accounts is one of the common ways to limit taxes. Within your investing plan, you can use different strategies like taking advantage of tax free savings accounts, or maybe using a spousal RSP account.

For business owners, it can be even more sophisticated. Often, there is a company that's utilized for investing called a “hold co” or holding company. The specific strategy with tax planning is for the working years, to build money up into the savings company and then draw it down in retirement.

2. Estate Planning

Estate planning determines what happens with what's left when you pass away. It’s very lifecycle dependent as well, and often top of mind for the 60 year olds out there. Going through the retirement planning and then estate planning process gives you a good understanding of what could be left if passing away at different ages. We then have a discussion of what your wishes are and what you want to have done with the excess. We make sure that your documents, specifically your will, reflects those wishes and ensure they’re in place and up to date.

There are also conversations to be had about the transition of wealth before an estate settlement can be done. The transition of wealth to the next generation can have tax advantages, but it must be planned for to ensure you will have enough for yourself.

Power of attorney documents are also extremely important. These documents say who will look after your affairs if you haven’t passed away but are unable to look after these items yourself. In addition, there are documents that specifically address your health care and financial decisions. There are all sorts of complications about what the family may receive at death, especially second death, when RRIF accounts and corporate accounts are no longer being drawn from. If proper planning isn’t in place, there is the potential that over half of what you leave behind could go to tax.

3. Cash Flow Planning

It seems everything ultimately comes down to cash. When we're looking at 30-year-old individuals, it's money that's coming in, and making sure that we have a plan in place.

We ask: what's going towards debts? Are you paying down mortgages? Or maybe paying down line of credits or student loans? And then how much are you spending on insurance? How much are you putting towards savings each month, and then what's left to cover day to day expenses?

After you’ve put money towards your debts, insurance and savings, what you have leftover for day-to-day expenses may be eye-opening. This can help you realize what it means to live within your means, especially if you've got these other financial goals that we've talked about.

For the 60 year olds, we looks at things the opposite way. Where is cash going to come from when I'm in retirement? What's coming from government benefits like CPP and old age security? And where am I going to draw from my savings to ensure tax efficiency? This is where we would go back to tax and protection planning, to ensure you are fully covered.

4. Investment Planning

Investment planning is identifying what your savings are for and when those savings will be needed. For someone in their 30s, there may be a good portion of their savings that's designated for long term items. They might be putting money away for retirement, or it could be savings for a shorter period. However, for those in their 60’s, the investment planning is different. In a few years, you may start drawing from those investments. You need them to create an income.

All of this needs to be communicated to the Portfolio Manager so that they can do the appropriate investing work. And then within that, there is the use of specific accounts like RSPs, registered retirement savings plan accounts, Registered Education Savings Plans. For families that may have somebody with a disability, there's the Registered Disability Savings Plan Account that can be set up as well.

5. Retirement Planning

Retirement planning is typically the anchor of a financial plan, especially for those where retirement is on the horizon. Sometimes people say “oh, I'll never retire.” But the question you need to ask is when do you want to be working because you want to, not because you have to.

When planning for retirement, you need to go back to what your goals are and do the calculations to meet those goals. What do you need to live off? Maybe you want to travel and need money set aside for that. Or maybe you want to purchase a winter property and go away for four months of the year. Lately, with housing prices that we're seeing, some people want to gift money to their children earlier in their retirement years. Ensuring these goals can be met is the first step.

Relating it back to the 30 year olds, often, the retirement planning piece isn’t so important at that stage of the lifecycle. So much can change between now and when you're retiring. The main thing is to ensure that there is a savings plan in place or at least a path to savings plan. However, each plan is unique to each person’s individual goals.

6. Protection Planning

Protection planning is a fancy way of saying insurance. And primarily, protection planning ensures that there are measures in place if something bad happens, something that's going to prevent you from earning income going forward. Those bad things could be a death, accident, illness, or disability. There is insurance for all these areas, and each one is different from the next. What type of coverage and insurance you need often depends on where you are in the financial lifecycle.

What happens after you finish your Financial Plan?

Financial planning is a verb, it's something that's ongoing. It's not a noun. It's not the stack of paper or PDF document that just sits there and doesn't do anything. You must revisit the financial plan on an ongoing basis. Not only must you ensure that action items are taken care of, you may find you need to pivot and develop new strategies as your life changes. And this is where it's so important to have a good relationship with your Financial Planner.

If you want to learn more about comprehensive financial planning, listen to our podcast episode with President of Ward & Uptigrove Wealth Management, Luke MacLennan, CPA, CA on our website here or wherever you get your podcasts under "Integrating for Success".

Next Steps

Contact a Ward & Uptigrove Wealth Management representative at 519-291-3040 or email info@w-u.on.ca to learn more.

CEBA Loan Repayment Update

2023-09-28T12:24:32Z

New CEBA Repayment Deadlines

On September 14, 2023, the Prime Minister announced extended deadlines for Canada Emergency Business Account (CEBA) loan repayments, and additional flexibilities for loan holders looking to benefit from partial loan forgiveness of up to 33 per cent (up to $10,000 for a $40,000 loan, and $20,000 for a $60,000 loan).

What does this mean for you?

The December 31, 2023 repayment deadline has been extended to January 18, 2024 to qualify for partial loan forgiveness.

You may also make a refinancing application with the financial institution that provided your CEBA loan by January 18, 2024. This refinancing extension would push the repayment deadline to qualify for partial loan forgiveness to March 28, 2024.

Loans not repaid by January 18, 2024 (or March 28, 2024 if a refinancing application has been made) will be converted to a three-year 5% term loan. The term loan will require interest only payments with the full principal due December 31, 2026.

More information on the announcement can be found here. Most other CEBA questions may be answered through the CRA's FAQ section, however if you continue to have questions, you may call the CEBA Call Centre at 1-888-324-4201.

Your Ward & Uptigrove Accountant will also be happy to help guide you.

Agricultural Stewardship Initiative

2023-09-15T13:54:58Z

New Funding Opportunity for Farmers

The Agricultural Stewardship Initiative (ASI), provides cost-share funding to support farmers to accelerate the adoption of best management practices (BMPs) supporting soil health, water quality and productivity benefits on agricultural land across Ontario. The Initiative also provides enhanced funding on a regional basis for projects contributing to phosphorus reductions in the Lake Erie and Lake St. Clair watershed areas.

Funding is available to support projects focused on:

Equipment Modifications to Improve Manure Application
Equipment Modifications to Reduce Soil Compaction
Nutrient Application Equipment Modifications
Nutrient Management and Soil Health Planning

The intake will open September 15, 2023 at 9am ET and close September 28, 2023 at 5pm ET.

More information is available at the Sustainable Canadian Agriculture Partnership website .

7 DVM Compensation Trends with an HR Professional

2023-07-10T13:10:14Z

Hiring a veterinarian? Here's How You Can Set Your Practice Apart.

The veterinary industry is one that has seen a lot of change over a relatively short period of time. Associate DVM salaries are up, and gone (for now) are the days of “looking for work” as a veterinarian. Like many industries, competition for quality workers is at an all-time high. Private practices and corporate-owned practices alike are competing for the same people, and everyone is looking for a way to stand out from the competition.

Leah Frizzle, CHRP joined us to lay out the biggest trends she has been seeing as a Ward & Uptigrove Human Resources Advisor in the veterinary space. If you prefer to listen, you can catch this episode of the Integrating for Success podcast here .

1. Salary

Right now, we’re seeing large salaries, albeit with a wide range of around $110,000 to $206,000. The average annual salary we’ve seen is around $135,000. The higher salaries are coming from the larger corporations, as they are seemingly able to be more competitive on base salary.

Setting yourself apart in some way through compensation is a great way to get someone in the door. However, there is a lot that goes into a compensation package, more than just base salary.

2. Profit sharing

We’ve been seeing more and more practices adding profit sharing into employment contracts. This practice may allow smaller firms who are not able to offer as large a base salary compete for quality DVMs. It is important to note the profit-sharing agreements can vary widely from practice to practice.

3. Signing & Retention bonuses

Signing bonuses have become more and more common. We’re currently seeing an average of about $7,500, with a low of about $5,000 and a high of $10,000. However, in many cases, it may not be a sign-and-get-it-on-your-first-pay cheque situation.

Because of the competitive nature of the market, many clinics are now combining signing bonuses with retention bonuses, so instead of receiving a lump sum at the beginning of employment, practice owners are now providing signing bonuses in increments. As an example, the DVM would receive $2,500 on their first pay cheque, then another $2,500 in three months, assuming the veterinarian is still an employee. They would then receive the remainder following their first year of employment.

4. Continuing education

Another fairly consistent practice we’ve observed is the inclusion of some form of continuing education (CE) support outside of general paid time off (PTO). Both time off and funds for CE are on the table, but this varies depending on the size of the clinic and its priorities. For example, if a practice owner is looking to hire their successor, they are often willing to put a little bit more money towards leadership or business administration courses.

In general, the range we’re seeing on employment contracts is $750 to $2,500 per year, with the average being about $1,600. In addition to the funds, we’re seeing an average of two paid days off allocated to attend educational events, conferences, seminars, etc.

5. Benefit packages or Healthcare Spending Accounts

As part of the overall compensation package, we’re also seeing more health care support. The bigger clinics are able to offer comprehensive health and dental benefit packages, as they have enough employees to justify the cost. However, it just doesn’t make sense from a cost perspective for a lot of the smaller practices.

In some of the smaller practices we’re seeing a rise in health care spending accounts (HSCA), both self-administered and those administered by an external organization. In a self-administered HSCA, the practice owner has a set amount of funds used to provide reimbursement of specific healthcare costs directly to the employee. Ward & Uptigrove offers health care spending account program administration for those seeking external management of their program. With the accounts we manage, we’re seeing averages of about $1,250 a year. If a veterinarian does not have external benefits through a spouse or some other source, this is a little way to set your clinic apart from the rest.

6. Petcare spending accounts

While petcare spending accounts have been typical in veterinary clinics for a long time, they haven’t been documented in employee contracts like we’ve been seeing lately. Again, this is a good way to set a clinic apart from the competition.

Typically, annual exams, vaccinations, and other routine visits are offered at cost for the animals that live in the veterinarian’s primary household. While the work itself can often be done by the veterinarian, being able to provide services and products specifically at cost, as opposed to going to a PetSmart and paying the marked-up rate, is much more desirable when looking at an employment contract.

7. Culture

There’s a great book called “Drive” by Daniel Pink, and in it he explains how pay is an extrinsic factor when it comes to motivation. This means that more pay does not necessarily correspond with increased engagement. For example, if you’re paying someone $105,000 per year, they won’t be significantly more engaged if you pay them $120,000 a year. You don’t ever want to underpay someone, but if you have poor performers that you have been allowing to destroy the culture, throwing money at the problem isn’t going to fix the issue.

Prior to bringing in a new DVM, if you have employees you have been struggling with, you’ll want to address those issues. Bringing in a DVM and asking them to work with individuals who are already giving you a hard time will make it difficult for a new DVM to stay motivated and engaged. This could put you at risk of losing them.

BONUS: Long term strategies

There are also some longer-term strategies you can employ if you’re looking to add a DVM to your staff and have some time on your side. Engaging with the schools and bringing in co-op students in their first or second years can prove to pay off in the long run. Some clinics offer a retention bonus for students who return year after year to ensure their loyalty for two or three years post-graduation, as well.

Another avenue to explore is foreign-trained veterinarians. This is a huge untapped labour pool that, admittedly, can seem intimidating at first. It is certainly more expensive in the beginning, however there are a lot of long-term benefits that come from supporting a foreign-trained veterinarian, loyalty being a big one.

Connecting with local associations and even leveraging social media is another way to source veterinarians. There are a lot of Facebook groups for veterinarians, for example, where you might connect and build some relationships. You may not hire the exact person you’re messaging, but they may have a friend or coworker who’s looking for another job.

Lastly, look at your internal resources. Do you have a veterinary technician who’s interested in becoming a veterinarian? Is there a possibility of you providing some support and some funding to help them get there? In return, you can put into place a contract that would have them remain an employee of your clinic for a certain number of years following graduation.

Competition remains very stiff if you’re looking to hire a veterinarian, but there absolutely ways that practices can set themselves apart from others competing in the same labour pool. Are you struggling to hire someone? Contact Ward & Uptigrove Human Resources Solutions to get the help you need.

Interested in more pieces like this? Check out our podcast , where this conversation originated.

Have Questions?

Contact a Ward & Uptigrove Human Resources representative at 519-291-3040 or email info@w-u.on.ca

Individual Pension Plans (IPP)

2023-07-05T17:06:40Z

Dramatically boost your retirement assets with tax-deductible corporate contributions

How an Individual Pension Plan (IPP) works

An IPP is a tax-deferred savings vehicle used to invest and save for retirement. Contributions are tax-deductible and made directly from the corporation. Similar to an RRSP, the assets inside an IPP are tax-deferred until withdrawn, at which time they are treated as income.

How much can be contributed to an Individual Pension Plan?

Who is a good candidate for an Individual Pension Plan?

Business Owner

Registered Professional

Middle Aged Adult

T4 Earnings of $100k+*

*an IPP can be established for someone with lower earnings

Case Study

A business owner, aged 55, incorporated for 24 years, maximum T4 earnings of $178,600 with a current RRSP balance of $291,866.

$156,600 in immediate past service funding, tax-deductible to the company
$221,700 in qualifying transfer (from existing RRSP balance)
Up to $446,211 more in tax-deductible contribution room over working years (excluding past service)
The IPP balance could be up to $1,306,700 more than the RRSP balance

All the above figures are based on 2022 prescribed assumptions.

Advantages of an Individual Pension Plan

Increased tax-deductible contribution room – up to 65% more than an RRSP
Can reduce passive income in corporation
Tax-deductible company contributions for prior years (past service)
Richest benefit plan in Canada – 2% defined benefit pension plan
All costs are tax-deductible to the company
Creditor protection
Increased corporate and personal tax savings
Can include employed family members and pass on wealth to the next generation

Next Steps

Contact a Ward & Uptigrove Wealth Management representative at 519-291-3040 or email info@w-u.on.ca to learn more.

Summer 2023 Newsletter

2023-06-29T18:22:04Z

Accounting

Human Resources Solutions

Does This New Law Apply to My Business?

Wealth Management

Firm News

Please Note Our Summer Hours

The offices of Ward & Uptigrove will close Fridays at 12:00pm from July 7 through to September 1, 2023

Firm Updates

To our valued clients,

Like many businesses, W&U faced significant challenges in maintaining our service levels during the pandemic. These challenges were compounded by the additional work the pandemic created in helping our clients with the numerous government programs designed to provide financial assistance.

We truly enjoyed assisting our clients with these much-needed programs and take great pride in the fact that we helped our client base secure millions of dollars in grants, subsidies and interest free loans.

However, providing this assistance also strained our available capacity. Our service levels on our regular compliance work suffered and our turn-around times grew.

To address this, we responded by temporarily closing our door to new clients so that we could focus on assisting our existing client base meet their tax and other deadlines. We have also been increasing our staffing levels and providing the necessary training in order to clear the backlog and improve our service levels to the standards you have come to expect from us.

We are a bigger and better firm coming out of the pandemic, and we now have some capacity to take on a limited number of new clients with year ends that land outside our busiest time.

We thank you for your understanding, patience, and loyalty, and we welcome your referrals once again.

Thank you for your continued support.

Kris Uptigrove, CPA, CA

Managing Partner

Changes to Intergenerational Share Transfers – Budget 2023

In our July 29, 2021 article, we outlined a beneficial tax change for families that wished to transfer shares of a small business or family farm or fishing corporation to their children. Please click here to access this article.

In this same article, we noted that amendments would be forthcoming due to policy and legislative flaws. The 2023 federal budget, announced on March 28th, proposes amendments that would be applicable on or after January 1, 2024.

The purpose of these proposed amendments is to attempt to limit this beneficial tax change to genuine intergenerational transfers by introducing various criteria that need to be met.

The contents of these various criteria are complex, extensive and differ depending on whether the intergenerational share transfer occurs immediately (within 36 months) or gradually (within 120 months). Starting in 2024, intergenerational share transfer planning will need to meet various conditions under the following broad categories:

Level of control of the business by the parent before and after the transfer
Transfer of economic interest by the parent
Transfer of management by the parent
Control by child(ren) after the transfer
Level of effort by the child(ren)

Tax Tip – If you are contemplating a transfer of your family business to your child(ren) in the next few years, it may be beneficial to start on this and complete part/all of this succession planning in 2023 before the new, more restrictive tax rules are effective.

Changes to Alternative Minimum Tax – Budget 2023

Alternative Minimum Tax (AMT) is meant to ensure high income individuals that benefit from favourable tax exemptions, deductions or tax credits still pay some form of tax. The most common client situation we see AMT being applicable to is where the capital gains exemption is being claimed and, secondly, where large RRSP contributions are made in a particular year. There are other less common situations that may result in the AMT being applicable.

The 2023 federal budget proposes various changes to the AMT calculation. We believe this change will have a positive impact for most of our clients. With the proposed increase to the AMT basic exemption from $40,000 to approximately $173,000, most of our clients that would have been subject to AMT would see a more favourable result.

For clients claiming the capital gains exemption, the AMT under the new rules could be significantly less, which is a welcomed change.

The situation where we expect to see an increase in AMT being applied under the new rules is in situations where an individual taxpayer reports a large personal capital gain (generally greater than $700,000) that doesn’t qualify for the capital gains exemption. In this situation, we would review options to avoid or minimize this AMT by potentially transferring this gain to a corporation through certain transactions.

Tax Tip – If you are contemplating a sale of an asset after 2023 that would generate a large capital gain, please contact us so we can properly advise you on how to best structure the sale.

Changes to Interest Rates – Tax Implications

The recent rise in interest rates has resulted in the Canada Revenue Agency (CRA) increasing the following two key interest rates:

The interest rate on overdue taxes is currently 9%
The interest rate used to calculate taxable benefits to employees and shareholders from interest free and low-interest loans is 5%

It is important to note that the interest the CRA charges is not tax deductible, making the interest more punitive. Consequently, it is important to pay all amounts owing, including instalments, to the CRA on time.

Key Corporate Tax Matters

Small Business Deduction Change

The small business deduction provides corporations with a reduced tax rate on up to $500,000 of active business income. In Ontario, active business income earned by a corporation is generally taxed at a total tax rate of 26.5%. For income qualifying for the small business deduction, the total tax rate is only 12.2% on the first $500,000 of qualifying income. This provides a potential $71,500 tax deferral to corporations that qualify for this small business deduction.

However, there are ways this $500,000 small business limit can be reduced or fully eliminated. One of these ways is for larger corporations, including associated corporations, that have taxable capital of over $10 million at the end of the prior taxation year. Under the current rules, this small business limit would be fully eliminated once the taxable capital of these corporations is $15 million in total at the end of the prior taxation year. Effectively, every $10 of taxable capital above $10 million reduced the small business limit by $1.

Effective for taxation years starting on or after April 7, 2022, the upper limit has been increased from $15 million to $50 million. Effectively, every $80 of taxable capital above $10 million will now reduce the small business limit by $1.

This means that starting in 2023, some larger clients that previously did not benefit from the small business deduction may now access the small business deduction, providing a tax deferral which is a welcomed change.

Immediate Expensing Final Reminder

As noted in previous newsletters, the eligibility period for acquiring eligible property by a Canadian-controlled private corporate will end on December 31, 2023. Therefore, if you wish to make use of this measure before it is gone, it is important that the eligible property be acquired and available for use by December 31, 2023.

Individuals and Canadian partnerships have one additional year, being December 31, 2024, to acquire eligible property.

Ontario Regional Opportunities Investment Tax Credit (“ROITC”) Final Reminder

Also noted in previous newsletters, the temporary increase in the ROITC rate (from 10% to 20%) will apply to qualifying expenditures until December 31, 2023. This credit applies to the construction, renovation or acquisition of eligible commercial and industrial buildings in certain regions. Once qualifying expenditures reach $500,000, the ROITC provides for a refundable tax credit of $90,000 (being 20% of $450,000).

Miscellaneous Tax Matters

Property Flipping Rules – New for 2023

Starting January 1, 2023, profits from disposition of residential property that was owned for less than 365 days will be deemed to be business income and not capital gain eligible for the principal residence exemption.

Exceptions to these new rules are dispositions that arise from the following events:

Death of the taxpayer or a related person to the taxpayer
Related person joining the taxpayer’s household (such as birth of a child, adoption, or care of elderly parent) or the taxpayer joining a related person’s household
Breakdown of marriage or common-law partnership of the taxpayer (if living apart for at least 90 days prior to the sale)
Threat to the personal safety of the taxpayer or a related person
Serious illness or disability of the taxpayer or a related person
Eligible work relocations of the taxpayer or common-law partner (where the new home location is at least 40 km closer to the work location than the old home location)
Involuntary termination of the employment of the taxpayer or their spouse or common-law partner
Insolvency of the taxpayer
Destruction or expropriation of the property

It is important to note that even if one of the above exceptions apply, or if the property was held for 365 days or more, it still remains a question of fact whether a gain on a residential property sale would be taxed as business income or a capital gain.

Tax-Free First Home Savings Account (FHSA) – New for 2023

The FHSA is a new registered plan that would give prospective first-time home buyers the ability to save up to $40,000 on a tax-free basis. Please click here to read our previous article on this new registered plan. Qualifying individuals are now able to open an FHSA with their banking institution.

Underused Housing Tax Act – Administrative Extension

The CRA announced that, from an administrative perspective, it is extending the filing deadline for Underused Housing Tax (UHT) returns from April 30, 2023 to October 31, 2023. This extension is only for the current year. The filing deadline for UHT returns for future years will continue to be April 30th.

Please forward any UHT related documents you receive from the CRA to your Ward & Uptigrove primary contact.

Poultry and Egg On-Farm Investment Program (PEFIP)

PEFIP is a 10-year program to help supply-managed poultry and egg producers adapt to market changes resulting from the implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The Government of Canada has announced its commitment to provide additional compensation for the impacts of the Canada-United States-Mexico Agreement. Details for the additional funding have not been released by the government.

If you held quota/shares of provincial production on January 1, 2021 you may be eligible for funding. To determine your farms allocation of funding and to submit a project, you must first register with the program and validate your license information. Additional information can be found here . If you require assistance with the registration process or a project application, please contact your accountant.

Sustainable Canadian Agricultural Partnership

The Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a new 5-year agreement, April 1, 2023 to March 31, 2028 between the federal, provincial and territorial governments. The agreement includes $1 billion for federal programs and activities, and $2.5 billion in cost-shared programs and activities funded by federal and provincial governments. The Sustainable CAP replaces the Canada Agricultural Partnership (CAP), which ended March 31, 2023.

Sustainable CAP focuses on the five key priority areas:

Building sector capacity, growth and competitiveness
Climate change and environment
Science, research and innovation
Market development and trade
Resiliency and public trust

The renewed federally funded programs to support sector growth under Sustainable CAP were launched on March 6, 2023. Details and applications are available online for AgriAssurance, AgriCompetitiveness, AgriDiversity, AgriInnovate, AgriMarketing and AgriScience.

These are cost-shared programs where the governments of Ontario and Canada contribute a portion of the total project cost and the applicant contributes the remaining amount. Visit the provincial government website for details on funding opportunities.

Ward & Uptigrove can assist with applications under the Business Analysis category (Financial Analysis and Business Plans). For all other applications, we have referral sources.

For more information on any of these programs or initiatives, we encourage you to talk to your accountant.

Agricultural Credit Corporation (ACC) update

In 2022 the Government of Canada announced an increase to the interest-free limit of the Advance Payments Program from $100,000 to $250,000 for the 2022 and 2023 program years. In May 2023, it was announced that the interest-free limit of the Advance Payments Program will be increased from $250,000 to $350,000 for the 2023 program year, effective May 8, 2023. The Advance Payments Program provides producers with cash advances up to $1 million. The increase in the interest-free limit will provide additional interest savings and cash flow to producers. Further information on the Advance Payments Program and other loan programs offered by ACC can be found here , or contact your accountant.

Canada Emergency Business Account (CEBA) loans

The CEBA loan forgiveness repayment deadline is approaching. Loans are to be repaid before December 31, 2023 to be eligible for the forgivable portion. The entire non-forgivable loan balance ($30,000 if a $40,000 loan was received or $40,000 if a $60,000 loan was received) must be repaid to retain the forgivable portion. Loans not repaid by December 31, 2023 will be converted to a two-year 5% term loan as of January 1, 2024. The term loan will require interest only payments with the full principal due December 31, 2025.

Does This New Law Apply to My Business?

Employment law is a continually evolving field with new legislation and regulations introduced constantly. Information on the Internet can be misleading and confusing. Understanding which laws apply to your business and where there may be exemptions and special rules will help you optimize your operations, while at the same time treating your employees fairly. Before you make a significant change to your HR practices, contact us for tips. Click here for our guide to five key areas of employment legislation: employment standards, health and safety, human rights, workplace safety insurance and pay equity.

If you are a business operating in Ontario, Provincial employment legislation will apply to your business. However, if your business is in a federally regulated sector, federal legislation will mostly apply. Click this link to see if your business might be federally regulated.

Psychology of Selling Your Business

Whether you’re an established business proprietor, a generational business owner, or an entrepreneur, you've put your heart and soul into building your company. Still, there comes a time when you need to move on, and that's where selling comes in. However, it's more than finding the right buyer and negotiating the best price or contract terms. Many owners, like you, find themselves struggling with a deep-seated reluctance to sell, which can be hard to understand and even harder to overcome.

You may have invested so much time and energy into your business that it's become a part of you. Or there are family issues that are holding you back. Whatever the reason, it's essential to recognize that this reluctance is not uncommon, and it's perfectly normal to feel this way.

You may find yourself delaying the acceptance of a fair offer, stalling the process, declining, or otherwise sabotaging the deal without really understanding why. You may think it just didn’t “feel right”, the buyer wasn’t the right fit, or you convince yourself you’re not ready. Perhaps it is one of these reasons, but often this is not the case.

The psychology of selling your business

Selling a business that has been painstakingly created, nurtured, and struggled with, and one that is ultimately successful, is akin to a child leaving home to take on the world for themselves. For owners like you, a business can be like having a child. Whether you’ve conceived the business from an idea, inherited the family business, or purchased an established enterprise, you’ve put your blood, sweat, and tears into your business to make it successful.

Like new parents, you can often feel nervous, unprepared, and overwhelmed, having never done this before. Regardless, you push through as the reward and satisfaction far outweigh the fear; the effort is fulfilling and long-lasting. Over the years, you’ve spent many hours cultivating and nurturing the business, celebrating its successes, and watching it grow into a successful, independent, self-reliant enterprise that is ultimately valuable to the world.

You and your business struggled together, overcame obstacles in the face of adversity, stumbled, got back up, and learned and grew through it all. Like a baby, you initially carried the business when it could not carry itself. Over time, your business grew and found its legs and rhythm. As your business matured, it became important to others – clients, staff, suppliers, and, most importantly, you. Like a child, the business gained independence over time and needed you less and less, becoming an entity unto itself. You no longer manage every aspect of the enterprise, coddle it, and protect it. Your business has become a thriving entity that can stand on its own.

Letting go of what you or your family created, nurtured, and grew is often very difficult. Like a child, you are proud of what it has become but still worry about what might happen if you let it go. Will it be okay without you? Will it be damaged if you are not there to protect it? Will it even survive if you are not guiding it in the future?

With business, as with children, you reach the point where you have done everything you can to prepare it for the world, and you must let go. Let it move on. Let it continue its evolution, whatever that may be.

Considering a different perspective about the sale of your business and understanding the emotions you may be experiencing often helps you conquer the reluctance of finalizing the sale. Selling is a very difficult time for many business owners, which could result in a lost opportunity to monetize your lifelong achievements if you can’t overcome this obstacle.

How we can help

Work with your trusted accounting and financial advisors under our TriCert™ integrated approach. We specialize in owner-managed businesses to help you overcome many psychological hurdles of selling your business.

Leveraging the experience of accountants and tax specialists, and integrating these advisory services with your financial planner, can give you the peace of mind and the confidence to work through one of the most significant events in your lifetime with a strong team supporting you every step of the way.

IAIC Weekly Market Update Changes

Clients of Ward & Uptigrove Wealth Management and Independent Accountants’ Investment Counsel (IAIC) have been receiving weekly market updates, courtesy of IAIC. The weekly market update will be discontinued effective July 1. In its place, IAIC will be releasing informative and timely podcasts on a weekly basis. You can find all previous podcast episodes here .

Need Help? Contact a Ward & Uptigrove Wealth Management Representative.

519-291-3040 or email info@w-u.on.ca .

Podcast Announcement

Ward & Uptigrove is excited to announce the release of their first podcast episode. Designed to bring you timely, educational and relevant information, the Ward & Uptigrove podcast, “ Integrating for Success ” will be released twice monthly until further notice.

The first episode delves into compensation trends for veterinarians, an ever evolving and challenging landscape. HR Advisor and member of the W&U Veterinary Consulting group, Leah Frizzle, CHRP joins us to talk about some of the trends she’s seen emerge as part of her consultations with veterinary practice owners. This episode is sure to interest our veterinary clients, as well as anyone struggling to hire in a competitive market.

Integrating for Success can be found on any podcast streaming platform, including but not limited to Spotify , Apple Podcasts , Amazon Music , and iHeart. You may also listen on our website . Follow the podcast on your favourite streaming platform to be the first to know about new episode releases, or sign up on our website so you don’t miss an episode.

Staff Updates

We are proud to congratulate the following staff members on their development and progression into new roles.

Agriculture Department

Progressions

Business Department

Progressions

Tax Department Progressions

Welcome!

We are thrilled to welcome the following new staff members to our team:

Have a Wonderful Summer

from the Partners and Staff of Ward & Uptigrove

IAIC Market Update - June 26, 2023

2023-06-27T12:46:28Z

Last Week in the Markets: June 19th – 23rd, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Last week was not a great week for the markets. The major equity indexes, domestically and continentally, lost ground. The TSX almost erased its 2023 positive gains by dropping nearly 3%, while U.S. equities dropped about 1½% collectively.
A positively correlated indicator for economic health is retail sales. In April, Canadian retail sales grew 1.1%, and excluding gasoline stations, fuel vendors, vehicles, and parts, the increase was 1.5%. Core retail sales have increased in each of the past five months.

Source: Retail Trade

What’s ahead for this week?

In Canada, the Consumer Price Index for May, which could foreshadow interest rate adjustments from the Bank of Canada, and imports, exports and trade balance will be reported.
In the U.S., durable goods orders, building permits, new home sales, consumer confidence, and monthly home price index. The Federal Reserve’s most important inflation indicator, Personal Consumption Expenditures (PCE) will be reported on along with Gross Domestic Product for the first quarter.
Globally, the Eurozone will announce the latest business climate, industrial and economic sentiment, and consumer confidence data. No major announcements are scheduled from China or Japan, the second and third largest economies.

IMPORTANT NOTICE

IAIC will no longer publish the Weekly Market Update effective July 1, 2023.
On a weekly basis, IAIC publishes a podcast series that keeps our clients up to date on current events and that communicates our investment philosophy.
We encourage you to listen to IAIC’s In Focus podcast series , and if you have questions, contact your Advisor or Portfolio Manager.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc. All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics. No guarantee of outcome is implied and opinions may change without notice. Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein. Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

IAIC Market Update - June 19, 2023

2023-06-20T00:43:51Z

Last Week in the Markets: June 12th – 16th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Markets moved ahead broadly last week, as North American and global equities positively interpreted two significant and related announcements on inflation and interest rates.
On Tuesday, the U.S. Bureau of Labor Statistics reported consumer inflation for May. The Consumer Price Index (CPI) rose 0.1% during the month after increasing by 0.4% in April. The year-over-year inflation rate dropped significantly to 4.0% after sitting at 4.9% at the end of April. The annual rate of inflation fell for the 11th consecutive month.
On Wednesday the Federal Reserve released its latest monetary policy. For the first time in the last 11 interest rate announcements, rates were unchanged. Since inflation remains well above the 2% target, nearly all of the Fed Governors believe that additional rate hikes will be necessary, suggesting that the pause on June 14th is only temporary. The Bank of Canada had increased rates at 8 consecutive meetings, then paused in March and April, and then raised rates by ¼% on June 7th. Domestic and international inflation and monetary policy guided the Canadian central bank’s return to rate increases. Inflation and interest rates elsewhere are less influential for the Federal Reserve.
Additionally, on Friday the Eurozone released year-over-year inflation information for May with the Consumer Price Index at 6.1%, down from 7% in April.
This news positively affected American equities most with NASDAQ and S&P500 gaining 3¼% and 2½%, respectively. The Dow topped a 1% gain for the week, while the TSX rose less than ½%.

Source: Consumer Price Index Summary, BoC Release , NYTimes & Fed, Euro Area Inflation Rate

What’s ahead for this week?

In Canada, producer and raw materials prices and inflation, new housing price index, retail sales, federal government budget balance, and the Bank of Canada’s deliberations from its interest rate decision of June 7th will be released.
In the U.S., after a busy week last week with an inflation and interest rate announcement, indicators will focus on housing with building permits, housing starts, existing home sales scheduled for release.
Globally, consumer and producer inflation data will be released for the U.K. just prior to a Bank of England interest rate announcement. The European Central Bank will conduct a General Council Meeting. Japan will report its industrial production and capacity utilization and release monetary policy meeting minutes from the Bank of Japan.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

RESPs & Grandparents

2023-06-13T14:46:10Z

The cost of university has risen sharply , and so has the importance of graduating with a desired and marketable set of skills and knowledge. Without a post-secondary education, employment and life opportunities are more limited now than ever before. Contributing to a grandchild’s education helps them and their parents, and helps you stay connected in a meaningful way.

Most grandparents are unaware that the total cost of a year at a Canadian university in 2023 is about $25,000, or $100,000 for a four-year degree. This includes tuition, books, supplies, residence/housing, and meals, travel and a $125 hoodie for their university, faculty or program.

Registered Education Savings Plans (RESPs) began in 1998, so the children of new/future grandparents were likely too old to participate fully.

If you want to conscientiously pass wealth between generations and help minimize your children’s and grandchildren’s debt in the future, opening and contributing to an RESP on behalf of your grandchildren is an excellent option.

What you need to know

The basics of an RESP are:

A grandparent can be a “subscriber,” and the future student is the “beneficiary” of an RESP
The lifetime contribution limit is $50,000 for each beneficiary (i.e. grandchild)
There is no limit to the number of RESPs that a beneficiary can have, but they cannot exceed their lifetime limit of $50,000 without penalties being incurred
Canada Education Savings Grants (CESG) with an annual maximum of $500 (equal to 20% of the contribution) have a lifetime limit of $7,200
Many subscribers deposit $2,500 each year, to maximize the CESG each year
Canada Learning Bond (CLB) for colleges, CEGEPs and apprentice programs that could be $500 in the first year and $100, thereafter
Funds can be invested in a number of different vehicles and grow tax-free, like an RRSP
Money is paid out as an Educational Assistance Payment (accumulated gains and grants) are taxed in the hands of the beneficiary. The beneficiary/student typically pays little or no income tax with their education-based deductions and tax credits, and lower income.
The principal is returned to the subscriber as “return of capital” without any tax implications and is typically delivered to the student as part of the accumulated savings.

If you’re concerned about your children funding post-secondary education for your grandchildren, contributing to an RESP on their behalf is an excellent solution. Invest in your grandchildren’s dreams!

Have Questions?

Contact a Ward & Uptigrove Wealth Management representative at 519-291-3040 or email info@w-u.on.ca

IAIC Market Update - June 12, 2023

2023-06-13T00:00:30Z

Last Week in the Markets: June 5th – 9th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Canada’s TSX was the only major North American equity indexes that lost value last week. It fell about 1% behind the performance of its U.S. peers, who each made modest gains below ½%.
On Wednesday morning the Bank of Canada raised its policy interest rate by 25 basis points (¼ percent). The target for the overnight rate rose to 4¾%, the Bank rate to 5% and the deposit rate to 4¾%. In the press release The Bank stated:

“Globally, consumer price inflation is coming down, largely reflecting lower energy prices compared to a year ago, but underlying inflation remains stubbornly high. While economic growth around the world is softening in the face of higher interest rates, major central banks are signalling that interest rates may have to rise further to restore price stability.”

Next week the Federal Reserve, the U.S. central bank, has a monetary policy update scheduled for Wednesday, June 14th. The action this week from Canada is anticipating an increase from the Fed, and our increase is intended to address the recent uptick in our inflation rate and protect the Canadian dollar’s value. Additionally, the European Central Bank will make its next interest rate decision on June 15th.

Source: Bank of Canada Press Release , CBC: Bank of Canada Rate Decision

What’s ahead for this week?

In Canada, a light week for economic releases with housing starts manufacturing and wholesale sales, and investment inflows scheduled.
In the U.S., a much heavier week for announcements is planned with retail sales, import/export inflation, consumer inflation, producer inflation, industrial production, capacity utilization, and business inventories on the calendar. The upcoming interest rate announcement from the Federal Reserve will be the most influential release of the week and, likely, the month.
Globally, inflation numbers will be released in the Eurozone, specifically Italian and French consumer and import/export inflation, and overall EU industrial production.

Source: Upcoming Interest Rate Announcement

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - June 5, 2023

2023-06-05T16:11:59Z

Last Week in the Markets: May 29th – June 2nd, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

U.S. markets were closed on Monday for Memorial Day, but that did not stop equities from receiving a much-needed boost as May concluded and June began. The surprising laggard among North American equity indexes was the NSADAQ that gained only 1% on Friday, while the others rose 1½ to 2%. Both the TSX and the S&P 500 had been down for the week until Friday’s rally. So far this year and over the past year the NASDAQ has delivered the highest returns of the major indexes.
Avoiding a default on U.S. government debt was a leading reason for wide-spread growth in share values last week. A deal had been agreed between House Leader McCarthy and President Biden prior to Monday’s Memorial Day. Despite deep criticism from both Democrats and Republicans, it received bi-partisan approval in the House and the Senate and was then signed into law. A 2-year extension on the debt ceiling was achieved in exchange for spending and taxation reductions.
Secondly, on Friday morning, the latest U.S. jobs data was announced. Employment grew by 339,000 in May, and the unemployment rate rose 0.3% to 3.7% as the number of unemployed persons grew by 440,000 to 6.1 million.
The on-going growth in jobs in Canada and the U.S. has confounded the Bank of Canada and Federal Reserve. Increasing interest rates to lower demand is less effective when job growth is robust. Jobs growth makes a recession less likely but could lead to additional interest rate increases to slow inflation.

Source: Debt Ceiling Agreement , Employment Situation Summary

What’s ahead for this week?

In Canada, the most significant news will likely arrive from the Bank of Canada when it announces its latest interest rates on Wednesday morning. A pause in rate hikes has been in-place, and the mid-week release will demonstrate whether The Bank believes that it has struck the right balance between slowing demand-fueled inflation, but not slowing the economy into recession. Friday’s employment numbers will also provide insight into the health of the Canadian economy.
In the U.S., durable goods, factory orders, mortgage market index, wholesale sales and inventories will be released. On June 14th the Federal Reserve is scheduled to release its next interest rate announcement, and it will be heavily anticipated and closely watched since its influence on markets could be very strong.
Globally, the Eurozone will report its retail sales, imports, exports and trade balance and employment, unemployment, and wages. China will report consumer inflation and employment data.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Changes to Mandatory Working at Heights Training Requirements

2023-05-31T22:15:01Z

On May 17, 2023, Ontario announced changes to the training requirements for working at heights.

The province has updated both the program and provider standards for mandatory working at heights training, noting that falling from heights is one of the leading causes of workplace fatality in a number of industries including construction.

Currently, workers on construction projects who use fall protection devices must undergo a working at heights training program that is approved by the Ministry of Labour and delivered by an approved training provider. The training requirements for working at heights are set out in O. Reg. 297/13: Occupational Health and Safety Awareness Training.

The key changes to the program standard include:

additional learning outcomes, including with regard to ladders, skylights and damaged equipment
additional requirements for personal protective equipment
other changes to foster more inclusive engagement in the training

Changes to the provider standard include updates to instructor requirements and the promotion of social inclusion and anti-racism.

These changes were announced as an investment of $12.5 million in Ontario’s health and safety associations, which provide safety training and resources to Ontario workers and businesses.

The changes to the Working at Heights Training Program Standard and the Working at Heights Training Provider Standard will come into effect on April 1, 2024. Current training programs will remain valid until that date. Workers with valid working at heights training will not be affected.

Have Questions?

Contact a Ward & Uptigrove Human Resources representative at 519-291-3040 or email info@w-u.on.ca

IAIC Market Update - May 29, 2023

2023-05-29T15:24:09Z

Last Week in the Markets: May 22nd – 26th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The TSX and major U.S. corporates (i.e., Dow Jones Industrial Average) lost ground last week. The 2½% gained last week, and the 24% year-to-date, and 10½% over the past 12 months has placed the NASDAQ far into the lead compared to its North American rival indexes.
The deadline of early June, where the U.S. government will run out of cash and be unable to meet its debt obligations is quickly approaching. It appears that a 2-year deal has been tentatively reached between President Biden and House Leader McCarthy. Once the 150-page deal is finalized it will have to pass through the U.S. Senate and House of Representatives and receive Biden’s signature before it becomes law. The reaction for equities is still uncertain since the U.S. Treasury will need to replenish is cash reserves, which could pull capital away from stocks and temporarily, at least, place downward pressure on share prices.
Additionally, the Federal Reserve released its meeting minutes from the most recent interest rate decision on May 3rd that showed officials were divided on whether further interest rate increases were required. Their next opportunity to adjust rates to respond to inflation, employment and economic growth is scheduled for June 14th. The Bank of Canada will announce its interest rate plans on June 7th.

Source: CNN and Debt Ceiling , CNBC and Debt Ceiling, Federal Reserve Meeting Minutes

What’s ahead for this week?

In Canada, first quarter Current Account, Gross Domestic Product for March, and year-to-date and manufacturing Purchasing Managers Indexes (PMI) will be released.
In the U.S., Monday has American markets closed for Memorial Day. Starting on Tuesday the Conference Board will release consumer confidence information, ADP will release its payroll report ahead of the U.S. Depart of Labor’s weekly unemployment claims and the Bureau of Labour Statistics monthly jobs report.
Globally, Japan will release its jobs data, and its industrial production, consumer confidence and retail sales, while China will report several PMIs. The Eurozone will announce business climate, consumer confidence, services and industrial sentiment and inflation expectations. The European Central Bank will release its Financial Stability Review.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

The Psychology of Selling Your Business

2023-05-26T14:13:42Z

The Psychology of Selling Your Business

How We Can Help

Have Questions?

Contact a Ward & Uptigrove Wealth Management representative at 519-291-3040 or email info@w-u.on.ca

IAIC Market Update - May 23, 2023

2023-05-24T12:29:55Z

Last Week in the Markets: May 15th – 19th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

It was a strong session for investors in U.S. equities, and the TSX was the only index that lost value. For the fourth consecutive week the NASDAQ bested the other major equity indexes. The gain of more than 3% in one week for the NASDAQ was nearly double the performance of the S&P 500, and well beyond the respectable, yet small, increase of the Dow.
On Tuesday the latest consumer inflation data was released by StatsCan. In April the Consumer Price Index (CPI) rose 4.4% on a year-over-year basis, just slightly above the same figure for March, which was 4.3%. On a monthly basis prices increased by 0.7% in April, above March’s one-month inflation of 0.5%. Gasoline, groceries, rent, and mortgage interest were the largest contributors.
The debt ceiling negotiations continue in the U.S. without resolution. President Biden has warned, “I can’t guarantee that they (Republicans) will not force a default by doing something outrageous”. Republicans would like significant reductions in government expenditures in exchange for an increase in the borrowing limit. Growing sentiment is that neither side will be able to escape blame should a default occur. The deadline to avoid a cash shortfall is approaching quickly, and President Biden and House Leader McCarthy had an in-person meeting scheduled for 5:30 pm on Monday. Honouring its debts by avoiding a default is necessary for the American, North American, and global economies.

Source: StatsCan CPI Release, Debt Ceiling Discussion , U.S. Debt Ceiling Standoff

What’s ahead for this week?

In Canada, after Monday’s celebration of Victoria Day, when markets were closed, another light week for economic announcements will occur with wholesale and manufacturing sales, the federal government’s budget balance and the raw materials price index scheduled for release.
In the U.S., building permits, pending home sales, new home sales, durable goods orders, Gross Domestic Product, and April’s Personal Consumption Expenditures (PCE) will be reported before Memorial Day is observed on May 29th. Also, the meeting minutes from the Federal Reserve’s latest interest rate announcement on May 3rd will be published.
Globally, Eurozone consumer confidence, manufacturing and services Purchasing Managers Indexes, and a European Central Bank (ECB) meeting are scheduled. The Bank of Japan will release its inflation indicator and the Bank of China will announce its prime rate.

Source: Federal Reserve’s Meeting Minutes

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - May 15, 2023

2023-05-15T17:38:13Z

Last Week in the Markets: May 8th – 12th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

On Wednesday the Bureau of Labor Statistics released the latest Consumer Price Index (CPI) data showing that household purchases rose by 4.9% on a year-over-year basis and by 0.4% in April after rising 0.1% in March. The most recent monthly price increases were led by shelter, used vehicles and gasoline. Overall, the energy index rose 0.6% for the month, and food prices in the aggregate were unchanged.
The U.S. Producer Price Index (PPI) rose 0.2% in April after falling 0.4% in March and was unchanged in February. On an annualized basis producer prices rose 2.3% for the twelve months ending in April. Year-over-year producer prices have fallen each month over the past year from a high of 11.2% in April 2022.
China’s consumer prices rose 0.1% in April, after rising 0.7% in March, and its year-over-year inflation rate is 1%. China’s PPI fell 3.6% compared to April 2022. China's inflation for consumers and producers are significantly lower than the United States, who has seen 10 consecutive interest rate increases and has brought U.S. CPI down to 4.9%.

Source: BLS CPI Release, BLS PPI Release, China’s inflation

What’s ahead for this week?

In Canada, new housing price index, housing starts, manufacturing sales, wholesale sales, and retail sales will be reported.
In the U.S., a variety of indicators for April showing the health of the economy will be reported, including retail sales, capacity utilization, industrial and manufacturing production, business, and retail inventories, building permits, housing starts, and existing home sales.
Globally, the Eurozone will announce its first quarter Gross Domestic Product (GDP) and trade balance and its consumer inflation for April and year-over-year. China is scheduled to release its industrial production, retail sales and unemployment rate for April. Capacity utilization and industrial production, imports, exports and trade balance, and CPI will be reported by Japan.

Source: Eurozone

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - May 8, 2023

2023-05-08T17:56:25Z

Last Week in the Markets: May 1 ^st – 5 ^th , 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

North American equity indexes lost value from Monday to Thursday before rallying on Friday when the TSX rose 1½% and the NASDAQ jumped 2¼% with the S&P 500 and Dow both improving by about 1¾% final day of the week. The losses had been about 2-3% prior to Friday’s rally.
Friday also brought the latest Canadian employment data from StatsCan. Employment rose by 41,000 in April, all in part-time work. The unemployment rate has been unchanged since December 2022 and remains at 5.0%. The slowing of full-time employment growth is a result of prior monetary actions undertaken by the Bank of Canada to temper demand.
Linked to employment and current rounds of interest rate increases, the U.S. is lagging behind Canada. On Wednesday the U.S. Federal Reserve raised interest rates by ¼ percent (25 basis points) to a range of 5% to 5¼% for the federal funds rate. In the press conference that followed the interest rate announcement, Fed Chair, Jerome Powell, indicated that the timing of a rate-cut was not known, and that the current conditions do not favour a reversal of the current path.
On Thursday the European Central Bank (ECB) raised its benchmark interest rates by the same amount ¼ percent (25 basis points). Price stability (controlling inflation) is the primary goal of the ECB’s interest rate policy, just as it is for the Bank of Canada and Federal Reserve. All three institutions have a 2% target inflation rate as their goal.
The next opportunity for the ECB, Bank of Canada, and Fed to adjust its monetary policy is scheduled for June 5th, June 7th, and June 14th, respectively. Several weeks will elapse before the opportunity for monetary policy from these three bodies to further align arrives.

Source: StatsCan release , Fed release , CNBC and Fed decision , ECB release

What’s ahead for this week?

In Canada, a very light week for economic announcements brings March’s building permits on Wednesday, and not much else of note.
In the U.S., wholesale inventories and sales, and monthly and year-over-year Consumer Price Index (CPI), Producer Price Index (PPI), and Import and Export Price Indexes will describe the inflation situation for Americans and American firms.

Globally, China will release its CPI and PPI, and imports, exports, and trade balance. In Europe, France and Germany will reveal their consumer inflation.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - May 1, 2023

2023-05-01T16:38:24Z

Last Week in the Markets: April 24th – 28th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The rally for equities during the second half of last week erased early losses. U.S. equities fared better than Canada’s TSX, which lost ¼ percent.
The Bank of Canada released a Summary of Governing Council Deliberations leading to its monetary policy announcement of April 12th. The major factors contributing to the decision to hold rates steady are the international economy, and domestic economic developments and the outlook for inflation. The summary provides insight to both the process of the Bank’s analysis and the depth. It also highlights that these decisions cannot be based solely on the situation in Canada, and the U.S. is a major influence.
Two key economic indicators were released last week in the U.S., Gross Domestic Product (GDP) and Personal Consumption Expenditures (PCE) price index. Total economic output, GDP, grew at an annualized rate of 1.1% for the first quarter of 2023, which is below most estimates. GDP grew at a rate of 2.6% in the final quarter of 2022, and the 2.1% for all of 2022.
PCE, which is the Federal Reserve’s preferred indicator for inflation rose 4.2% in March, down from February’s 5.1%. The current period exceeded estimates of 3.7%.

Source: Governing Council Deliberations

What’s ahead for this week?

In Canada, March’s imports, exports and trade balance, and a number of Purchasing Managers Indexes for April will be reported. On Friday the jobs report for April will be released, which will show employment, unemployment, wages for the most recent period.
In the U.S., construction spending, durable goods production, factory orders, trade balance, and an extensive array of Purchasing Managers Indexes are scheduled. The most important announcement for the week will occur on Wednesday afternoon when the Federal Reserve releases its monetary policy announcement.
Globally, many markets will be closed on Monday for Labour Day (also known as May Day). Eurozone consumer inflation will be released on Tuesday, along with several individual nation’s inflation numbers. Employment data for the Eurozone will also be announced, which will be followed by a European Central Bank interest rate announcement.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Dealing with Down Markets

2023-05-01T12:47:34Z

Staying Calm When Markets are Volatile

Why Avoiding Short-Term Performance Figures Can be a Sound Strategy

In times of economic turbulence, it’s normal to feel apprehensive when you’re about to read your portfolio’s performance. And, of course, seeing the fluctuating short-term results doesn’t help. It is more important to keep your sights on the bigger picture and stay focused on your long-term investment strategy and performance. By doing so, you can navigate the choppy waters of the current economic climate more confidently and ultimately achieve your financial goals.

Typically, volatility is a short-term issue; in the long run, your long-term investment plan and confidence in your investment holdings matter. Therefore, avoiding short-term “noise” can be a good strategy. While performance is undoubtedly crucial, it should be evaluated in years, not months.

For example, take a look at it in graph terms:

The short-term view

S&P/TSX Composite Index down 6.36% over the past 1 year

The long-term strategy

S&P/TSX Composite Index up 26.24% over the past 5 years

Strategies for navigating market volatility

The performance figures can be an unpleasant surprise, depending on the period you are looking at or the duration being reported on your account statements.

Consider:

1.Evaluating the quality and long-term sustainability of your investments with your portfolio manager. It’s likely that your holdings are still reasonable, and no drastic changes are necessary. You may come across opportunities to refine your portfolio, but try to refrain from making significant “panic changes” that could lead to missing out on future market recoveries.

2. Updating or creating a financial plan. It’s crucial to take this step during market downturns as it can provide reassurance that your long-term financial goals are still achievable. Our experience has shown that personal financial plans often remain on track despite market downturns. Take advantage of this opportunity to update your plan and gain some much-needed reassurance.

3. Triggering a capital loss strategically if you have non-registered accounts. This can help offset a realized capital gain if you plan to sell an asset, or if you need cash or want to diversify your holdings.

4. Lowering the risk profile of your account permanently only if you cannot tolerate market volatility anymore. It may involve selling some holdings at a less-than-ideal time, but taking a hit now could be easier for you in the future. However, this should be considered a final, one-way option.

New Paragraph

Reframe your perspective

Imagine thinking about your investment portfolio as if it were your own home. This relatable comparison can help you weather market downturns with greater ease.

Unlike your monthly investment statement, you don’t receive regular updates on your home’s value nor see real estate index numbers fluctuating in real time. This lack of daily stress means that when the value of your home drops, you don’t immediately consider selling it. After all, your home is a long-term investment and a significant part of your net worth.

Similarly, selling off your stocks doesn’t make sense just because the market is down. Likewise, jumping out of the market and buying back once values have risen is not a sound strategy. Instead, stay the course and trust in your long-term investment plan.

Bottom line – We will always have periods of volatility. It’s important to keep calm and avoid knee-jerk reactions that may jeopardize your long-term plan. Review your portfolio and strategies with your Accountant, Financial Planner and Portfolio Manager and gain the confidence you need to stay the course.

Have questions?

Send us a message.

IAIC Market Update - April 24, 2023

2023-04-24T15:19:58Z

Last Week in the Markets: April 17th – 21st, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Canada’s TSX was the only major North American index to gain ground last week. Its rise of ½% may be modest compared to some week’s gains and losses, but it outpaced its continental rivals, and all other indicators in the grid, above.
On Tuesday StatsCan released consumer inflation numbers that showed prices have risen 4.3% in the March-to-March timeframe. One month earlier the year-over-year inflation rate was 5.2%. Much of the decline in this March’s annualized inflation rate can be attributed to the steep monthly price increases experienced in March 2022, which were 1.4%. In March 2023 consumer prices rose 0.5%. Last month food prices rose 8.9%, shelter increased by 5.4%, health and personal care rose 6.5%, while gasoline fell by 13.8%.
On Thursday Tiff Macklem and Carolyn Rogers, Bank of Canada Governor, and Senior Deputy Governor, respectively, testified in Ottawa. The central bankers indicated that rate cuts are not expected in 2023, and a slowdown, not a recession, is expected in Canada. Some concern was expressed that further increases to government spending could contribute to inflation as the public service strike continues, and 150,000 federal workers seek higher wages. The robust job market could continue to fuel inflation, which could also delay interest rate cuts or lead to rate increases. The Bank of Canada’s overall view is that inflation will come under control and the economy will experience a soft landing. Several months will need to pass before we know whether this prediction has become reality.

Source: StatsCan's CPI release , Inflation Soft Landing , CBC's take on BoC testimony

What’s ahead for this week?

In Canada, February’s Gross Domestic Product data, and March’s new housing price index, wholesale sales, and manufacturing sales are scheduled for release. Also, the Bank of Canada will release its summary of deliberations from the last interest rate decision.
In the U.S., the house price index, new home sales, mortgage market index and pending home sales will provide insight to the housing market for March. Consumer confidence, durable goods orders, along with Q1 Gross Domestic Product and Personal Consumption Expenditure (PCE) price index, the Federal Reserve’s preferred inflation measure, will also be reported.
Globally, Japan will release a number of economic indicators including its Consumer Price Index, industrial production, retail sales and unemployment. In the Eurozone, German and French consumer confidence and spending, consumer inflation and Gross Domestic Product numbers will be released.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - April 17, 2023

2023-04-17T15:59:57Z

Last Week in the Markets: April 10th – 14th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Markets moved higher last week, except for gold. North American equity indexes all rose with the TSX leading with a nearly 2% increase. The Canadian dollar also added another 1% in value, as oil and Canadian bond rates also improved.
The Bank of Canada released its interest rate decision on Wednesday morning and decided that no adjustments were needed at this time, holding the benchmark interest rate steady at 4½%. The plan to pause interest rates had been announced and enacted at the last interest rate announcement back on March 8th. The continuation of ‘the pause’ was predicated on demand slowing, inflation tempering, wage rises moderating, and Gross Domestic Product growth easing, which would demonstrate that domestic and international monetary action was affecting appropriate change.
Evidence that consumer inflation was slowing was delivered from the U.S. on Wednesday morning with news that the Consumer Price Index (CPI) had settled back to a year-over-year rate of 5.0% for March after a modest 0.1% increase during that month. On Thursday the U.S. Producer Price Index (PPI) continued the trend by declining to 2.7% per year and by 0.5% in March.
Increasing results in the fight against inflation suggests that future interest rate increases from the Federal Reserve may be smaller.

Source: March 8 announcement, CPI, PPI, CNN, US inflation and the Fed

What’s ahead for this week?

In Canada, the Consumer Price Index report for March will be released on Tuesday, followed by the Industrial Producer and Raw Materials Price Indexes on Wednesday. Retail sales and housing starts are two more important indicators on the calendar.
In the U.S., a relatively light week for announcements includes building permits, housing starts, existing home sales, National Association of Home Builders housing market index, and manufacturing and services Purchasing Managers Indexes.
Globally, inflation news continues as the Eurozone is scheduled to release its CPI (along with Italy and Germany’s PPI) and consumer confidence. China will report its GDP and industrial production for the first quarter.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - April 10, 2023

2023-04-10T16:31:43Z

Last Week in the Markets: April 3rd – 7th, 2023*

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

*TSX, S&P500, Dow and NASDAQ, Govt CAN bond closing figures as of April 6, 2023 due to exchange closures on Good Friday, April 7th

What happened last week?

The week concluded with the closure of North American exchanges for Good Friday observances. While markets were closed, the latest U.S. employment numbers were released by the Bureau of Labor Statistics. The unemployment rate remained unchanged as 236,000 jobs were added, which is close to estimates, but well below the 326,000 jobs added in February. It is also the lowest monthly gain in jobs since December 2020. Leisure and hospitality, government and professional, business services and healthcare sectors contributed to the majority of the gains.
Prior to the jobs announcement the major indexes delivered mixed results with the TSX and Dow advancing by ½%, the NASDAQ losing 1% and the S&P 500 essentially breaking even during four days of trading. Since the beginning of 2023 these indexes are all in positive territory with NASDAQ leading the pack at nearly 17%, trailed by the S&P 500 at 7%, the TSX at 3½% and the Dow with a slight gain. The technology-heavy NASDAQ also leads in 1-year losses at minus 14%, with the other indexes also needing to gain significantly to erase losses suffered over the past year after losing 8%, 9% and 4% for the TSX, S&P500 and Dow, respectively.
The near-term prospects for equities will hinge on the inflation, associated interest rate and monetary policy action, and the fear of a recession from the slowing economic activity.

Source: Bureau of Labor Statistics , CNBC and Jobs

What’s ahead for this week?

In Canada, an interest rate decision, monetary policy report and rate statement is scheduled for Wednesday morning from the Bank of Canada. Tiff Macklem, Bank of Canada Governor, has previously indicated that the central bank plans to pause interest rate increases.
In the U.S., wholesale inventories and trade sales, mortgage market indexes, and fuel inventories (heating oil, gasoline, crude oil) precede inflation reports. On Wednesday the Consumer Price Index (CPI) will be released, Thursday brings the Producer Price Index and Friday includes the Import and Export Price Indexes.
Globally, the International Monetary Fund (IMF) will conduct a series of meetings. Retail sales and industrial production will be released for the Eurozone. China will report its consumer inflation and Japan will release its producer inflation next week, providing a glimpse of price increases and, perhaps, upcoming monetary policy in Asia.

Source: Tiff Macklem previous statement

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

What Happens if You Die Without a Will

2023-04-06T14:10:30Z

Most of us know that having a will is important, but statistics show that what we know about wills and the action we take with wills are very different. According to a survey conducted by CIBC in 2013, more than half of Canadians die without a will.

If you die without a will in Canada it is referred to as dying in ‘intestacy’. When you die intestate, it is up to government legislation to handle your affairs. Below are some points that should be seriously considered before deciding against a will and how you could expect the estate will be distributed according to the current rules of intestacy.

Anyone who has assets, debts, or dependents should have a will. Most everyone wants their family to be looked after when they die. By not leaving a legal will behind, your family may not be cared for appropriately. Death takes a huge emotional toll on a family and not leaving a valid will can make things a lot worse.

Below are some considerations for your estate if you do not have an up to date will. While this list is by no means exhaustive, these points should be carefully considered before deciding against a will:

Depending on the province, common-law partners may not be entitled to the estate as per the rules of intestacy.
When individuals die in intestacy, an application must be made to the courts in order to appoint an estate administrator. Therefore, the deceased forfeits the opportunity to appoint an executor of their choosing.
Even if you have a valid will, it is possible to die in ‘partial intestate’. Dying in partial intestate means that for some reason your will does not deal with the whole estate or a segment of your will is considered invalid.
While everyone likes to think that their family would peacefully and fairly distribute their assets, this is usually not the case. Money has a way of bringing out an ugly side in people. Having a will can prevent this conflict and ensure everyone is treated fairly.
Estate litigation can be very expensive for your family.
There is no opportunity to select guardians for any minor children.
Most provinces recognize posthumous birth under their intestate rules. Any children conceived before death and born after death are considered to have been alive during the deceased’s lifetime.
Due to the laws of intestacy your spouse could end up with significantly less then intended, therefore they may not be able to maintain their lifestyle.
There will be no outlined plan for dealing with any taxes or capital gains that may arise from your death.
There will be no opportunity for charitable giving at your death.

Distribution of your estate

If an individual chooses not to leave a will behind, then the estate is distributed according to regulations set forward by provincial legislation. Every province has its own legislation for their intestate rules. It is important to be familiar with the rules in your province. The distribution is dependent on a variety or marital/family situations. Typically, each scenario unfolds as follows:

Surviving Spouse, No Children
In situations where the deceased has a surviving spouse but no children, the entire estate is passed to the spouse.
Surviving Spouse, Surviving Children
Preferential Shares - When the deceased leaves behind both a spouse and one or more child, in most provinces, the notion of preferential shares come into play. Preferential shares dictate that a certain amount of the net estate is directed first towards the spouse. The amount of the preferential share depends on the province you reside in. The amount of the preferential share in Ontario is $350,000. If the value of the estate is less than the dollar amount set out by the province, then the spouse receives the estate in its entirety. If the value of the estate exceeds the dollar amount set out by the province, then the preferential shares come into play. The spouse receives the preferential share amount and then the remainder of the estate is divided between the spouse and children.
Beyond Preferential Shares - The net value of the estate that exceeds the preferential share amount is shared between the surviving spouse and children. This distribution is defined by provincial jurisdiction. Where there is just a spouse and one child, the majority of provinces distribute one half of the residual estate to the child and one half to the spouse. If the child has predeceased the parents, then their share is distributed down to their children (if they had any). This distribution is based on degrees of kinship, and is referred to as per stirpes.
What happens if you die without a Will? - Where there is a surviving spouse and more than one child, the distribution differs by province. Generally one-half to one-third goes to the spouse, with the remainder being divided up equally among the children. In most provinces the children’s shares are distributed per stirpes. If there is no surviving spouse then the estate is shared equally by the children.
*Provinces that do not recognize preferential shares include New Brunswick, Newfoundland, and PEI.
No Surviving Spouse, No Children
If the deceased leaves behind no spouse or children, then the estate is distributed to their heirs. In all provinces, except Quebec, if an individual dies without a spouse or children, the estate is passed to their parents in equal shares. If the individual is predeceased by their parents, then the estate passes equally to any brothers or sisters.
If there are no surviving siblings, then the estate is then passed down to any nieces or nephews. In the case that there are no nieces or nephews, then the estate is distributed equally among the deceased’s next of kin.
No Heirs
If a person dies without any heirs, then each province has legislation that dictates the estate passing to the Crown in a process known as escheat.

Not having a will is risky business and there is virtually no benefit that comes from neglecting to have one created. The processes that go with dying intestate are complicated and may cause your family more grief then necessary when trying to cope with your death. A will is perhaps the most important part of any financial plan. No matter what stage of life you are in, it is never a bad time to contact your team of professionals and start developing a well thought out estate plan.

Have questions?

Send us a message.

IAIC Market Update - April 3, 2023

2023-04-03T18:24:28Z

Last Week in the Markets: March 27th – 31st, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The end of the week, March 31st, coincided with the end of the first quarter of 2023. For equity investors, the final few days of trading reversed much of the recent losses that began with two bank failures in the United States. Each of the North American indexes gained more than 3% last week, and they all sit in positive territory for 2023. Unfortunately, each of them is below their levels of one year ago by four to fourteen percent.
The NASDAQ has jumped nearly 17% this quarter and this year as technology firms are seeing their reductions in staffing and other cost cutting measures reflected positively in their share prices. The broader indexes, like the TSX and S&P 500, have been weighed down by the Financials sector in each.
One of the contributors to last week’s increases for equities was the release of the February’s U.S. Personal Consumption Expenditures (PCE) price index on Friday. Core PCE increased 4.6% on a year-over-year basis, a slight deceleration from the level in January. In February the PCE rose 0.3% from its level in January. Both increases were below expectations, which led to increases across equities.
Positive news for the Canadian economy arrived with the release of January’s Gross Domestic Product (GDP) numbers that saw a monthly growth of 0.5%.

Sources: Fed Inflation Gauge , Personal Income and Outlays , Business Economy GDP

What’s ahead for this week?

In Canada, the Bank of Canada’s Business Outlook Survey will be released. Also, imports, exports and trade balance, and the latest jobs data, including employment change, unemployment rate, and labour participation rate are scheduled prior to the Good Friday holiday.
In the U.S., several indicators will be reported: durable goods, factory orders, construction spending, imports, exports, trade balance, mortgage index and refinance rate, and energy stockpiles and inventories. On Good Friday when markets are closed Nonfarm Payroll report will be issued.
Globally, imports, exports and trade balances are expected from Germany, France and Italy, and Purchasing Managers Indexes for products and services for the Eurozone and U.K.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

2023 Federal Budget Commentary

2023-03-30T18:27:57Z

On March 28, 2023, the Deputy Prime Minister and Finance Minister, the Honourable Chrystia Freeland, presented Budget 2023 – A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future , to the House of Commons.

No changes were made to personal or corporate tax rates or to the inclusion rate on taxable capital gains.

Some highlights include:

A. Personal Measures

Modifications to the alternative minimum tax regime focused on high-income individuals.
A one-time grocery rebate equal to two quarterly GST/HST credit payments.
Additional flexibility and possibilities with Registered Disability and Registered Education Savings Plans were introduced.

B. Business Measures

Modifications to the intergenerational business transfer rules to set requirements for activity by the children in the business and the transfer of control, equity ownership and management from the parents to the children.
Introduction of the employee ownership trust structure to provide a mechanism for business owners to transfer ownership in their private corporations to employee groups.
Several investment tax credits and other incentives were introduced or modified to encourage investment in clean energy.

C. International Measures

Confirmation of the government’s intention to introduce legislation implementing the income allocation rule and a domestic minimum top-up tax applicable to Canadian entities of multinational enterprises consistent with the OECD's BEPS initiatives.

D. Sales and Excise Tax

Increasing the air travelers security charge, limiting increases to alcohol excise duties for one year and adjusting the cannabis excise duty remittance frequency.

E. Other Measures

New income-tested dental care program for uninsured Canadians.

F. Previously Announced Measures

Intention to proceed with previously announced measures, including those related to excessive interest and financing expenses limitations; reporting rules for digital platform operators; extension of the residential property flipping rule to assignment sales; substantive Canadian-controlled private corporations; the mandatory disclosure rules; the electronic filing and certification of tax and information returns; and GST/HST changes in respect of cryptoasset mining.

In addition to the Federal Budget updates, the following update has been included from the Ontario 2023 Budget :

A. Ontario Made Manufacturing Investment Tax Credit

Introducing the Ontario Made Manufacturing Investment Tax Credit, a refundable tax credit for manufacturing and processing in Ontario.

For further details on these highlighted topics, please read below.

A. Personal Measures

Alternative Minimum Tax (AMT) for High-Income Individuals

Individuals will owe AMT if the tax amount calculated under the AMT regime is greater than the tax calculated under the ordinary progressive tax rate regime. Under the current rules, the calculation of AMT allows fewer deductions, exemptions and tax credits than under the ordinary income tax rules and applies a flat 15% tax on income over a standard $40,000 exemption.

Budget 2023 proposes several changes to the AMT calculation. First, the AMT rate is proposed to increase from 15% to 20.5%.

Second, the exemption would increase from $40,000 to the start of the fourth tax bracket (for 2024 this is approximately $173,000). Third, the AMT base would be broadened by further limiting tax preferences (i.e., exemptions, deductions and credits) as follows:

The capital gains inclusion rate would increase from 80% to 100%.
30% of capital gains eligible for the lifetime capital gains exemption would be included.
Deductions of capital loss carry forwards and allowable business investment losses would apply at a 50% rate.
100% of employee stock options benefits would be included.
30% of capital gains on donations of publicly listed securities would be included.
Only 50% of many deductions would be allowed, including the following: employment expenses (other than those incurred to earn commission income); moving expenses; child care expenses; interest and carrying charges incurred to earn income from property; northern residents deduction; and non-capital and limited partnership losses of other years.
Only 50% of non-refundable tax credits historically allowed for AMT purposes would be allowed.

The ability to recover AMT in the seven subsequent years, to the extent that tax computed under the ordinary progressive tax rate regime exceeds AMT, is not proposed to change.

The proposed changes would come into force for the 2024 personal tax year.

Grocery Rebate

Individuals and families with modest incomes receive the Goods and Services Tax Credit (GSTC). The maximum 2022/2023 GSTC is $467 for a single person, and $612 plus $161 per child for a married or common-law couple. Budget 2023 proposes a one-time payment called the Grocery Rebate which will equal half of the annual maximum (twice the quarterly payment received in January, 2023) to be paid as soon as possible after the legislation is passed.

Deduction for Tradespeople’s Tool Expenses

Under the current law, a tradesperson can claim a deduction of up to $500 of eligible new tools acquired in a taxation year as a condition of employment. Budget 2023 proposes to double the maximum employment deduction for tradespeople’s tools from $500 to $1,000, effective for 2023 and subsequent taxation years. As a consequence of this change, extraordinary tool costs that are eligible to be deducted under the apprentice vehicle mechanics’ tools deduction would be those costs that exceed the combined amount of the increased deduction for tradespeople’s tool expenses ($1,000) and the Canada employment credit ($1,368 in 2023) or 5% of the taxpayer’s income earned as an apprentice mechanic, whichever is greater.

Registered Education Savings Plans (RESPs)

Government grants and investment income can be withdrawn from RESPs as an education assistance payment (EAP) when a beneficiary is enrolled in an eligible post-secondary program. These withdrawals are taxable.

Under the current law, beneficiaries that are full-time students cannot withdraw more than $5,000 in EAPs in respect of the first 13 consecutive weeks of enrollment in a 12-month period. For part-time students, the limit is $2,500 per 13-week period. Budget 2023 proposes to increase these limits to $8,000 for full-time students and $4,000 for part-time students.

Budget 2023 also proposes to enable divorced or separated parents to open joint RESPs for one or more of their children or to move an existing joint RESP to another promoter. Under the current law, only spouses or common-law partners can jointly enter into an agreement with an RESP promoter to open an RESP.

These changes would come into force on Budget Day.

Registered Disability Savings Plans (RDSPs)

Where the contractual competence of a person with a disability who is 18 years of age or older is in doubt, the RDSP plan holder must be that person’s guardian or legal representative. A temporary measure allowed the person’s parent, spouse or common-law partner (a “qualifying family member”) to open an RDSP and be the plan holder where the person does not have a legal representative.

Budget 2023 proposes to extend this measure by three years, to December 31, 2026. Budget 2023 also proposes to broaden the definition of qualifying family members to include a brother or sister of the beneficiary who is 18 years of age or older. Qualifying family members who become a plan holder before the end of 2026 could remain the plan holder after 2026.

These proposals would apply as of royal assent of the enacting legislation.

Retirement Compensation Arrangements (RCAs)

An RCA is type of employer-sponsored arrangement that generally allows an employer to provide supplemental pension benefits to employees. A refundable tax is imposed at a rate of 50% on contributions to an RCA trust, as well as on income and gains earned or realized by the trust. The tax is generally refunded as the retirement benefits are paid to the employee. The employer receives a full deduction for contributions made to the RCA.

Employers who do not pre-fund supplemental retirement benefits through contributions to an RCA trust and instead settle retirement benefit obligations as they become due, can obtain a letter of credit (or a surety bond) issued by a financial institution in order to provide security to their employees. To secure or renew the letter of credit, the employer pays an annual fee or premium charged by the issuer. These fees and premiums are subject to the 50% refundable tax.

Budget 2023 proposes that fees or premiums paid for the purposes of securing or renewing a letter of credit (or a surety bond) for an RCA that is supplemental to a registered pension plan will not be subject to the refundable tax. This change would apply to fees or premiums paid on or after Budget Day.

Budget 2023 also proposes to allow employers to request a refund of previously remitted refundable taxes in respect of such fees or premiums paid in prior years. They would be entitled to recover 50% of retirement benefits paid after 2023, to a maximum of the refundable taxes paid in the past.

B. Business Measures

Strengthening the Intergenerational Business Transfer Framework

Historically where parents transferred shares of their corporation to a corporation owned by their children, deemed dividends rather than capital gains would arise on the disposition (due to Section 84.1 of the Income Tax Act). In 2021, legislation was passed (Bill C-208) to provide an exception from this deemed dividend treatment to facilitate the transfer of family businesses to the next generation. This exception allowed parents to utilize the lifetime capital gains exemption or simply receive capital gain treatment on the disposition, and enjoy the same tax benefits available on a sale to unrelated third parties.

However, the government was concerned that this exception contained insufficient safeguards and may have provided an inappropriate tax advantage where there was no transfer of a business to the next generation.

More specifically, this exception did not require that:

the parent cease to control the underlying business of the corporation whose shares are transferred,
the child(ren) purchasing the shares have any involvement in the business,
the interest in the purchaser corporation held by the child(ren) continue to have value, or
the child(ren) retain an interest in the business after the transfer.

Proposed Amendments

Budget 2023 proposes to amend these rules to ensure that they apply only where a genuine intergenerational business transfer (IBT) takes place.

A genuine IBT under the current law would be a transfer of shares of a corporation (the Transferred Corporation) by an individual shareholder (the Transferor) to another corporation (the Purchaser Corporation) where both of the following conditions are satisfied:

each share of the Transferred Corporation must be a “qualified small business corporation share” or a “share of the capital stock of a family farm or fishing corporation” (both as defined in the Income Tax Act), at the time of the transfer (in general terms, this requires that all or substantially all of its assets be used in an active business carried on in Canada); and
the Purchaser Corporation must be controlled by one or more persons each of whom is an adult child of the Transferor (the meaning of “child” for these purposes would include grandchildren, step-children, children-in-law, nieces and nephews, and grandnieces and grandnephews).

To ensure that only genuine IBTs are excluded from the deemed dividend rules, Budget 2023 proposes additional conditions be added. To provide flexibility, taxpayers who wish to undertake a genuine IBT may choose to rely on one of two transfer options:

an immediate business transfer (three-year test) based on arm’s length sale terms; or
a gradual business transfer (five-to-ten-year test) based on traditional estate freeze characteristics (an estate freeze typically involves a parent crystalizing the value of their economic interest in a corporation into shares that no longer share in growth in the corporate value to allow future growth to accrue to their children while the parent’s fixed economic interest is then gradually diminished by the corporation repurchasing the parent’s shares).

The immediate transfer rule would provide finality earlier in the process, though with more stringent conditions. In recognition that not all business transfers are immediate, the gradual transfer rule would provide additional flexibility for those who choose that approach.

Both the immediate and gradual business transfer options would reflect the hallmarks of a genuine IBT. The chart on the next page outlines the proposed conditions to qualify as a genuine IBT under each option.

When the current exception was introduced, it was intended that there be restrictions for transfers of large corporations. However, these restrictions were not effectively implemented. Budget 2023 indicates that there would be no limit on the value of shares transferred in reliance upon this rule.

The current exception includes restrictions on sale of the business by the purchaser corporation within five years of the share transfer. Budget 2023 proposes that these requirements would be eliminated. In addition, new relieving rules would apply to deem requirements 3, 4 and 5 in the above chart to be met in respect of a child where either of the following occurs:

the child dies or becomes permanently disabled; or
the child disposes of their entire their interest in the business in an arm’s length disposition.

In order to benefit from the exception to the deemed dividends, the Transferor and child(ren) would be required to jointly elect for the transfer to qualify as either an immediate or gradual intergenerational share transfer. The child(ren) would be jointly and severally liable for any additional taxes payable by the Transferor on deemed dividends resulting from a transfer that does not meet the above conditions. The joint election and joint and several liability recognize that the actions of the child could potentially cause the parent to fail the conditions and to be reassessed in this regard.

The limitation period for reassessing the Transferor’s liability for tax that may arise on the transfer is proposed to be extended by three years for an immediate business transfer and by ten years for a gradual business transfer, ensuring that the Transferor can be reassessed if the requirements are not met throughout the applicable period.

Budget 2023 also proposes to provide a ten-year capital gains reserve for genuine intergenerational share transfers that satisfy the above proposed conditions, which would allow capital gains to be brought into income over a period of up to ten years, in proportion to proceeds received. The normal limit for such reserves is five years.

These rules would apply to share sales occurring on or after January 1, 2024.

Employee Ownership Trusts (EOTs)

An EOT is a form of employee ownership where a trust holds shares of a corporation for the benefit of the corporation’s employees. EOTs can be used to facilitate the acquisition by employees of their employer’s business, without requiring them to pay directly to acquire shares. This will provide business owners an additional option for succession planning. Budget 2023 proposes new rules to facilitate the use of EOTs to acquire and hold shares of a business.

The following subsections describe the general rules that would apply to EOTs. Complex requirements are set out in draft legislation included in the Budget papers.

Definitions

To be an EOT, a trust would be required to be resident in Canada (excluding deemed resident trusts) and have only two purposes. First, it would hold shares of qualifying businesses for the benefit of the employee beneficiaries of the trust. Second, it would make distributions to employee beneficiaries, where reasonable, under a distribution formula that could only consider an employee’s length of service, remuneration and hours worked. Otherwise, all beneficiaries must generally be treated in a similar manner.

An EOT would be required to hold a controlling interest in the shares of the qualifying business. A qualifying business would need to meet certain conditions. It would be required to be a Canadian-controlled private corporation. All or substantially all of the fair market value of its assets must be attributable to assets used in an active business carried on in Canada. A qualifying business would not be able to carry on business as a partner in a partnership. An EOT would not be permitted to allocate shares of a qualifying business to individual beneficiaries.

Trustees of the EOT would be elected by the beneficiaries every five years. Individuals who held a significant economic interest in a business prior to its acquisition by the EOT would not be able to make up more than 40% of the trustees of the EOT, the directors of a corporation serving as a trustee of the EOT or the directors of any qualifying business owned by the EOT. This limit would also include persons related to such individuals.

Trust beneficiaries would be limited to qualifying employees. Individuals, and persons related to them, who hold, or held prior to the disposition to the EOT, a significant economic interest in the business would be excluded from being qualifying employee.

The Tax Treatment

The EOT would be a taxable trust and will be generally subject to the same rules as other personal trusts. Therefore, undistributed trust income would be taxed in the EOT at the top personal marginal tax rate. If the EOT distributes dividends received from the qualifying business, those dividends would retain their character when received by employee beneficiaries and would be eligible for the dividend tax credit.

Qualifying Business Transfer

A qualifying business transfer would occur when a taxpayer disposes of shares of a qualifying business for proceeds that do not exceed fair market value. The shares must be disposed of to either a trust that qualifies as an EOT immediately after the sale or a corporation owned 100% by the EOT. The EOT must own a controlling interest in the qualifying business immediately after the qualifying business transfer.

Benefits

A 10-year capital gain reserve would be available, therefore allowing capital gains to be brought into income over a period of up to ten years, in proportion to proceeds received. The normal limit for such reserves is five years.
A loan from the qualifying business to the EOT for the purchase of the shares of the qualifying business could be repaid within 15 years, an exception to the usual rule that loans to a shareholder are included in income if not repaid by the end of the following fiscal year.
The EOT would be able to hold the shares indefinitely without being deemd to realize capital gains. Most trusts are deemed to realize all gains accumulated in their assets every 21 years.

These amendments would apply as of January 1, 2024.

Clean Electricity Investment Tax Credit

Budget 2023 proposes to introduce a 15% refundable tax credit for eligible investments in:

non-emitting electricity generation systems: wind, concentrated solar, solar photovoltaic, hydro (including large-scale), wave, tidal, nuclear (including large-scale and small modular reactors);
abated natural gas-fired electricity generation (which would be subject to an emissions intensity threshold compatible with a net-zero grid by 2035);
stationary electricity storage systems that do not use fossil fuels in operation, such as batteries, pumped hydroelectric storage, and compressed air storage; and
equipment for the transmission of electricity between provinces and territories.

Both new projects and the refurbishment of existing facilities will be eligible. Taxable and non-taxable entities such as Crown corporations and publicly owned utilities, corporations owned by Indigenous communities, and pension funds, would be eligible. The clean electricity investment tax credit could be claimed in addition to the Atlantic investment tax credit, but generally not with any other investment tax credit.

In order to access the tax credit in each province and territory, other requirements will include a commitment by a competent authority that the federal funding will be used to lower electricity bills, and a commitment to achieve a net-zero electricity sector by 2035.

The clean electricity investment tax credit would be available as of Budget Day 2024 for projects that did not begin construction before Budget Day 2023. The credit would not be available after 2034.

Clean Hydrogen Investment Tax Credit

Budget 2023 proposes to introduce the clean hydrogen refundable investment tax credit for investments made in clean hydrogen production based on the lifecycle carbon intensity of hydrogen (previously noted in the 2022 Fall Economic Statement). The amount of the credit, which ranges from 15% to 40%, is based on assessed carbon intensity of the hydrogen that is produced (i.e., kilogram (kg) of carbon dioxide equivalent (CO2e) per kg of hydrogen).

The credit would be available in respect of the cost of purchasing and installing eligible equipment for projects that produce hydrogen from electrolysis or natural gas (so long as emissions are abated using carbon capture, utilization, and storage).

Property that is required to convert clean hydrogen to clean ammonia would also be eligible for the credit, at the lowest credit rate of 15%.

This measure would apply to property that is acquired and that becomes available for use on or after Budget Day. The credit would be fully phased out for property that becomes available for use after 2034.

Clean Technology Investment Tax Credit

The 2022 Fall Economic Statement proposed a 30% clean technology investment tax credit for Canadian businesses adopting in clean technology and investing in eligible property that is acquired and that becomes available for use on or after Budget Day 2023. Eligible capital costs include investments in:

electricity generation systems, including solar photovoltaic, small modular nuclear reactors, concentrated solar, wind, and water (small hydro, run-of-river, wave, and tidal);
stationary electricity storage systems that do not use fossil fuels in their operation, including but not limited to: batteries, flywheels, supercapacitors, magnetic energy storage, compressed air storage, pumped hydro storage, gravity energy storage, and thermal energy storage;
low-carbon heat equipment, including active solar heating, air-source heat pumps, and ground-source heat pumps; and
industrial zero-emission vehicles and related charging or refueling equipment, such as hydrogen or electric heavy-duty equipment used in mining or construction.

Budget 2023 proposes to expand eligibility of the tax credit to include geothermal energy systems that are eligible for Class 43.1 of Schedule II of the Income Tax Regulations. The expansion would apply in respect of property that is acquired and becomes available for use on or after Budget Day, where it has not been used for any purpose before its acquisition.

The phase-out of the credit would commence in 2034, rather than 2032 as previously announced.

Investment Tax Credit for Carbon Capture, Utilization and Storage (CCUS)

Budget 2022 proposed a refundable investment tax credit for the cost of purchasing and installing eligible equipment used in an eligible CCUS project for businesses that incur eligible expenses starting on January 1, 2022.

Budget 2023 proposes the following changes in respect of the CCUS, with details to be released in the coming months:

Dual use equipment that produces heat and/ or power or uses water, that is used for CCUS as well as another process, would be eligible for the CCUS tax credit on a pro-rated basis in proportion to the expected energy balance or material balance supporting the CCUS process over the first 20 years of the project.
British Columbia would be added to the list of eligible jurisdictions for dedicated geological storage, applicable to expenses incurred on or after January 1, 2022.
Credits related to eligible refurbishment costs incurred once the project is operating would be calculated based on the average of the expected eligible use ratio for the five-year period (the period) in which they are incurred, and each subsequent period (i.e., the periods over which they contribute to the useful life of the project).

These measures would apply to eligible expenses incurred after 2021 and before 2041.

Labour Requirements Related to Certain Investment Tax Credits

Budget 2023 proposes to implement the government’s intention to attach prevailing wage and apprenticeship requirements to the proposed clean electricity, clean technology and clean hydrogen investment tax credits. In general, the rates available for these credits will be reduced by 10% if the following labour two requirements are not met.

Wage requirement – Businesses would need to ensure that all covered workers are compensated at a level that meets or exceeds the relevant wage, plus the substantially similar monetary value of benefits and pension contributions (converted into an hourly wage format), as specified in an “eligible collective agreement.”
Apprenticeship requirement – Businesses would need to ensure that for a given taxation year, not less than 10% of the total labour hours performed by covered workers engaged in subsidised project elements be performed by registered apprentices. Covered workers are those whose duties correspond to those performed by a journeyperson in a Red Seal trade.

The requirements would apply to work performed on or after October 1, 2023. Budget 2023 also indicated that labour requirements are intended to apply to the investment tax credit for carbon capture, utilization, and storage, with details to be announced at a later date.

Clean Technology Manufacturing Investment Tax Credit

Budget 2023 proposes to introduce a 30% refundable investment tax credit for clean technology manufacturing and processing, and critical mineral extraction and processing, on the capital cost of eligible property associated with eligible activities, including:

extraction, processing, or recycling of critical minerals essential for clean technology supply chains, specifically: lithium, cobalt, nickel, graphite, copper, and rare earth elements;
manufacturing of renewable or nuclear energy equipment;
processing or recycling of nuclear fuels and heavy water;
manufacturing of grid-scale electrical energy storage equipment;
manufacturing of zero-emission vehicles; and,
manufacturing or processing of certain upstream components and materials for the above activities, such as cathode materials and batteries used in electric vehicles.

The credit would apply to property that is acquired and becomes available for use on or after January 1, 2024. The credit would be gradually phased out, starting with property that becomes available for use in 2032 and would no longer be in effect for property that becomes available for use after 2034.

Interaction of Clean Energy Investment Tax Credits

For a particular property, businesses would be able to claim only the investment tax credits for carbon capture, utilization and storage; clean technologies; clean electricity; or clean technology manufacturing. However, multiple tax credits could be available for the same project if the project includes different types of eligible property.

Zero-Emission Technology Manufacturers

In 2021, the corporate income tax rate for qualifying zero-emission technology manufacturers was reduced by 50%.

Budget 2023 proposes to expand eligible activities to include the following nuclear manufacturing and processing activities:

manufacturing of nuclear energy equipment;
processing or recycling of nuclear fuels and heavy water; and
manufacturing of nuclear fuel rods.

This expansion would apply for taxation years beginning after 2023.

Budget 2023 proposes to extend the availability of these reduced rates by three years, such that the planned phase-out would start in taxation years that begin in 2032. The measure would be fully phased out for taxation years that begin after 2034.

Tax on Repurchases of Equity

The 2022 Fall Economic Statement announced the government’s intention to introduce a 2% tax on the net value of all types of share repurchases by public corporations in Canada. Budget 2023 provides the design and implementation details of the proposed measure. The tax would apply only to public corporations (Canadian-resident corporations whose shares are listed on a designated stock exchange).

It would not apply to mutual fund corporations, but would apply to real estate investment trusts, specified investment flow-through (SIFT) trusts and SIFT partnerships if they have units listed on a designated stock exchange.

The proposed tax would apply in respect of repurchases and issuances of equity that occur on or after January 1, 2024.

General Anti-Avoidance Rule (GAAR)

The GAAR in the Income Tax Act is intended to prevent abusive tax avoidance transactions while not interfering with legitimate commercial and family transactions. If abusive tax avoidance is established, the GAAR applies to deny the tax benefit created by the abusive transaction.

A consultation on various approaches to modernizing and strengthening the GAAR has recently been conducted. A consultation paper released last August identified a number of issues with the GAAR and set out potential ways to address them. As part of the consultation, the government received a number of submissions, representing a wide variety of viewpoints.

Preamble

A preamble would be added to the GAAR, in order to help address interpretive issues and ensure that the GAAR applies as intended. While the GAAR informs the interpretation of, and applies to, every other provision of the Income Tax Act, it fundamentally denies tax benefits sought to be obtained through abusive tax avoidance transactions. It in effect draws a line: while taxpayers are free to arrange their affairs so as to obtain tax benefits intended by Parliament, they cannot misuse or abuse the tax rules to obtain unintended benefits. The preamble would also clarify that the GAAR is intended to apply regardless of whether or not the tax planning strategy used to obtain the tax benefit was foreseen.

Avoidance Transaction

The threshold for an “avoidance transaction” potentially subject to the GAAR would be reduced from a “primary purpose” test to a “one of the main purposes” test. This is consistent with the standard used in many modern anti-avoidance rules in other countries and is considered by the government to strike a reasonable balance, as it would apply to transactions with a significant tax avoidance purpose but not to transactions where tax was simply a consideration.

Economic Substance

A rule would be added to the GAAR to better meet the objective of requiring economic substance in addition to literal compliance with the words of the Income Tax Act. Currently, Supreme Court of Canada jurisprudence has established a more limited role for economic substance.

The proposed amendments would provide that economic substance is to be considered at the ‘misuse or abuse’ stage of the GAAR analysis and that a lack of economic substance tends to indicate abusive tax avoidance. A lack of economic substance will not always mean that a transaction is abusive. It would still be necessary to determine the object, spirit and purpose of the provisions or scheme relied upon, in line with existing GAAR jurisprudence. In cases where the tax results sought are consistent with the purpose of the provisions or scheme relied upon, abusive tax avoidance would not be found even in cases lacking economic substance.

The amendments would provide indicators for determining whether a transaction or series of transactions lacks economic substance. These are not an exhaustive list of factors that might be relevant and different indicators might be relevant in different cases. However, in many cases, the government believes that the existence of one or more of these indicators would strongly point to a transaction lacking economic substance. These indicators are:

whether there is the potential for pre-tax profit;
whether the transaction has resulted in a change of economic position; and
whether the transaction is entirely (or almost entirely) tax motivated.

Budget 2023 provided the example of an individual contributing to a tax-free savings account. Such a transfer could be considered to be entirely tax motivated, with no change in economic position or potential for profit other than as a result of tax savings. Even if the transfer is considered to be lacking in economic substance, it is clearly not a misuse or abuse of the relevant provisions of the Income Tax Act. The individual is using their tax-free savings account in precisely the manner that Parliament intended. There are contribution rules that specifically contemplate such a transfer and, perhaps more fundamentally, the basic tax-free savings account rules would not work if such a transfer was considered abusive.

The proposal would not supplant the general approach under Canadian income tax law, which focuses on the legal form of an arrangement. In particular, it would not require an enquiry into what the economic substance of a transaction actually is (e.g., whether a particular financial instrument is, in substance, debt or equity). Rather, it would require consideration of a lack of economic substance in the determination of abusive tax avoidance.

Penalty

A penalty would be introduced for transactions subject to the GAAR, equal to 25% of the amount of the tax benefit. Where the tax benefit involves a tax attribute that has not yet been used to reduce tax, the amount of the tax benefit would be considered to be nil. The penalty could be avoided if the transaction is disclosed to CRA, either as part of mandatory disclosure rules which are currently proposed or voluntarily.

Reassessment Period

A three-year extension to the normal reassessment period would be provided for GAAR assessments, unless the transaction had been disclosed to CRA as discussed above.

Consultation

Budget 2023 announced a consultation on these proposals to close on May 31, 2023. Following this consultation, the government intends to publish revised legislative proposals and announce the application date of the amendments.

Dividends Received Deduction by Financial Institutions

Corporations are able to deduct dividends received on shares of other corporations resident in Canada in computing their taxable income, preventing the same earnings being subject to multiple levels of corporate taxation. The government considers this treatment inconsistent with the mark-to-market rules that essentially classify gains on portfolio shares held by banks as business income. Budget 2023 proposes to deny the dividend deduction in respect of dividends received by financial institutions on shares that are mark-to-market property, effective for dividends received after 2023.

Income Tax and GST/HST Treatment of Credit Unions

A credit union (as defined for income tax and GST purposes) benefits from a GST/HST rule allowing it to receive most taxable supplies of goods and services from credit union centrals and other credit unions on an exempt basis. The definition prevents a credit union that earns more than 10% of its revenue from sources other than certain specified sources (such as interest income from lending activities) from meeting the definition of “credit union,” and qualifying for the special income tax and GST/HST rules governing credit unions.

This could arise even though the credit union’s governing legislation permits it to earn revenue from these other sources. Most credit unions are currently full-service financial institutions that offer a comprehensive suite of financial products and services. Budget 2023 proposes to eliminate the revenue test from the definition of “credit union” and amend that definition to accommodate how credit unions currently operate, effective for taxation years ending after 2016.

C. International Measures

International Tax Reform – Base Erosion and Profit Shifting

Canada is one of 137 members of the OECD/Group of 20 (G20) Inclusive Framework on Base Erosion and Profit Shifting (the Inclusive Framework) that have joined a two-pillar plan for international tax reform agreed to on October 8, 2021. Budget 2023 reiterates Canada’s commitment to the framework, and its intention to implement the Pillar One (intended to reallocate a portion of taxing rights over the profits of the largest and most profitable multinational enterprises to market countries where their users and customers are located) and Pillar Two (intended to ensure that the profits of large multinational enterprises are subject to an effective tax rate of at least 15%, regardless of where they are earned) initiatives.

Budget 2023 announces the government’s intention to introduce legislation implementing the income inclusion rule and a domestic minimum top-up tax applicable to Canadian entities of MNEs that are within scope of Pillar Two, with effect for fiscal years of MNEs that begin on or after December 31, 2023.

D. Sales and Excise Tax

Alcohol Excise

Alcohol excise duties are automatically indexed to total Consumer Price Index (CPI) inflation at the beginning of each fiscal year (i.e., on April 1st). Budget 2023 proposes to temporarily cap the inflation adjustment for excise duties on beer, spirits and wine at 2%, for one year only, as of April 1, 2023.

Cannabis Taxation – Quarterly Duty Remittances

Excise duties are imposed on cannabis products, and are generally remittable on a monthly basis. Budget 2022 brought forward a measure that allowed certain smaller licensed cannabis producers to remit excise duties on a quarterly basis. Budget 2023 proposes to allow all licensed cannabis producers to remit excise duties on a quarterly rather than monthly basis, starting from the quarter beginning on April 1, 2023.

Air Travellers Security Charge

The Air Travellers Security charge (ATSC) is generally paid by passengers when they purchase airline tickets. Budget 2023 proposes to increase ATSC rates by 32.85%, noting that these rates were last increased in 2010, at which time they were raised by 52.4%.

The proposed new ATSC rates will apply to air transportation services that include a chargeable emplanement on or after May 1, 2024, for which any payment is made on or after that date. The charge for a domestic one-way flight will rise from $7.48 to $9.94. The transborder charge will increase from $12.71 to $16.89, and the charge for other international travel will increase from $25.91 to $34.42. These rates include the GST or federal portion of HST.

E. Other Measures

Small Business Credit Card Fees

Budget 2023 announced that commitments had been obtained from Visa and Mastercard to lower fees for small businesses. More than 90% of credit card-accepting businesses are expected to see their fees reduced by up to 27%.

Automatic Tax Filing for Low-income Canadians

Budget 2023 announced that the number of Canadians eligible for CRA’s automatic File My Return service will be increased to 2 million by 2025, almost tripling the number of currently eligible Canadians. In 2022, 53,000 returns were filed using this service. In addition, a new pilot project will be implemented to assist vulnerable Canadians in applying for benefits even if they do not file tax returns.

Student Benefits

Budget 2023 proposes increasing Canada student grants by 40%, raising the interest-free Canada student loan limit from $210 to $300 per study week, and waiving the requirement for mature students (aged 22 or older) to undergo credit screening in order to qualify.

Dental Care for Canadians

The Canadian dental care plan would provide coverage for all uninsured Canadians with an annual family income of less than $90,000 (the Canada dental benefit only provided benefits for children under 12) by the end of 2023. The plan will be administered by Health Canada with support from a third-party benefits administrator. Benefits are reduced for families with income between $70,000 and $90,000.

Protecting Federally Regulated Gig Workers

Budget 2023 proposes to amend the Canada Labour Code to strengthen prohibitions against employee misclassification for federally regulated gig workers such that they will receive protections and benefits including EI and CPP.

Ensuring the Integrity of Emergency COVID-19 Benefits

Budget 2023 proposes to provide $53.8 million in 2022-23 to Employment and Social Development Canada to support integrity activities relating to overpayments of COVID-19 emergency income supports.

F. Previously Announced Measures

Budget 2023 confirms the government’s intention to proceed with the following previously announced tax and related measures, as modified to take into account consultations and deliberations since their release.

Legislative proposals released on November 3, 2022 with respect to Excessive Interest and Financing Expenses Limitations and Reporting Rules for Digital Platform Operators.
Tax measures announced in the Fall Economic Statement on November 3, 2022, for which legislative proposals have not yet been released, including: automatic advance for the Canada workers benefit; investment tax credit for clean technologies; and extension of the residential property flipping rule to assignment sales.
Legislative proposals released on August 9, 2022, including with respect to the following measures:

borrowing by defined benefit pension plans;
reporting requirements for Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs);
fixing contribution errors in defined contribution pension plans;
the investment tax credit for Carbon Capture, Utilization and Storage;
hedging and short selling by Canadian financial institutions;
substantive Canadian-controlled private corporations;
mandatory disclosure rules;
the electronic filing and certification of tax and information returns;
Canadian forces members and veterans amounts;
other technical amendments to the Income Tax Act and Income Tax Regulations proposed in the August 9th release; and
remaining legislative and regulatory proposals relating to the Goods and Services Tax/Harmonized Sales Tax, excise levies and other taxes and charges announced in the August 9th release.

Legislative proposals released on April 29, 2022 with respect to hybrid mismatch arrangements.
Legislative proposals released on February 4, 2022 with respect to the Goods and Services Tax/Harmonized Sales Tax treatment of cryptoasset mining.
Legislative proposals tabled in a Notice of Ways and Means Motion on December 14, 2021 to introduce the Digital Services Tax Act.
The transfer pricing consultation announced in Budget 2021.
The income tax measure announced on December 20, 2019 to extend the maturation period of amateur athletes trusts maturing in 2019 by one year, from eight years to nine years.
Measures confirmed in Budget 2016 relating to the Goods and Services Tax/Harmonized Sales Tax joint venture election.

A. Ontario Budget 2023

Ontario Made Manufacturing Investment Tax Credit

The Ontario budget introduces the Ontario Made Manufacturing Investment Tax Credit. This credit is available to Canadian controlled private corporations (CCPCs) with a permanent establishment in Ontario. The amount of the refundable tax credit is 10% of qualifying investments of up to $20 million (to be shared by an associated group). Qualifying investments include expenditures for certain buildings, machinery and equipment used in manufacturing or processing (M&P) in Ontario as follows:

Construction, renovation or acquisition of buildings used for M&P in Ontario that become available for use after March 22, 2023 (90% of the building’s floor space must be used for M&P at the end of the taxation year and the building must be eligible for the additional 6% depreciation rate permitted under the Federal Income Tax Act). Farming is not considered M&P for this purpose. Also, the building cannot have been used by any other person before March 17, 2007.
Machinery and equipment used in M&P in Ontario, available for use after March 22, 2023 and before 2026.

IAIC Market Update - March 27, 2023

2023-03-27T15:35:50Z

Last Week in the Markets: March 20th – 24th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

North American equity indexes delivered positive, overall returns last week, and the S&P 500 and NASDAQ achieved this feat for the second consecutive week. Financial firms, primarily banks, continue to lead the news cycle with Credit Suisse, Deutsch Bank and others revealing vulnerabilities. The TSX Financials sector is down about 11% since its most recent peak in mid-February.
Rising interest rates and insufficient oversight have led to the failures of Silicon Valley Bank and Signature Bank. With rates rising for the past year, a few banks had the cash demands of paying higher short-term rates collide with the long-term, low interest their investments are earning. Thankfully the Canadian financial services sector is much more heavily regulated than American and European institutions.
The crisis for some banks has affected the U.S. Federal Reserve’s ability to fight inflation. Typically, a central bank will slow demand in the economy by reducing liquidity in the system by raising rates and reducing bond holdings. On Wednesday the Federal Reserve increased its benchmark, federal funds, rate by ¼ point, which is a smaller increase than forecast just a few weeks ago.
On Tuesday StatsCan released the Consumer Price Index (CPI) for February which showed an increase of 5.2% on a year-over-year basis. A month earlier, January’s annualized inflation was 5.9%. Although the inflation rate has fallen from its peak and continues to lower, it is due to steep monthly price increases one year ago that have adjusted the baseline upward. Groceries prices continue to drive overall inflation after posting a rise of 10.6% since February 2022.

Sources: TSX Financials Sector , Fed's inflation and bank crisis , CBC explainer Canadian banks , Fed press conf, release and SEP , StatsCan

What’s ahead for this week?

In Canada, after last week’s consumer inflation release another significant economic release, January’s Gross Domestic Product, measuring the economy’s overall health will be reported.
In the U.S., the House Price Index, pending home sales, goods trade balance, retail inventories, real consumer spending, personal income and spending will be released. Fourth quarter GDP, GDP Price Index and GDP Sales, and the Fed’s primary inflation indicator, the Personal Consumption Expenditures (PCE) price index and are scheduled toward the end of the week.
Globally, following the takeover of Credit Suisse by UBS, European news continues as Germany, France and Italy release their Consumer Price Index for their individual countries, and the entire Eurozone also reports aggregate CPI. Eurozone business climate, inflation expectations and employment are also due.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

How to Financially Prepare for Divorce

2023-03-22T14:43:13Z

How Jane Financially Prepared for Divorce

Jane is divorced. Going through divorce was a difficult time, not just for her but for her entire family. The emotions were draining, but the financial strain made it even worse.

As Jane prepared for divorce, there were so many decisions to be made quickly. She knew she had to be proactive to protect her financial well-being.

1. Accurate Financial Statements

Jane first needed to understand her financial situation before entering the divorce process. She started by compiling her financial records - tax returns, loan documents, retirement accounts, bank statements, and investment statements. Then, with her accountant’s help, Jane was able to fully understand where she stood financially.

Jane also pulled her credit report to ensure she knew all her accounts and liabilities. She made a comprehensive list of all her assets that could be divided during the divorce, including their marital home, investments, pensions, personal property, and more.

2. Open new bank accounts & credit cards, close joint bank accounts, & close or freeze joint credit cards

Next, Jane opened new personal bank accounts and closed her joint accounts with her soon-to-be ex-husband. She updated all her direct deposits to her new account and started paying her bills using those accounts. Importantly, to avoid being responsible for any debt her husband may accrue post-divorce, she and her husband agreed to pay off the minimal debt outstanding and closed their joint credit cards.

3. Update your Will, Power of Attorney, insurance policies, including beneficiaries.

Jane wanted to ensure her wishes were honoured in the event of her death – and that her former husband wouldn’t have access to her private information. She updated her Will and Power of Attorney, designating new beneficiaries on her investment accounts and insurance policies.

4. Update your mailing address if you no longer live in the marital home.

Jane also changed her mailing address to keep her mail private during the divorce proceedings. She wanted to ensure that any correspondence from her lawyer or information about her finances wouldn’t fall into the wrong hands.

5. Refrain from making significant financial decisions that may be included in the division of property.

Finally, Jane wanted to avoid losing assets or handing over more than she had planned. To do this, she refrained from making significant financial decisions until the divorce was finalized. Instead, she worked with legal and financial professionals to make sure her best interests were protected throughout the process.

Jane had to figure out her new income post-divorce and set a budget. She needed to get her life back on track. With her financial planner, she determined all her monthly inflows, debt payments, and fixed expenses and allocated her discretionary spending accordingly. Together, Jane and her financial planner started a new financial plan and set new, achievable goals. She also reviewed her investments with her portfolio manager to make sure they aligned with her new financial goals and comfort level.

Starting Fresh, Post-Divorce

Determine your new income and set a budget.

Post-divorce, your cash flows are likely to change drastically. So first, determine all your monthly inflows, debt payments and fixed expenses. From there, figure out how to allocate your discretionary spending.

Start your financial plan.

Your future looks different than the last time you did a financial plan. Work with your advisor to lay out new objectives and determine the next steps to get your financial life back on track.

Review your investments.

Your investment objectives may have changed since your divorce, or it may be your first time learning about investing. Talk to your portfolio manager and ensure your portfolio aligns with your objectives and comfort level.

Work with your accountant, financial planner, and portfolio manager to clearly understand your financial position and set you on the right path to financial well-being post-divorce.

Have questions?

Send us a message.

IAIC Market Update - March 20, 2023

2023-03-20T18:33:29Z

Last Week in the Markets: March 13th – 17th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Friday’s St. Patrick’s Day celebration coincided with the ending of about ten days of market turmoil. The widely varying opinions of the significance for investors of recent events had the North American indexes reflecting the same lack of clarity. The NASDAQ and the Dow gained 4½ and 1½%, respectively, for the week while the TSX dropped by 2%.
A number of important economic indicators were released, but fears over the failures of two U.S. banks, and difficulties for two more, First Republic and Credit Suisse, drove the news cycle early last week.
The failures of Silicon Valley Bank and Signature Bank were the first since 2020, and the 512th and 513th since 2008. Elsewhere, First Republic received a capital injection of $30 Billion from other banks. On Sunday a $3.2 Billion purchase of Credit Suisse by UBS was announced.
The European Central Bank (ECB) “decided to increase the three key ECB interest rates by 50 basis points, in line with its determination to ensure the timely return of inflation to the 2% medium-term target.”
The U.S. Consumer Price Index (CPI) for February was released on Tuesday at 0.4% for the month and 6.0% year-over-year.
The recent events in the financial industry that require stability measures may hamper the Fed’s ability to address inflation. The implications for the Federal Reserve’s interest rate announcement on Wednesday are being c onsidered in light of the late Sunday sale of Credit Suisse.

Sources: ECB , CNBC UBS and CS, Bureau of Labor Stats and CPI

What’s ahead for this week?

In Canada, the consumer inflation data and new housing price index for February will be released on Tuesday morning prior to market-open.
In the U.S., several housing indicators are scheduled for release including existing and new home sales, building permits, mortgage applications, mortgage market and refinance indexes. The most compelling release will be Wednesday’s interest rate decision from the Federal Reserve.
Globally, consumer confidence and the trade balance for the Eurozone will be announced along with manufacturing and services Purchasing Managers Indexes for the region. In Asia, an interest rate announcement is due from the Peoples Bank of China, and Japan’s CPI are scheduled for release.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - March 14, 2023

2023-03-14T12:29:08Z

Last Week in the Markets: March 6th to March 10th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Concern for the continued rise of inflation and additional interest rate increases in the U.S. weighed on markets last week. Domestically, the Bank of Canada held its target for the overnight rate steady at 4½% on Wednesday. This is the first time that interest rates have been held steady since January 2022, following eight consecutive rate increases.
The slowing of the Canadian jobs market, a top indicator of economic growth, enabled the Bank of Canada’s position to pause rate increases. The Canadian economy added 22,000 jobs in February, an increase of 0.1% for the month. Total employment has risen to 20,054,000, and the unemployment rate was unchanged at 5.0%. Wages have risen 5.4% on a year-over-year basis in February, which is an increase from January’s annualized wage gain of 4.5%.
Unfortunately, the impact of the Bank of Canada’s decision was overwhelmed by the Federal Reserve. Fed Chair, Jerome Powell, testified to Congress last week, and said, “if the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes” and “the latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated”. A strong or strengthening economy means that previous interest rate increases have not yet caused the desired effect of slowing demand in the economy, which will in-turn, slow inflation. The sentiment that more interest rate increases will cause a deeper recession grew last week.

Sources: StatsCan Feb jobs , BoC interest rate decision , CNBC and Powell Testimony , Powell Opening Statement , Watch Powell Testimony

What’s ahead for this week?

In Canada, January sales data for manufacturing, wholesale, and new vehicles will be reported. Industrial and raw materials price indexes will be released, which will foreshadow future consumer inflation numbers.
In the U.S., the Consumer Price Index (CPI) for February will be released on Tuesday prior to the opening of markets. The next day, the Producer Price Index (PPI) will be announced. Volatility is expected to increase both before and after the release of these two important indicators. Other important releases scheduled include building permits, housing starts, import and export price indexes, industrial production, retail sales, and business inventories.
Globally, the European Central Bank (ECB) will announce an interest rate decision on Thursday and conduct a press conference. On the following day, Friday, consumer inflation for the Eurozone will be released. China, the world’s second largest economy, will report its retail sales and industrial production.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - March 7, 2023

2023-03-07T14:06:06Z

Last Week in the Markets: : February 27th – March 3rd, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The North American equity indexes rose 1¾ to 2½ percent, the Canadian dollar strengthened marginally, and both gold and oil rose.
After peaking last summer headline inflation, the Consumer Price Index (CPI), had begun to fall slightly, but then its decline stalled.
Consumer prices in Spain, France and Germany, Europe’s largest economy, rose in February. U.S. prices rose 0.5% in January compared to December.
Canadian year-over-year inflation dropped slightly, but only because January 2023 price increases paled in comparison to those in January 2022.
Interest rate announcements are scheduled to be released in the next 3 weeks - Bank of Canada (March 8th), European Central Bank (March 16th) and the Federal Reserve (March 22nd). Both the European Central Bank and Federal Reserve have indicated that additional interest rate increases are necessary. The Bank of Canada is hinting at a more cautious approach.
Until the upcoming rate announcements occur and the economic indicators on which they are based, like inflation, employment, and wages are known, increased levels of volatility for equities may be the short-term result.

Sources: U.S. inflation , BNN and Fed , Canada inflation , Eurozone inflation

What’s ahead for this week?

In Canada, the most important announcements will be the Bank of Canada’s interest rate decision on Wednesday, and the latest employment data on Friday.
In the U.S., durable goods and factory orders, wholesale trade, mortgage market and mortgage refinance indexes, imports, exports and trade balance, average hourly earnings and the non-farm payroll report will be released. Also, Fed Chair, Jerome Powell, will testify on the U.S. central bank's semi-annual monetary policy report to the House Financial Services Committee.
Globally, the import, export and trade balance reports continue with China. The Bank of Japan will announce its latest monetary policy and interest rate decision after consumer and producer inflation is released. Eurozone retail sales and Gross Domestic Product are scheduled, and several European Central Bank leaders, including President Lagarde, President of the European Central Bank, will deliver speeches during the week.

Source: Fed Chair to Testify

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - February 27, 2023

2023-02-27T18:53:53Z

Last Week in the Markets: February 20th – 24th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Following the holiday observances in Canada and the U.S. on Monday, it was an eventful week for most investors. Equities continued to lose value on predictions of increased tightening by central banks.
The year-over-year rate of Canadian consumer inflation lowered to 5.9% in January, a decline from 6.3% in December. In January the cost of mortgage interest, gasoline and food rose, while cellular services and passenger vehicles fell. During the month of January 2023 prices rose 0.5% compared with an increase of 0.9% in January 2022. ( Source )
Another important measure of inflation, the U.S. Personal Consumption Expenditures (PCE), which is a measure of consumer spending, rose 5.4% on a year-over-year basis as of the end of January. This is a slight increase from December’s annualized increase of 5.3% and ends three consecutive months of decline for this measure that began in October. On a monthly basis prices were up 0.6% in January, which is higher than December’s increase of 0.2%. ( Source )
After the PCE was released North American equity indexes opened below Thursday’s close. Only the TSX was able to climb back into positive territory for the day. Friday’s reversal allowed the TSX to limit its losses for the week to approximately half the percentages of the American indexes. The Dow completed its fourth consecutive week of losses, and the S&P 500 delivered its poorest result of 2023.

What’s ahead for this week?

In Canada, fourth quarter Gross Domestic Product (GDP) will be reported along with building permits, labour productivity and Purchasing Managers Indexes (PMIs) for manufacturing.
In the U.S., durable goods orders, goods trade balance, retail, and wholesale inventories, pending home sales, house price index, mortgage market index, and construction spending will all be released.
Globally, in the Eurozone consumer confidence and inflation expectation, and the Consumer Price Index (CPI) and Producer Price Index (PPI) will be reported. Japan will release its core CPI, retail sales, construction orders, and housing starts.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - February 21, 2023

2023-02-22T02:00:34Z

Last Week in the Markets: February 13th – 17th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The major North American indexes peaked on Wednesday and then delivered two days of negative returns to close the week prior to the Canadian and U.S. holiday observances on Monday. The most important economic news affecting capital markets was focused on U.S. consumer and producer inflation, and the implications for the next round of Federal Reserve monetary actions scheduled for March 22nd.
The Consumer Price Index (CPI) rose 0.5% in January after rising 0.1% in December. The year-over-year inflation rate is 6.4%. Over half of the monthly rise was contributed by shelter, and food, gasoline and natural gas also pushed price increases along. The Producer Price Index (PPI) increased by 0.7% in January, which follows a decline of 0.2% in December. For the 12 months ending January 31st, the PPI has risen 6.0%.

Source ₁ Source ₂

What’s ahead for this week?

In Canada, Monday’s holiday had markets closed. Starting on Tuesday with the release of the latest consumer inflation data, retail sales, new housing price index, manufacturing and wholesale sales and the federal government’s budget balance will be reported.
In the U.S., markets were closed for President’s Day. Existing home sales, mortgage market index, consumer and personal spending will be announced. The Department of Commerce will release the Personal Consumption and Expenditure (PCE) price index, the key inflation indicator for the Federal Reserve.
Globally, the Eurozone will release its regional Consumer Price Index (CPI), which incorporates the inflation across all economies in their organization. Germany, the largest European economy, will release its Gross Domestic Product (GDP) for Q4. Japan will also release its consumer inflation data.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

5 Reasons to Keep Up with Bookkeeping

2023-02-17T15:15:41Z

Bookkeeping is a fundamental aspect of any business. It involves keeping track of all financial transactions and organizing them into categories such as revenue, expenses, assets, and liabilities. Unfortunately, many business owners overlook the importance of bookkeeping and fail to maintain accurate and up-to-date records. This can lead to hectic year-ends, among many other issues. In this blog, we will explore the reasons why it's important to keep your bookkeeping up to date.

1. Accurate Financial Statements

One of the most significant advantages of keeping up-to-date bookkeeping records is that it helps in generating accurate financial statements. Financial statements like the income statement and balance sheet provide business owners with critical information on the financial health of the business, which helps in making informed decisions.

Without proper bookkeeping, generating accurate financial statements becomes impossible. Financial statements that are not accurate could lead to making wrong decisions, leading to a financial disaster for your business.

2. Tax Compliance

Accurate and up-to-date bookkeeping records also make it easier to comply with tax regulations. Bookkeeping records are used in preparing tax returns and providing supporting documents in case of an audit. Accurate records make it easier to claim deductions and prevent errors that could result in penalties, interest, and additional taxes. Furthermore, maintaining proper records can also help you save money on taxes by identifying deductible expenses.

3. Better Cash Flow Management

Proper bookkeeping helps business owners to have a clear understanding of their cash flow. It helps you to know how much money is coming in and going out of your business. With this knowledge, business owners can identify areas where they can cut costs and make improvements. Accurate records help in identifying where the money is being spent, and you can make informed decisions that can help improve cash flow management.

4. Easier Decision Making

Keeping up-to-date bookkeeping records also makes it easier to make informed decisions. With accurate records, business owners can identify areas where they need to make changes, such as cutting costs or increasing revenue. It also helps in analyzing past financial performance and forecasting future performance, which can guide business owners in setting realistic goals and making informed decisions.

5. Better Planning and Budgeting

Accurate bookkeeping records can help business owners plan and budget for the future. The information derived from proper bookkeeping helps in identifying business trends, tracking growth, and identifying areas where there is potential for improvement. With this information, business owners can create realistic budgets that align with their business goals and objectives.

At the end of the day, keeping up-to-date bookkeeping records is an essential aspect of running a successful business. Accurate records can help you comply with tax regulations, manage cash flow, make informed decisions, and plan for the future. Neglecting bookkeeping can lead to poor financial management, incorrect financial statements, tax penalties, and missed opportunities for growth. Therefore, every business owner should prioritize bookkeeping to ensure that their business is running efficiently and effectively.

IAIC Market Update - February 13, 2023

2023-02-13T19:48:25Z

Last Week in the Markets: February 6th – 10th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Although equity markets lost ground last week, it has been a positive start to the year with North American indexes gaining between two and twelve percent in six weeks.
It appears that inflation has begun to respond to interest rate actions from the Bank of Canada and the U.S. Federal Reserve. Inflation is much higher than the target of 2%, but it has fallen to about 6½%, which is down from the peaks of 8 or 9% experienced last summer. The slowing of interest rate increases, and predictions of further moderation of monetary action, is providing positive momentum for equities.
The labour market has remained remarkably resilient. In January 150,000 and 517,000 jobs were added in Canada and the U.S., respectively. The Canadian unemployment rate has held steady at 5.0%, and just 3.4% in the U.S., which are historically low levels for both countries.
The strong employment numbers and wage gains that have provided fuel to inflation have also allowed corporate earnings to maintain their trajectory until recently. Earnings per share (EPS) are expected to be down about 5% for the fourth quarter of 2022 in the U.S. and about 7% in Canada. The S&P 500 is tracking to report its first year-over-year decline in earnings since Q3 2022, and the TSX is predicted to deliver a slight 1.3% annual earnings gain.
EPS predictions for the first quarter of 2023 are not buoyant. The tighter monetary policy is affecting corporate performance in the currently reported quarter, and the timelier economic news (inflation and employment) are showing improvements and strength. The markets are facing more difficult and more optimistic news simultaneously, and increased volatility may be the immediate result.

Sources: StatsCan inflation StatsCan employment BLS employment BLS inflation FactSet S&P500 FactSet TSX Reuters volatility

What’s ahead for this week?

In Canada, housing starts, manufacturing sales, and wholesale sales for January are scheduled for release. The raw materials and industrial price indexes will be reported on Friday.
In the U.S., January’s consumer and producer inflation will be announced, providing some context for Federal Reserve actions. Retail sales and inventories, capacity utilization, industrial production, manufacturing production, business inventories, building permits, and housing starts will be reported in a very busy week for U.S. economic announcements.
Globally, the Eurozone will report fourth quarter employment, Gross Domestic Product, trade balance and industrial production data. The U.K. will release consumer and producer price indexes.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Wealth Management 101: Spousal RRSPs

2023-02-09T16:14:52Z

Spousal Registered Retirement Savings Plans must not be universally understood by investors, because they are not utilized to their maximum benefit. These financial vehicles were designed to encourage retirement savings with tax breaks at the time of contribution and at the time of withdrawal, just like regular RRSPs.

Spousal RRSPs provide an opportunity for the higher income spouse to make contributions in the name of their spouse while receiving the same tax deduction. Equalizing retirement income between partners can reduce overall household taxes. The greater the income discrepancy between the two partners, the larger the potential benefit from Spousal RRSPs.

How does it work?

The contributor to an RRSP or a Spousal RRSP receives the initial tax benefit. The contributor’s taxable income is reduced by the amount of the contribution. A $5,200 contribution ($100/week) reduces taxable income by $5,200 for the contributor whether it goes into their RRSP or into a Spousal RRSP.

While on deposit, the investments are treated equally, growing tax-free in an RRSP or a Spousal RRSP. When the funds are withdrawn from a Spousal RRSP/RRIF, assuming that the money is held in the Spousal RRSP for at least 3 years, the withdrawals are taxable in the hands of the spouse, not the contributor.

At retirement, the household will rely on their savings in their accumulated in their RRSPs and elsewhere. Both spouses in the couple would begin to withdraw from their RRSPs (or RRIFs). If there is a large discrepancy in the amounts in their RRSPs, one spouse could have a significantly higher income than the other when withdrawals are made during retirement.

All other things being equal, a couple with a high-income spouse and a low-income spouse will pay more income tax than a couple with equal levels of income. There are ways to split income between spouses, but they have limitations and are often under threat of being repealed.

Imagine an Ontario couple with a net income above their basic personal exemptions of $75,000 per year. If it is taxed in only one of their hands, $17,254 would be owed. If the income was split evenly, $37,500 each, the total tax owing would be $15,038, because both stay in lower tax brackets. With 2023 tax rates this couple would save more than $2,200 per year in combined federal and provincial taxes.

The Bottom Line

Together, along with your accountant, we should discuss the possibility of utilizing a Spousal RRSP strategy to reduce taxes now and during retirement.

Have questions?

Underused Housing Tax

2023-02-08T16:46:04Z

Does the UHT apply to you?

The new Underused Housing Tax (UHT) imposes a 1% annual tax on the value of residential real estate considered to be vacant or underused that is owned on December 31 of each year. The government indicated that the tax would target property owned by non-Canadians; however, the scope of filing requirements extends to many Canadian entities and individuals, including private corporations, and trustees of a trust. The first filings and taxes are due on April 30, 2023.

Click the button below to access the UHT Quick Reference Chart.

IAIC Market Update - February 6, 2023

2023-02-06T19:27:40Z

Last Week in the Markets: January 30th – February 3rd, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The NASDAQ moved upward for the fifth consecutive week, the S&P 500 gained 1½%, and the TSX rose almost the same amount as the Dow lost. According to FACTSET half the S&P 500 companies have reported their most recent quarterly earnings, and 70% have exceeded earnings expectations, which is below the 5-year average or 77%. ( Source )
Major news came from the U.S. Federal Reserve on February 1st. “The Fed” echoed previous sentiment from the Bank of Canada by raising its benchmark interest rate, the federal funds rate, by 25 basis points (¼ percent) to a range of 4.5% to 4.75%. Over the same period the Bank of Canada has raised its policy interest rate by the same amount. This was the smallest increase since March 2022, when the Fed began increasing interest rates to combat inflation. Between then and now, the Fed has delivered increases of 50 basis points twice, and 75 basis points four times. ( Source1 , Source2 )
The return to a smaller increase suggests that inflation may have begun to respond to these increases, and the end of rate increases may be approaching. The difference in wording in the accompanying press release, that “the Committee would be prepared to adjust the stance of monetary policy” versus December’s “the Committee anticipates that ongoing increases in the target range will be appropriate” supports the smaller rate increase. ( Source1 , Source2 , Source3 )
Earlier in the week Canadian Gross Domestic Product (GDP) numbers were released by StatsCan that showed our economy edged up 0.1% in November. Gains by services industries were mostly offset by decline in goods production. The early results for December show that GDP was unchanged. ( Source )

What’s ahead for this week?

In Canada, December’s imports, exports, and trade balance will be released on Tuesday, and employment data (full and part-time employment, participation, and unemployment) will be reported on Friday.
In the U.S., a quieter week delivers trade balance, consumer credit, wholesale trade, and the federal government’s budget balance.
Globally, in the Eurozone, retail sales, construction data, and German industrial production are the most important anticipated reports. In Asia, China’s latest CPI and Japan’s household spending are scheduled.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - January 30, 2023

2023-01-30T19:02:59Z

Last Week in the Markets: January 23rd – 27th, 2023

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The Bank of Canada released its latest monetary policy on Wednesday morning, raising the policy interest rate by 25 basis points to 4.50%. Since March 2022 Canada’s central bank has increased this rate from its effective lower boundary of 0.25% by 4.25%.
Some of the criteria underlying the interest rate decision includes Canadian and American consumer and producer inflation, the jobs market (job creation, total employment, labour force participation and unemployment), and economic conditions, globally. The Bank expects domestic inflation to fall back to about 3% this year and near 2% in 2024 as energy prices continue to fall and restrictive monetary policy continues to reduce demand, which will eventually slow the demand for workers. The easing of restrictions in China promotes additional economic growth there, and the Bank of Canada projects that the global economy will grow by 2% this year and 2½% in 2023.
The next scheduled monetary policy release by the U.S. Federal Reserve is February 1, and indications from their leadership of additional rate increases must be included in our central bank’s reasoning.

Bank of Canada release, press conference and Monetary Policy Report

What’s ahead for this week?

In Canada, November’s Gross Domestic Product (GDP) data will be announced. An improvement from its 0.1% decline in October is expected, but the interest rate increases imposed by the Bank of Canada since March are anticipated as a significant deterrent to economic growth.
In the U.S., the Federal Reserve’s Federal Open Market Committee (FOMC) will release a monetary policy update on Wednesday afternoon. The size of an interest rate increase has been one of the most popular points of debate for business and economic news. January’s non-farm payroll report portray the health of the jobs market, which is the companion to inflation as the Federal Reserve’s twin mandates.
Globally, German GDP, trade balance, import price index, producer price index (PPI), retail sales, and consumer price index (CPI), French PPI, and Italian CPI will be reported. The CPI and PPI for the entire Eurozone will be reported in aggregate as the European Central Bank ponders additional rate increases.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

What is a Trusted Contact Person?

2023-01-24T16:46:36Z

A Trusted Contact Person (TCP) is someone you choose who can help us protect your financial well-being.

What is the Role of a Trusted Contact Person?

A TCP is a resource that may help protect you in possible circumstances of financial exploitation or where we may have concerns about your ability to make decisions due to physical or mental incapacity. A TCP is also a valuable resource in situations where we are unable to reach you.

We encourage you to provide consent for us to contact your TCP. This consent is gathered in writing at the time the TCP is named. You may also specify restrictions about when your TCP may be contacted.

We may ask your TCP to provide or confirm information, such as:

Whether anyone may be financially exploiting you;
Your state of mind if we have reasonable concerns about your ability to make decisions involving financial matters;
Your current contact information if we are unsuccessful in contacting you after repeated attempts and where failure to contact you would be unusual; or
To confirm the name and contact information of a legal guardian, executor, trustee, an attorney under a Power of Attorney (POA) or any other legal representative.

Your TCP’s role is to provide or confirm information only – they do not have any authority to make decisions regarding your account and will not be given access to your detailed account information. Your TCP will only be contacted for information where we determine it is absolutely necessary.

Who should you appoint as your Trusted Contact Person?

Your TCP should be an individual who you trust. Typically, your TCP is a family member, close friend, or caregiver.

There is no minimum age requirement for a TCP, however, the TCP should be someone that is mature and able to communicate and engage in potentially difficult conversations with us about your personal situation, including concerns about diminishing capacity.

A client-designated attorney under a POA can be named as a TCP, but you should select an individual who is not involved in making decisions with respect to your account. Your TCP should not be your Financial Advisor on the account.

You may name more than one TCP and may name different TCPs for different accounts.

How is a Trusted Contact Person different from a Power of Attorney (POA)?

A Power of Attorney is a legal document, in which you authorize an individual to make decisions on your behalf should you be unable or choose not to do so yourself.

In contrast, a TCP is essentially an “emergency contact.” Unlike an attorney under a POA, a TCP does not have the authority to make any decision or transact on your behalf.

How do you appoint a Trusted Contact Person?

All clients will be asked to appoint a TCP - both younger and older Canadians can experience health issues that affect their decision making, and both can be victims of financial fraud, including cybercrimes which are becoming increasingly sophisticated.

We will ask you for a TCP when we create a financial plan for you. You should let the person know who you have appointed as your TCP. Feel free to provide them with a copy of this information sheet which explains their role. Please advise us if your TCP has declined the role for any reason.

Although we encourage you to appoint a TCP, if you prefer, you are not required to do so.

You can change your TCP at any time you wish by completing new documentation. If you subsequently name your TCP as a Power of Attorney, we recommend that you appoint a new TCP.

Have Questions?

Contact a Ward & Uptigrove Wealth Management representative at 519-291-3040 or email info@w-u.on.ca

IAIC Market Update - January 23, 2023

2023-01-23T20:06:04Z

Last Week in the Markets: January 16th – 20th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

North American equity markets continued to react to news that economies are slowing.
On Friday, equities rebounded with all major Canadian and American indexes rising.
The up-and-down days of the week produced uneven results for the week for the indexes.
The TSX and NASDAQ gained the amount that the S&P 500 lost, about two-thirds of a percent.
The Dow, comprised of the 30 largest industrials, lost nearly 3% for the week, even after rising 1% on Friday.

What’s ahead for this week?

In Canada, the Bank of Canada will release its latest monetary policy and interest rate announcement on Wednesday morning at 10 am Eastern. Moderating domestic and U.S. inflation data, along with employment and GDP, will heavily influence decisions on rates and liquidity.
In the U.S., the week will start slowly for economic announcements, but gain momentum as fourth quarter GDP, trade balance, real consumer spending and Personal Consumption Expenditures (PCE) are released. Personal income and spending, and the PCE price index for December are scheduled for Friday.
Globally, celebrations of China’s new year on January 22nd have slowed economic activity and raised the concern of further outbreaks of Covid following the extensive amount of travel associated with the holiday. Japan will release its latest CPI, which may provide some insight into the Bank of Japan’s surprise interest rate decision last week .

Of Interest

The annual World Economic Forum in Davos, Switzerland concluded on Friday after 2,500 leaders assembled to discuss “Cooperation in a Fragmented World”. The wide-ranging topics provide some of the latest thinking on global issues, and dozens of recorded sessions are available for viewing here .

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - January 16, 2023

2023-01-16T18:13:36Z

Last Week in the Markets: January 9th – 13th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Thursday’s release of U.S. consumer inflation data continued the run of positive performance for equities so far in 2023. The Consumer Price Index (CPI) declined by 0.1% in December and compared to December 2021 prices have risen 6.5% on a year-over-year basis. Inflation had peaked in June at 9.1% and had been 7.1% in November 2022. Core CPI, which excludes food and energy from the basket of consumer goods and services, rose 0.3% in December and 5.7% over the last year.
“The index for gasoline was by far the largest contributor to the monthly all items decrease, more than offsetting increases in shelter indexes” according to the Bureau of Labor Statistics.
The overall rate of consumer price increases suggests that past monetary policy moves have begun to affect inflation. Both the Bank of Canada and Federal Reserve have raised their policy interest rates by 4% since March of 2022.
Canadian consumer inflation data for December will be released next week, which will provide some guidance for the Bank of Canada. CPI was 6.9% in October and 6.8% in November on a year-over-year basis. The next scheduled interest rate announcement for the Bank of Canada is January 25th and will include the quarterly Monetary Policy Report.

( Source ₁ , Source ₂ , Source ₃ , Source ₄ ,)

What’s ahead for this week?

In Canada, manufacturing sales, wholesale sales, retail sales, and housing starts will be released. The most important report will announce consumer and producer inflation for December.
In the U.S., markets will be closed on Monday for the observance of Martin Luther King, Jr Day. Producer inflation, retail sales, mortgage market index, industrial and manufacturing production, building permits, housing starts, and existing home sales will be reported.
Globally, consumer inflation releases continue with Germany and Italy contributing their country-data, as well as the entire Eurozone report. On Friday the European Central Bank Chair, Christine Lagarde will speak. China will release its fourth quarter Gross Domestic Product, industrial production, retail sales and unemployment rate. The Bank of Japan has an interest rate decision scheduled for Tuesday.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - January 9, 2023

2023-01-09T18:22:35Z

Last Week in the Markets: January 3rd – 6th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Friday provided a welcome uptick in North American equity indexes after jobs data was released. Both the Canadian and American economies continued to generate jobs even after monetary policy moves that have been enacted on both sides of the border. The jobs market demonstrated continued resiliency and provided encouragement on the “interest rate increase vs recession” debate.
“Employment rose by 104,000 jobs in December, and the unemployment rate declined by 0.1 percentage points to 5.0%, just above the record low of 4.9% reached in June and July” according to the Statistics Canada release on Friday. Employment levels increased in six provinces and held steady in two territories. ( Source )
Total nonfarm payrolls rose by 223,000 jobs and the unemployment rate edged down to 3.5% during December in the United States. Job gains were achieved in leisure and hospitality, health care, construction, and social assistance sectors. ( Source )
The U.S. jobs growth in December was the lowest monthly number in 2022, and the average hourly earnings number is softening, showing that Federal Reserve action is working. Both suggest that the Federal Reserve’s interest rate increases and tightening of capital markets are beginning to achieve the desired effects of slowing demand that drives economic growth.
More interest rate increases are expected from the Federal Reserve, while the Bank of Canada has said that future increases require additional analysis. Markets responded positively to the jobs data based on monetary policy effectiveness. ( Source )

What’s ahead for this week?

In Canada, November’s building permits, signifying strength or weakness in the construction sector and housing market will be announced. Bank of Canada Governor, Tiff Macklem, will participate in a panel discussion on the risk of climate change.
In the U.S., Federal Reserve Chair, Jerome Powell, will speak at the Sveriges Riksbank International Symposium in Stockholm on Tuesday. On Thursday, December and year-over-year consumer inflation data will be released.
Globally, the European Central Bank will release its latest economic bulletin. Great Britain will report its Gross Domestic Product report for December, the fourth quarter and year-over-year. Italian retail sales, French imports and exports, and German GDP will also be announced. Both China and Japan will release CPI and Producer Price Index (PPI) data for December.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - January 3, 2023

2023-01-03T19:15:16Z

Last Week in the Markets: December 26th – 30th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

It was a short week for Canadian traders with markets shuttered on Monday and Tuesday for the observance of Christmas Day and Boxing Day. U.S. markets do not observe Boxing Day.
Despite the lower trading volumes typical for this period, the equity markets continued their recent path with additional losses. The North American indexes lost only small amounts during the most recent week but have lost substantial value over the past year. The TSX and Dow declined by nearly 9% for the year. The S&P 500 and NASDAQ lost nearly 20% and 34%, respectively over the last year.
Since the last Weekly Market Update two important indicators were released in Canada.
November’s consumer inflation data was reported on December 21st. The year-over-year rate in November was 6.8%, following October’s 6.9% annual increase. Gasoline prices fell 3.6% in November and are up by 13.7% over the past year. Grocery prices have risen 11.0% year-over-year, and prices for housing have risen 7.2% over the same period as mortgage rates and rents rose. ( Source )
On December 23rd Gross Domestic Product (GDP) numbers showed the Canadian economy had grown 0.1% in October, down from September’s 0.2%. Service industries (arts, entertainment, recreation, accommodation, food services, transportation, warehousing, and the public sector) expanded, while mining, oil, gas, and manufacturing declined. ( Source )
The “third estimate” of U.S. third quarter GDP was announced on December 22nd and showed that the economy expanded at an annualized rate of 3.2% during Q3 after declining 0.6% in Q2. ( Source )
The progress of monetary policy against inflation and on economic output (i.e., GDP) will guide markets well into 2023.

What’s ahead for this week?

In Canada, on Friday the latest employment numbers, for December, will be released. The strength (or weakness) in the numbers may foreshadow Bank of Canada monetary policy decisions.
In the U.S., December’s jobs information, labour force participation and unemployment rate will be reported by the Bureau of Labor Statistics on Friday.
Globally, consumer inflation data will be announced for Germany in particular and the entire Eurozone more generally. Like other jurisdictions, inflation numbers will influence central bank policy.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Charitable Gifting

2022-12-20T16:50:39Z

As the holiday season nears, many Canadians will make the bulk of their charitable donations for the calendar year. While many of us may not have the cash resources for charitable gifting, we may have investment assets that could be used instead of an outright cash gift. The following provides some helpful information if you are considering this strategy.

According to Statistics Canada, Canadians donate $10.6 billion annually to charitable and non-profit organizations for altruistic reasons. However, it’s still important to understand the tax benefits available when you have qualifying charitable donations to include on your tax return.

Charitable Giving Using Investment Securities

Most charitable organizations accept investment securities as gifts or donations instead of cash. These are referred to as donations in-kind and are eligible for the donation tax credit equal to the market value of the investment at the time it is transferred to the charitable organization.

Have questions?

When gifting an investment security to a registered charitable organization, Canada Revenue Agency (CRA)does not require the taxpayer to recognize any taxable gains associated with the donated investment securities.

Using an example to illustrate, let’s say an individual wants to donate $10,000 to a registered charity. In order to fund that donation, this individual needs to sell $10,000 worth of stock which they originally purchased for $6,000. When the donor files their tax return, they will need to include the $4,000 capital gain income ($10,000 - $6,000), of which 50%, or $2,000, is taxable. If this individual has a marginal tax rate of 40%, the act of selling those shares to fund their donation added $800 to their tax bill ($2,000 x 40%).

Alternatively, if the donor in the example above had gifted the shares to the charity, they would not have had to recognize the capital gain and saved $800 in tax while receiving a tax receipt for the $10,000 donation. So, if you are thinking of donating, check your investments and consider making the donation by a transfer of securities – you may be able to save on tax and make a larger charitable contribution as a result. And most importantly, you will be contributing to a worthy cause.

NOTE: These are general figures for the purposes of illustration. We recommend you seek appropriate professional advice before deciding on your charitable gifts

2022 Year End Newsletter

2022-12-19T19:54:45Z

Accounting

Tax Updates:

Agriculture Updates:

Human Resources Solutions

Wealth Management

Firm News

Please Note Our Holiday Shutdown

The offices of Ward & Uptigrove will be closed from 3:00 pm on Friday, December 23rd and reopening in the New Year on Tuesday, January 3rd.

Underused Housing Tax Act – New for 2022

During the year, the Government of Canada enacted the Underused Housing Tax (UHT) Act. This Act implements an annual 1% tax on the value of vacant and underused residential properties directly or indirectly owned by non-resident, non-Canadians.

Unfortunately, the UHT Act will impact all our corporate, partnership and trust clients which own residential property. Given the broad application of the UHT Act, it is surprising it has not received the appropriate attention by Canadians.

Selected key facts:

It applies on a calendar year basis (beginning with 2022).
Applies to a person who is the owner of residential property in Canada on December 31st of the particular calendar year.
Residential property held personally by a Canadian permanent resident or Canadian citizen (referred to “excluded owners”) would not be subject to the UHT tax or UHT annual return.
Residential property held by a Canadian corporation wholly-owned by residents of Canada, a partnership, or a trust (all are defined terms) would not be subject to the UHT tax but will still be required to file the UHT annual return in order to be exempt from the UHT tax. Failure to file a UHT return may mean loss of the exemption and UHT being levied on the property.
If a UHT annual return is not filed, a late filing penalty would apply of at least $5,000 for individuals and $10,000 for other entities. This penalty is an annual penalty and is not determined based on the number of days the return is late.
The annual UHT return must be filed with the CRA by April 30th of the following year for all types of property owners. Fiscal years of corporations and partnership do not change this due date. The due date for the UHT tax is also April 30th.
The CRA has not yet released the required form for the annual return.

There is much more to this legislation than the selected summary above. The purpose of this article is to inform our clients of this legislation and new filing requirement. We will send an update once the Canada Revenue Agency has released the forms for the annual return.

In January, Ward & Uptigrove will start to identify our affected clients. As we cannot guarantee we will be able to identify all our clients that will be impacted by the UHT Act, please contact your Ward & Uptigrove advisor if you:

Own residential property personally and are not a Canadian permanent resident or Canadian citizen, or
Own residential property through a Canadian corporation, partnership or trust.

New Trust Reporting Rules - Delayed to 2023

Since 2018, the Department of Finance proposed to implement a requirement for trusts to file a T3 Trust Income Tax and Information Return and provide additional information. The proposed rules were initially expected to apply to 2021 and subsequent taxation years. Since then, these rules have been delayed twice with the new trust reporting rules now applying to trusts with taxation years ending after December 30, 2023.

Two significant parts to these new trust reporting rules are the following:

The introduction of enhanced reporting to the Canada Revenue Agency to disclose personal information on all the parties to trusts such as the trustees, beneficiaries, and settlor; and
The introduction of trust reporting as it relates to bare trust arrangements.

Examples of where bare trusts could exist include, but are not limited to, the following:

Parents on title to a child’s house for mortgage financing;
Child on title to a parent’s house for ease of transfer on death and probate reasons;
Parents or grandparents on investment accounts held in trust for children or grandchildren;
Parents placing children’s name on financial accounts to look after their finances should they become incapacitated, either mentally or otherwise; or
In the case of a bare trustee corporations.

With the recent delay of implementing these new trust reporting rules, taxpayers have one more calendar year to prepare for the above changes.

It is important to note with the new trust reporting rules, there will be two new penalties to consider:

A penalty for not providing the required information of $25 per day with a minimum penalty of $100 and a maximum penalty of $2,500.
Where a trustee has knowingly or in circumstances amounting to gross negligence not reported or made a false statement in relation to the trust reporting requirements, such person will be liable to a penalty equal to the greater of $2,500 or 5% of the highest fair market value of the trust property at any time of the year.

If you are aware of the existence of a bare trust arrangement, please let us know as soon as possible so we can properly gather all the required information in preparation for these new trust reporting rules.

Miscellaneous Tax Matters

Some Key Numbers for 2023

Some key amounts for 2023 that have been increased due to the 6.3% indexation increase:

Tax Free Savings Account (TFSA) annual contribution limit $6,500
Lifetime capital gains exemption limit (non-farming) $971,190
Federal basic personal amount $13,521
OAS repayment threshold $86,912

*for more numbers, see the table below

Interest rates for the first calendar quarter of 2023 will be increasing to:

4% for the prescribed rate (this is the rate used to calculate taxable benefits for employees and shareholders for interest-free and low-interest loans)
6% for refund interest for individuals
8% for arrears and instalment interest

As of writing this article, the 2023 automobile allowance rates have not been released by the CRA yet.

Immediate Expensing Reminder

As noted in our summer 2022 newsletter, the eligibility period for acquiring eligible property by a Canadian-controlled private corporate will end on December 31, 2023. Individuals and Canadian partnerships have one additional year, being December 31, 2024, to acquire eligible property.

The eligible property must be considered available for use by the above noted dates.

Ontario Annual Information Return – Corporate – Company Key Letters

As noted during our summer 2022 newsletter, we require the company key for all our corporate clients in order to be able to continue to file the Ontario annual information return. While our administrative team has been following up with our clients during the past year regarding these letters, we are still waiting on responses from many of you. If you have not provided us a copy of the company key letter, please do so as soon as possible.

Tax-Free First Home Savings Account – New for 2023

Included in Bill C-32, which is now considered law, is the Tax-Free First Home Savings Account (“FHSA”) that was first introduced in the 2022 federal budget.

The FHSA is a new registered plan that would give prospective first-time home buyers the ability to save up to $40,000 on a tax-free basis.

Some key elements to the FHSA:

Like a Registered Retirement Savings Plan (“RRSP”), contributions would be tax-deductible
Like a Tax Free Savings Account, withdrawals to purchase a first home, including from investment income generated in the plan, would be non-taxable
There will be an $8,000 annual contribution limit
The government expects that Canadians will be able to open and contribute to an FHSA at some point in 2023 and would be permitted to make the full $8,000 annual contribution limit
Conditions to open an FHSA:
Resident of Canada
At least 18 years of age
Must be a first-time home buyer, meaning that you have not owned a home in which you have lived at any time during the part of the calendar year before the account is opened or at any time in the preceding four calendar years.
FHSA would have a maximum life of 15 years from when the account is opened. If it’s not used, it can be transferred to an RRSP account without impact an individual’s available RRSP contribution room.

There are many other rules to the FHSA. The above is intended to be a brief summary of this new registered plan that will be available in 2023.

Property Flipping Rules – New for 2023

Included in Bill C-32, which is now considered law, is the new anti-flipping rules for residential property that was first introduced in the 2022 federal budget. Starting January 1, 2023, profits from disposition of residential property that was owned for less than 365 days will be deemed to be business income and not capital gain that may then be eligible for the principal residence exemption.

Exceptions to this new proposed rule are the following:

Death of the taxpayer or a related person to the taxpayer
Related person joining the taxpayer’s household (such as birth of a child, adoption, or care of elderly parent) or the taxpayer joining a related person’s household
Breakdown of marriage or common-law partnership of the taxpayer (if living apart for at least 90 days prior to the sale)
Threat to the personal safety of the taxpayer or a related person
Serious illness or disability of the taxpayer or a related person
Eligible work relocations of the taxpayer or common-law partner (where the new home location is at least 40 km closer to the work location than the old home location)
Involuntary termination of the employment of the taxpayer or their spouse or common-law partner
Insolvency of the taxpayer
Destruction or expropriation of the property

Disability Tax Credit Automatic Approval for Type 1 Diabetes

In June 2022, the federal government enacted a change to the Income Tax Act to expand the criteria for eligibility for the Disability Tax Credit (DTC) for individuals with either:

Mental function impairment, or
A life-sustaining therapy requirement.

With this change, any Canadian with type 1 diabetes will automatically be approved for the disability tax credit, under the expanded life-sustaining therapy category. This eliminates the previous requirement to prove care exceeding 14 hours per week.

The DTC is a non-refundable tax credit helping those who qualify, or their caregivers, to offset some of the costs associated with the disability. Qualification for the DTC can also open the door to additional federal and provincial programs such as the:

Registered disability savings plan (RDSP),
Canada workers benefit, and
Child disability benefit.

CRA is encouraging all who qualify to apply prior to filing their 2022 personal income tax return (T1) to avoid any delays in assessment. A medical doctor is required to complete Form T2201 for submission to CRA. If applicable, in some cases the DTC can be applied to your prior years returns, as well.

Tax Planning – Agriculture

Each year, near the end of November and into December you should review if your taxable income will be higher than normal for 2022.

Please review the options below which could be used to minimize your tax liability:

Prepaid Expenses - If you have the funds available, an effective way to defer taxes is to prepay for 2023 expenses prior to December 31st. Examples of common prepayments are for crop inputs and livestock feed.
Asset purchases - If you were holding off an asset purchase until 2023, you might consider purchasing the asset before December 31st to take advantage of immediate expensing of asset purchases or accelerated capital cost allowance (CCA). You could have the ability to immediately expense the entire cost of the asset in the year you purchase the asset (excludes buildings, quota, concrete work). For the excluded assets you could have the ability to receivable an additional 50% CCA in the year of purchase. Please note the asset purchased must be “available for use” prior to the end of the year, to be entitled to this. The limit for immediate expensing is up to $1.5 million per associated group.
Payables – Pay invoices in 2022 rather than waiting until 2023. Paying as many expenses as possible before year-end will result in more deductible expenses for 2022 and will reduce your taxable income for the current year.
Holding inventory - Delay the sale of inventory (crops, livestock) until 2023. If you were planning on selling some inventory (crops, livestock) before year end but you do not need the cash flow until after year end, this can also be an effective method to defer taxes.

It is important to note that the options above act as a tax deferral, meaning you are reducing taxes in the current year, but you should expect to pay the taxes at some point in subsequent years.

If you need assistance with tax planning this year, please reach out to your Accountant to go over the options that works best for you.

Ontario Regional Opportunities Investment Tax Credit (ROITC)

Canadian-controlled private corporations are eligible to receive a 10-20% refundable tax credit if they purchase, construct or renovate a building (included in Class 1 or 6) over $50,000 and up to $500,000. The max credit available for additions in the periods below are:

March 25, 2020 – March 24, 2021 - $45,000 tax credit
March 25, 2021 – January 1, 2023 - $90,000 tax credit

This credit is available for each fiscal year in the qualifying period.

The building investment must be made in a designated region to qualify for the tax credit. The credit is issued based on the building location not the location of the corporation’s head office. Please note that any investment in Wellington County WILL NOT qualify for this tax credit as it is not in the designated region. A full listing of the designated regions are located on Ontario’s website .

If your company is a part of an associated group of companies, only ONE company in the group can claim the tax credit each year. The other companies in the associated group will need to elect in writing to waive their right to claim the ROITC.

Poultry and Egg On-Farm Investment Program (PEFIP)

PEFIP is a 10 year program to support on-farm investments in:

increasing efficiency or productivity
improving on-farm food safety and biosecurity
improving environmental sustainability
responding to consumer preferences (improving animal welfare, adopting alternative housing systems, transitioning to organic production, etc.)

Producers who held quota on January 1, 2021 must register with the program prior to submitting a project application. The registration process is to validate your license information and confirm your maximum funding.

Funding is determined by the amount and type of quota holdings. Young producers (35 years and younger on Jan 1, 2021) are eligible for an additional cost share.

Applicants may apply for eligible activities that started on or after March 19, 2019 and costs that were incurred on or after March 19, 2019. Applicants may submit more than one Project Application prior to the program end date of March 31, 2031 providing the applicant does not exceed their maximum funding.

For assistance with registration or submitting a project application please contact your accountant. For applications submitted to date, the timeline for receiving funding has been about six months.

The applicant guide can be viewed by following this link .

Accounting for Biological Assets – ASPE Section 3041

The new section of accounting standards providing guidance on accounting for agricultural inventories is effective for fiscal periods beginning on or after January 1, 2022.

This new section will require a distinction be made between agricultural inventories and biological assets with each being reported separately on agricultural producers' financial statements. Agricultural inventories can be measured at their cost or net realizable value. Productive biological assets must now be initially measured at cost and in most cases will be recorded as long-term assets on the financial statements as opposed to being recorded as inventory and a current asset.

Productive biological assets are:

Held for use in the production or supply of agricultural inventories or other productive biological assets (e.g. breeding livestock)
Acquired or developed for use on a continuing bases with other than short productive lives (i.e. longer than one year) and
Not intended for sale in the ordinary course of business

Agricultural producers’ financial statements will now include additional disclosure requirements for any biological assets and agricultural inventories. Transitional provisions will be considered for each client to reduce the administrative time in applying these new reporting standards. Your accountant will review the effect of the new standards with you during the preparation of your year-end financial statements.

Deadlines - AgriStability & AgriInvest

AgriStability: Deadlines for the 2022 program year

June 30, 2022: Pay fee, submit New Participant Form or cancel coverage
December 31, 2022: Apply for interim payment
December 31, 2022: Pay fee – final deadline (20 per cent increase)
June 15, 2023: Submit T1163 (individuals)
June 30, 2023: Submit Statement A (corporations, trusts and special individuals)
June 30, 2023: Submit Year-end report and Claim form
December 31, 2023: Final deadline – Report your 2022 farm income to Canada Revenue Agency

AgriInvest: Deadlines for the 2022 program year

June 15, 2023: For individual participation in AgriStability and AgriInvest, submit 2022 tax forms to Canada Revenue Agency
June 30, 2023: For corporations, trusts and special individuals participation in AgriStability and AgriInvest, submit 2022 tax forms to Agricorp
September 30, 2023: For participation only in AgriInvest, submit 2022 Statement A to Agricorp and 2022 T1163 to Canada Revenue Agency

Business – Leadership is a Competitive Advantage

As an entrepreneur, you and your team’s ability to develop and maintain relationships is a key factor for business success. In a labour market where candidates have so many employment options; effective leadership skills will help you build trusting relationships and keep your people engaged and motivated. Forbes’ article : “10 Essential Leadership Skills Every Entrepreneur Should Continually Hone” lists the following:

Listening to Understand
Emotional Intelligence
Ability to Delegate
Strategic Thinking
Communication
Financial Knowledge
First principle Mindset
Building Trust
Self-Awareness
Self-Development

W&U’s Emerging Leaders Development Program helps participants elevate their leadership skills in all the areas listed above. For more information on our Emerging Leaders’ customizable program or to register for our February 2023 upcoming online program, click here . With W&U’s integrated services, we are here to help you achieve your business goals.

Electronic Monitoring

As of October 11, 2022, employers with 25 or more employees are required to have a written policy on the electronic monitoring of employees. The policy must establish whether the employer engages in electronic monitoring of employees, and if so, how. The policy must also describe in which circumstances monitoring occurs, and for what purpose the information obtained through electronic monitoring may be used.

Employers are to provide the policy to staff within 30 days of starting in their position, within 30 days of policy in place, and within 30 days of any changes to the policy.

The policy, however, does not:

Establish a right for employees not to be electronically monitored by their employer, nor;
Create any new privacy rights for employees.

Contact HR Solutions with any questions you may have about electronic monitoring in the workplace.

Minimum Wage Increase

Did you know minimum wage increased in Ontario as of October 1, 2022?

General minimum wage is now $15.50/our in Ontario.

Visit Ontario.ca for details, or contact a W&U Human Resources advisor to learn more.

Retirement - Ready or Not

If you’re retired, or soon to be, you’re likely a Canadian baby-boomer. You are seeking more information about your retirement beyond merely finances, and advisors are uniquely positioned to provide you with additional retirement insight and planning.

Currently, Canadians aged 65 years old, can expect to live an additional 22 to 24 years, on average. Not only are people living longer, they are leading more active retirements. Achieving success in retirement no longer requires the bills to be paid, and to sit at home awaiting the arrival of the grim-reaper!

To gain access to the investable assets today, and manage them into retirement, advisors should examine their clients in a broader, more complete perspective.

Without planning that includes more elements than just finances, retirement and the years leading up to it can be anxiety laden. The period that should be relatively carefree will be the opposite.

Financial planning is a critical element of all retirement plans, but an analysis that focuses solely on money will not prepare you for a successful retirement. Additional items like those mentioned above must also be addressed.

Retirement Planning Services - NEW!

The stress and worry of wondering if you are prepared for retirement can significantly impact your daily life.

Are you on the right track?

What are you missing?

Will you have to delay retirement?

A retirement plan, while seemingly daunting, does not have to be so intimidating, nor expensive.

Tamara Campbell, Wealth Management Advisor has been with Ward & Uptigrove Wealth Management (WUWM) for 7 years and is available to help you answer those hard questions.

At WUWM, you can now get a basic retirement plan for a discounted, flat rate of $999. You don’t have to invest, and you don't have to move accounts.

Peace of mind and savings you cannot afford to miss. Learn more here or contact WUWM .

RRSP Contribution Reminder

The RRSP Contribution Deadline is March 1, 2023.

What do you need to know?

Contributions to your RRSP are deducted from your taxable income.
Withdrawals are subject to income tax, or at death (unless the RRSP is transferred to a surviving spouse).
Contribution amounts are based on your income level.
18% of your income can be deposited into your RRSP with the annual limit of $27,830 for the 2021 tax year and $29,210 for 2022.
Contribution room from previous years that has not been used is carried forward.
Contributions can be made at any time during the year, and until the end of February for the prior year’s tax return.

Contact your Wealth Management representative with any questions you may have.

By the Numbers

Ward & Uptigrove Wealth Management Introduces New President

The Partners of Ward & Uptigrove are proud to share that Luke MacLennan was appointed the new President of Ward & Uptigrove Wealth Management earlier this year. Luke takes over the role from Mich Landry who, after serving as the President of the organization for nearly 30 years, wants to reduce his workload, while still being able to be continue to serve his clients as their Wealth Management Advisor.

Luke joined Ward & Uptigrove Wealth Management in 2016, bringing over 10 years of experience in the wealth management industry. Previously, Luke worked with the firm’s related portfolio management company, Independent Accountant’s Investment Counsel Inc. where he served on the organization’s management team.

Looking ahead, Luke is excited to have the opportunity to lead the wealth management division of Ward & Uptigrove and will ensure the primary focus of the organization will be to continue to provide clients with the highest level of service.

Staff Updates

As 2022 comes to a close, we reflect on our 64th year of growth and progression with our staff. We are proud to congratulate the following staff members on their development and progression into new roles.

Partner Announcement

We are excited to announce that, effective January 1, 2023, the Partnership will grow by three.

Principal Announcement

We would also like to congratulate the following staff members on taking the next steps along their leadership journey. We look forward to seeing these individuals continue to develop and progress within the firm, and we thank them for their ongoing contributions.

Agriculture Department

Progressions

Business Department

Progressions

Years of Service

Congratulations to the following staff members on reaching these career milestones. We thank you for your contributions and loyalty to the firm:

5 Years of Service

15 Years of Service

20 Years of Service

25 Years of Service

Welcome!

We are thrilled to welcome the following new staff members to our team:

Firm Updates

We are excited by our continued growth, which means we are searching for qualified accounting staff to fill new roles. W&U offers incredible opportunities for personal and professional development through a long-standing mentorship program and competitive compensation packages.

We encourage all levels of accountants to reach out or join our talent community at wardanduptigrove.com/careers . A CPA designation is not required in order to be considered. Please email careers@w-u.on.ca if you or someone you know is looking for a change.

Happy Holidays

from the Partners and Staff of Ward & Uptigrove

IAIC Market Update - December 19, 2022

2022-12-19T19:33:37Z

Last Week in the Markets: December 12th – 16th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

For two consecutive weeks, monetary policy announcements influenced North American equity markets. On December 7th the Bank of Canada increased its overnight rate by ½% (50 basis points), and on December 14th the U.S. Federal Reserve increased its benchmark rate, the federal funds rate, by the same amount. The central banks of both countries have increased interest rates at their last seven consecutive opportunities. Also, both institutions have raised their rates by 4¼% since March 2022.
At least one important difference has emerged. The Bank of Canada has said that future interest rate increases may not be necessary, while the Federal Reserve is anticipating additional increases to control inflation which is well above both of their targets of 2%. The Bank of Canada stated, “. . . Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target”, while the Fed said, “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.” ( BoC statement, Fed Statement )
On December 15th, the European Central Bank (ECB) raised its rates with an identical 50 basis point increase. The ECB’s equivalent to the Canadian overnight and the American federal funds rate is the deposit facility rate and is now 2.0%, less than half the comparable rates in North America. ( Source )
The fear of a recession caused by rising rates that slow economic growth sufficiently to shrink inflation is the major concern for markets. Equity markets dropped immediately following the Fed’s announcement and accompanying commentary, and on the following day more than 90% of S&P 500 stocks dropped as the overall index fell more than 1%. ( Source )

What’s ahead for this week?

In Canada, after a slow week for economic announcements last week, three important indicators are scheduled for release: October’s retail sales and Gross Domestic Product, and November’s Consumer Price Index.
In the U.S., November’s building permits, new home sales, existing home sales and durable goods orders, December’s consumer confidence, and third quarter’s GDP data will be released.
Globally, no major economic announcements are planned.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - December 12, 2022

2022-12-13T15:04:26Z

Last Week in the Markets: December 5th – 9th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

For many the most significant change affecting daily life was the drop in the price of crude oil. It will help lower inflation and improve the perception of inflation through the gas pump. The price of oil is below its 2022 start, and within pennies of its price from one year ago.
However, the major domestic economic news was the action taken by the Bank of Canada on Wednesday morning. The " overnight rate " was raised by 0.5% (50 basis points). It was the seventh consecutive increase, dating back to early March. During the last 9 months the rate has risen from its effective, lower boundary of 0.25% to 4.25%.
During the announcement, Tiff Macklem, Governor of the Bank of Canada indicated that a pause in rate hikes was a possibility when he said, “But we recognize that we have raised interest rates rapidly and that their effects are working their way through the economy. In other words, we are moving from how much to raise interest rates to whether to raise interest rates.” The widely held belief is that interest rates will reduce demand to match supply and reducing and eliminating rate hikes at the appropriate times will allow inflation to be mitigated without pushing the economy into a recession. ( Source1 , Source2 , Source3 )
More inflation news emerged last week with the U.S. Producer Price Index (PPI) release. The PPI measures inflation at the wholesale level. Producer prices rose 0.3% in November and 7.4% for the 12 months ending in November. In October, the 12-month PPI increase was 8.1%. The PP began 2022 over 10% and had exceeded 11% for four months (March to June) before moving downward during late summer and autumn to its current level. ( Source )
Inflation news will be in sharp focus again next week as U.S. consumer prices and a Federal Reserve monetary policy announcement are scheduled.

What’s ahead for this week?

In Canada, no major economic announcements are scheduled.
In the U.S., consumer inflation data will be released on Tuesday, and may provide an indication of the Federal Reserve’s monetary policy actions scheduled for this coming Wednesday.
Globally, on Thursday the European Central Bank will release their interest rate decision, and the Eurozone will publicly announce consumer inflation on Friday.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - December 5, 2022

2022-12-05T20:30:22Z

Last Week in the Markets: November 28th – December 2nd, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Gross Domestic Product and jobs data heavily influenced markets, and the inferences drawn from those releases on upcoming interest rate announcements provided an additional batch of fodder for analysts.
The Canadian economy expanded slightly during the third quarter, rising 0.7%. It was the fifth consecutive quarter of rising GDP. Oil and gas production grew 1.8% in September when a new record for crude bitumen production was set. Agricultural production rose 0.7% for the month, which is the twelfth consecutive month of increased output. ( Source )
During July, August and September 2022 the U.S. economy grew in real GDP terms at an annualized rate of 2.9%, compared with a decline of 0.6% in the second quarter. Leading the growth were increases in exports, consumer spending, and government (local, state, and federal) spending. ( Source )
Employment was little changed (+10,000) in November, and the unemployment rate declined by 0.1 percentage points to 5.1%” according to another StatsCan release. ( Source )
Total non-farm payroll employment rose by 263,000 last month in the U.S. The unemployment rate was unchanged at 3.7% as the participation rate held steady. ( Source )
GDP and jobs data show the resilience of the Canadian and, especially, the American economy as monetary policy has been tightened in 2022. The next interest rate announcements by the Bank of Canada and Federal Reserve on December 7th and 14th, respectively, are subject to speculation. The speech on Wednesday from Fed Chair, Jerome Powell, and the immediate market bump demonstrates the influence of monetary policy on equity values.( Source1 , Source2 )

What’s ahead for this week?

In Canada, October’s imports, exports, and trade balance, building permits, and industrial utilization will be announced. On Wednesday at 10 AM EST the Bank of Canada will make an interest rate decision.
In the U.S., several economic indicators are scheduled including factory and durable goods orders, imports, exports, and trade balance, Producer Price Index (PPI), core PPI, gasoline, crude oil and heating oil inventories.
Globally, Eurozone GDP, retail sales and employment for Q3, China’s Consumer Price Index, PPI and trade balance, Japan’s GDP and household spending will be reported.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - November 28, 2022

2022-11-28T19:37:23Z

Last Week in the Markets: November 21st – 25th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The U.S. Thanksgiving holiday closed American markets on Thursday and Friday afternoon
During this quieter than usual time, equities in Canada and the U.S. performed well last week as the major indices rose 1-2%. Since their closing levels of September 30th, the indexes have risen as follows, TSX 10.5%, S&P500 12.3%, Dow 19.6%, NASDAQ 6.2%. The overall increase during the past two months has been inconsistently achieved with several days of sharp peaks and narrow valleys. The sharper days of gain and loss are in contrast to the volatility index, which has fallen from 31.8 to 20.5 over the same period and is at its lowest level since August. ( Source )
The lower levels of volatility are an anticipation that central banks will begin raising interest rates more slowly. The release of the Federal Reserve’s meeting minutes showed that this sentiment is building with the Fed’s Federal Open Market Committee, who sets monetary policy. The realized prediction calmed markets, despite indications that more interest rate increases are anticipated. ( Source1 , Source2 , Source3 )

What’s ahead for this week?

In Canada, Gross Domestic Product (GDP) for September and the third quarter will be released. Employment data for November will be reported on Friday.
In the U.S., after Thanksgiving’s relatively quiet week the announcements increase to include pending home sales, house price index, mortgage applications, mortgage market index, GDP, GDP price index, consumer and personal spending, wholesale, and retail inventories. The week concludes with government, manufacturing, and non-farm payrolls.
Globally, the FIFA World Cup continues to distract many countries from economic developments like OPEC’s production meeting, Eurozone’s consumer confidence, business climate and inflation expectation, and Consumer Price and Producer Price Indexes. China’s rapidly growing covid cases and response may foreshadow future releases from the second largest economy.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

The Benefits of a Group RRSP

2022-11-25T18:45:14Z

While Registered Pension Plans ruled the retirement saving scene in the past, the high cost of these plans has had employers looking for cheaper plans for their employees.

Group RRSP’s offer a flexible, cheap alternative to traditional pension plans and have become a popular option for some employers.

Did You Know?

A Group RRSP does not require employer contributions.

A Group Registered Retirement Savings Plan (Group RRSP) is an employer sponsored retirement savings plan. Group RRSP’s have many similarities to individual RRSP’s with the only difference being that they are administered on a group basis.

The plans are made up of employee and employer contributions, but unlike traditional pensions the employer is not required to contribute any amount to the plan. This option may be attractive to business owners who want to be able to offer a retirement plan to their employees but do not necessarily have the desire or income to fund a pension plan.

The only cost to a group RRSP is the labor cost of deducting the employee’s contributions from their payroll.

A Group RRSP offers great flexibility for all.

The employer isn’t the only party to benefit from a group RRSP. Group RRSP’s offer the employees greater flexibility in how they invest their money, how much they invest, and what happens to the money once they leave the company.

RRSP’s are not regulated by provincial pension laws. This means greater flexibility to the employee on when and how much money they can draw out of their plans. There may be restrictions on withdrawals from a Group RRSP while an employee is active with a company, but once the employee terminates employment, they have the freedom to do what they like with the funds.

A Group RRSP can be transferred.

Unlike traditional pensions that have to remain locked in, a group RRSP can be either transferred to the individuals personal RRSP, purchase an annuity, or be taken in cash. Another perk are the tax benefits that the employee will reap. All contributions to a group RRSP are deductible to the employee and tax sheltered until the time of withdrawal.

The Bottom Line

Group RRSP’s can be a great retirement savings alternative to a traditional pension plan. Greater flexibility and increased investment options have made them a popular savings plan for employers.

Sound intimidating?

Your Financial Planner can work with you to find the right Group RRSP option for your organization. Contact us to learn more.

National Financial Planning Week - Inheritance Planning

2022-11-24T16:51:30Z

John and Mary have worked hard to build a successful business. A business that John hoped he would pass down to one of his three children. Mary encouraged her children to follow their passions; therefore, she was less confident than her husband that one of their children would take over the business. And unfortunately, the children weren't interested in taking over the business.

John and Mary are ready to retire and agree to sell the business. With sizable proceeds, they allocate suitable funds to support a very comfortable retirement and decide to leave an inheritance for each one of their children. Sounds reasonable, right? Perhaps.

However, how can they ensure the children use the inheritance for something meaningful and purposeful?

Plan the Inheritance

What is the intended purpose? Is it to:

enhance their children's lifestyle?
protect the assets from marital breakdown or litigation?
provide education funding for their grandchildren? or;
perhaps the intent is to create multi-generational family wealth?

Considering the purpose, John and Mary can decide if they gift some of the money now or maximize the inheritance to their heirs after their deaths. Whatever they decide, they will need to be clear about the purpose of the inheritance to ensure their plan is appropriately structured.

Commit to a Plan

John and Mary need to commit to a plan that will communicate the purpose of the inheritance. Inheritance planning requires careful consideration supported by a team of professionals with specialized knowledge, including:

A Lawyer
To draft the documents needed, such as Wills, Trusts, Powers of Attorney, etc.
An Accountant
to ensure the plan is structured in the most tax-efficient manner and, with the in-depth knowledge of their business, will provide a smooth and effective transition of their business, converting their lifelong working capital into cash.
A Certified Financial Planner
help John and Mary create a comprehensive financial plan to determine how much of the business proceeds will be necessary to fund their lifestyle during their retirement and how much can be immediately allocated to the inheritance plan.

Inheritance planning is not so rigid that it's carved in stone, but it can be costly in the future if it's not structured well in the beginning.

Take a Disciplined Approach

Taking a disciplined approach will help John and Mary avoid the many nightmares that often come with managing family wealth.

We've all heard the stories of elder abuse as one child exerts undue influence on the parents. For example, convincing them to pay their debts, buy them a car, or provide money for a lifestyle they've not earned, all at the expense of the parents and other inheritors.

A disciplined inheritance strategy can protect John and Mary's wealth. Ensuring it is used for the purposes they initially outlined in a fair and structured manner.

Practice Open and Honest Communication

The most important issue in inheritance planning is having open and honest communication between those passing the wealth on and those receiving it.

In this case, John and Mary should involve their three children in the process to understand their parents' purpose, what they are committing to, and how they plan to distribute their wealth. This open communication provides a platform for the children to ask questions and better understand their parents' wishes to know what to expect.

Having an open communication strategy can have a tremendous impact on maintaining family harmony and minimizing discourse between the inheritors.

Once John and Mary have created their inheritance plan and communicated their intentions to their children, they can get on with enjoying their freedom in retirement. They can spend their days enjoying the fruits of their many years of labour. Instead of worrying about spending their children's inheritance, they can rest assured that they have the plan to achieve their retirement goals and pass on their wealth strategically and meaningfully.

H ave Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - November 21, 2022

2022-11-21T20:47:16Z

Last Week in the Markets: November 14th – 18th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Interest rates, inflation and recession concerns continued to influence markets last week. The mixed news, and its implications had equities falling for the week, albeit only slightly.
For the second consecutive week, a key U.S. inflation indicator has fallen. The Producer Price Index (PPI), which measures inflation at the wholesale level, had its year-over-year rate at 8.0% for October. The annualized rate of producer inflation has dropped from over 10% earlier this year and a peak in March 2022 of 11.7%. On November 10th the latest Consumer Price Index (CPI), also for October, was reported. The annual inflation rate dropped to 7.7% from September’s 8.5%. ( Source1 , Source2 )
Domestically, Canadian consumer inflation for October equalled September’s annual rate at 6.9%. Gasoline and housing cost increases were offset by slowing increases for groceries (fruit, vegetables, and meat). Gasoline rose 9.2% in October after falling 7.4% in September. Overall, monthly price increases in October were 0.7%. Although Canada’s CPI did not fall, it also did not increase. ( Source )
The Organization for Economic Development and Cooperation (OECD) will soon release its inflation and growth analysis. Since their last projections in September the outlook has worsened. Inflation rose, notwithstanding some recent, minor successes, European economies have contracted, a resurgence of Covid with strong restrictions in China, and growing predictions of U.S. economic contraction next year. The predictions of inflation-fighting rate increases, their effectiveness and effect on GDP will guide markets into 2023 and beyond. ( Source1 , Source2 )

What’s ahead for this week?

In Canada, retail, wholesale, and manufacturing sales for September will be reported on Tuesday along with the new housing price index. The Federal budget balance will be released on Friday.
In the U.S., the mortgage market index, building permits, housing starts, and new home sales scheduled for release. Markets will close on Thursday and early on Friday for Thanksgiving.
Globally, Germany, the leading European economy, will announce its Gross Domestic Product, the European Central Bank will conduct a non-monetary policy meeting, and the Eurozone’s consumer confidence will be released. Japan, the third largest economy, will report its consumer inflation.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

7 Tips to Help Budget for the Holidays

2022-11-16T15:38:01Z

T'is The Season... For Budgeting

Holiday seasons are times where you get to share memorable moments with your loved ones. It is also an opportunity to take personal time off and relax. Whatever is the case for you and whoever you are sharing the holiday with, you need adequate budgeting to ensure you get lasting memories.

Budgeting helps you avoid impulsive spending, and you get to identify what you really want to do during the holidays that will give you the desired satisfaction. Here are some tips on how to budget for the holidays:

1. Set a Spending Limit

Putting a cap on your holiday expenses will give you a sense of control over the activities you have lined up. It ensures you pick destinations and activities within your budget and stops you from chasing expensive fantasies that will leave you high and dry after the holidays.

If you are going alone, you will need to check your savings and potential income before the holiday period and decide on how much you are willing to part with for fun. Ensure that it does not significantly affect your important financial obligations.

If you are going with your loved ones, it will be more fun to pool funds together which can widen the scope of activities and holiday destinations you can choose from.

2. Outline Your Holiday Destinations & Activities

This will be a follow-up to putting a cap on your holiday expenses. You will be able to pick a holiday destination that is within your budget and decide on the activities you want to enjoy.

It is important to be detailed when deciding on this so as not to encounter unexpected expenses which may stretch your budget thin and limit your fun activities.

You could make inquiries about where you want to go and how much activities like spa, bowling, shopping, and other fun activities cost to know what to expect and how to spread your budget across all these activities.

3. Start Your Travel Plans Early

The holiday season is always busy and there is a traffic of people making their reservations for the holidays.

It is advisable to start your planning early, so you won’t end up spending more than you should.

Book your accommodation and flight in advance to avoid the hike in prices during the holidays. It is advisable to make your holiday plans months ahead of time.

4. Be On the Lookout for Sales & Promos

There are usually several discounts, sales, promos, and coupons you can enjoy during the holidays.

The smart thing to do is to be on the lookout for these benefits to get good deals on gifts, accommodation, and trips.

These will create more room for more activities in your budget and allow you to enjoy your holiday to the fullest.

5. Make A List

It can be difficult to narrow down who you will be buying gifts for, but it is important to be honest with yourself about who you truly need to buy for.

Once the list of names has been created, take the time to write down what you would like to get them for a gift.

Once you have solidified your list, stick to it. This will help you avoid impulse buying and can also help keep you within your budget.

6. Get Creative

Thinking outside the box with your gifts can save you some serious cash.

Thoughtful homemade gifts can often be just as meaningful as store bought presents, if not more so.

Baked goods, photo albums, and other DIY projects are always well received and are a great option to help you stay within your budget.

7. Avoid Depending on Credit Cards

Finally, try to avoid spending on credit cards this holiday season. It is easy to spend more than you intended to and employ a “worry about it later” attitude.

If you must use a credit card because you are purchasing items online, or you are hoping to accumulate reward points, still use all the strategies above and be prepared to pay the card off as soon you make your purchase.

Planning is a very essential part of our day-to-day activities, and it also extends to having fun during the holidays. The key is to have a budget cap and outline what you want to do during the holidays.

You should also ensure that you stick to your budget no matter what. If you go outside your budget, you may end up spending more than you should during the holidays.

H ave Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - November 14, 2022

2022-11-14T17:26:56Z

Last Week in the Markets: November 7th – 11th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

U.S. consumer inflation was released midweek and generated a rebound from recent losses. Price increases were below expectations at 0.4% for October and 7.7% on a year-over-year basis. The monthly increase repeated September’s level while annual inflation fell to its lowest level since January, and 1½% below June’s recent peak.
The major contributors to inflation remain housing, food, and gasoline. Inflation exists across a broad array of goods and services, and the drop in the annual inflation in October has not significantly reduced the overall inflation rate relative to the long-run average target set by the Federal Reserve of 2%.
Caution should still be exercised with inflation still running very high and the jobs market still strong. With little ‘slack’ created in the jobs market it will be difficult for inflation to fall back toward target levels that will eliminate the need for monetary policy action.
Markets reacted with optimism when North American equity indexes posted their best trading day since 2020 by jumping 3½ to 7½% on Thursday.

( Source1 , Source2 , Source3 )

What’s ahead for this week?

In Canada, the week begins with a speech by Bank of Canada Governor, Tiff Mackle. The economic indicators scheduled include manufacturing and wholesale sales, housing starts and CPI for October.
In the U.S., it will be the Producer Price Index (PPI) and import and export price indices that are released to measure American inflation. Retail sales, capacity utilization, industrial and manufacturing production, business, gasoline, crude oil inventories, building permits, housing starts, and existing home sales will also be announced in a busy week for economic reporting.
Globally, the Eurozone will release its trade balance, industrial production, Q3 employment and Gross Domestic Product and CPI for the region as well as France and Italy, individually. China will announce retail sales, house prices, and industrial production. Japan will report its GDP, capacity utilization, industrial production, trade balance and consumer inflation.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - November 7, 2022

2022-11-07T20:21:09Z

Last Week in the Markets: October 31st – November 4th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

On Wednesday afternoon the Federal Reserve delivered its interest rate decision. Chair, Jerome Powell, announced a 75-basis point (¾%) rise to increase the monetary policy battle against inflation. ( Source1 , Source2 )
The first four days brought losses to North American equity indices, and Friday’s lift of 1% for each index prevented the week five days of losses. Friday’s reversal was initiated by employment news announced before markets opened.
In the U.S., 261,000 new jobs were created in October mostly in health care, services, and manufacturing. Labour force participation remained unchanged while the unemployment rate rose 0.2% to 3.7%. In Canada, employment rose by 108,000 in October, recouping job losses that occurred between May and September. The construction, manufacturing and accommodation and food services added jobs, while wholesale and retail trade lost jobs. Unemployment was unchanged at 5.2%.
The strong employment numbers on both sides of the border are worrying to central bankers, and continue to add certainty to more rate hikes, which is increasing fears of recession. Although, equities moved higher on Friday the overall direction was downward based on the reality and prediction of rate increases, and plentiful jobs. ( Source1 , Source2 , Source3 )

What’s ahead for this week?

In Canada, a week with no significant economic announcements concludes with Remembrance Day observances on Friday.
In the U.S., several Governors from the Federal Reserve will be delivering speeches that could provide additional insight to the recent interest rate increase. The Consumer Price Index (CPI) and Core CPI for October will be released. The U.S. federal government will announce the Budget Balance, and crude oil, gasoline, heating oil and natural gas inventories.
Globally, Germany’s industrial production and CPI for October, France’s imports, exports and trade balance, and the Eurozone’s retail sales for September will be announced. China’s trade balance, CPI and PPI are scheduled for release.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Electronic Monitoring of Employees

2022-11-01T14:07:21Z

As of October 11, 2022, employers with 25 or more employees are required to have a written policy on the electronic monitoring of employees.

The policy must establish whether the employer engages in electronic monitoring of employees, and if so, how.

The policy must also describe in which circumstances monitoring occurs, and for what purpose the information obtained through electronic monitoring may be used.

Employers are to provide the policy to staff within 30 days of starting in their position, within 30 days of policy in place, and within 30 days of any changes to the policy.

The policy, however, does not:

Establish a right for employees not to be electronically monitored by their employer, nor;
Create any new privacy rights for employees.

Sound intimidating?

Your HR professional can work with you to ensure you have everything you need to comply with the Employment Standards Act.

IAIC Market Update - October 31, 2022

2022-10-31T18:41:04Z

Last Week in the Markets: October 24th – 28th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The major and local economic news last week centred around the Bank of Canada’s interest rate announcement on Wednesday. The BoC increased the key lending rate by ½ percent (50 basis points), which now stands at 3.75%. It had been 0.25% until increases began on March 2, 2022.
A heavy influence for the Bank of Canada occurred one week ago, when Canadian consumer inflation numbers were released on October 19th. Most analysts had predicted a larger increase even as inflation, the primary target of increased interest rates, has moderated slightly over the past three months. For September, the monthly inflation rose 0.1% while the year-over-year rate fell by 0.1% to 6.9%, down from 8.1% in June. ( Source1 , Source2 )
On Friday StatsCan announced Gross Domestic Product (GDP) for August, which increased by 0.1% over July. Services industries recaptured some earlier momentum while the production of goods faltered. ( Source )
In addition to the Bank of Canada’s rate increase, the European Central Bank (ECB) raised its benchmark rate by 75 basis points (¾ percent). ( Source )

What’s ahead for this week?

In Canada, September’s imports, exports and trade balance and October’s employment report are the most important economic indicators scheduled for release.
In the U.S., the most significant news will occur on Wednesday afternoon when the Federal Reserve releases its latest monetary policy report and interest rate decision. October’s Non-farm payroll report will also carry significant influence over markets. Additionally, imports, exports and trade balance, and several Purchasing Managers Indexes will be released in a busy week for announcements
Globally, the rounds of important announcements continue with the Eurozone’s Consumer Price Index, Producer Price Index, and Gross Domestic Product scheduled.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

5 Steps to Financial Confidence

2022-10-31T13:48:27Z

"Being financially literate is a powerful thing"

– Otegha Uwagba, Author and Entrepreneur

Regardless of age, employment status, or marital status, one of the key objectives of the financial planning process is to help you gain the financial knowledge you need to take charge of your finances.

A Financial Plan helps break down the enormity of the planning process into smaller steps and objectives to ensure a clear financial roadmap is in place.

Remember, you don’t need to tackle it all at once; breaking down the process into individual tasks can help you better understand your finances.

Start at the Beginning: What do you value?

The answer to this question is different for each person.

However, once you reflect on what is important, your needs and priorities based on your unique situation – it will become easier to identify your financial goals and objectives.

Follow these five simple steps in the financial planning process to put yourself on the road to financial confidence:

1) Cash flow planning:

Starting with a budget, assessing your income vs expenses, and making this a part of your regular routine, allows the big decisions to become less overwhelming.

By taking this time for yourself, to create discipline around your spending and savings, will, in turn, better your future and the future of your loved ones.

Considerations: What are my current income sources and lifestyle needs? What will they look like in the future, or once I retire? Will I have enough saved to support my child’s education?

Click and use this budgeting tool as a helpful resource.

2) Net worth statement:

Looking at your assets and liabilities (what you own vs what you owe), provides a snapshot of your overall financial health.

Perhaps you are in the early stages of accumulating wealth or turning the next page to retirement. Regardless, seeing this big picture will help you plan for your future.

Considerations: What physical assets do I currently own? What are the values of my current investments? What liabilities do I currently have, and what are the associated payments and interest rates?

3) Investment Planning:

By reviewing your values, investment risk tolerance, and overall financial objectives, you can implement strategies to manage your assets.

Ensure you are working with your accountant and financial planner to ensure your investments are structured tax efficiently.

Considerations: What are the main objectives for my savings and investments? How much am I currently investing, and how do these vehicles and the investments they hold, align with my goals, time horizon and risk tolerance? Does my employer or spouse’/partner’s employer offer compensation benefits like group RRSPs, pensions, or insurance offerings? How can I take advantage of these benefits?

4) Insurance and Risk Management:

Create a clear picture of your assets and liabilities, income and expenses, and what your household situation looks like.

Then, implement insurance and risk management strategies with a professional to ensure you and your loved ones are protected if unexpected situations occur.

Considerations: What liabilities would need to be paid off if I pass away? If I become disabled or critically ill, how would this impact my family and me financially?

5) Estate Planning:

When you pass away, you leave many material things behind — “you can’t take it with you,” as the saying goes. This can include assets like real estate, cash, vehicles, jewelry, and other valuables — and things of sentimental value, too.

Most people want to make sure their earthly possessions are passed along to loved ones. But unless you clearly communicate your wishes in legally binding estate planning documents like a last will and testament, your plans may not be carried out as you wanted.

Estate Planning is one of the most important steps to get right as it ensures that what you have worked so hard to achieve remains with your loved ones.

Considerations: Do I have an updated Will and Power of Attorney, and what are my wishes for my estate? How will my business be impacted if I pass away?

“We have to develop a healthy, honest relationship with our money. And we have to see this relationship as a reflection of our relationship with ourselves.”

– Suze Orman, Women & Money: Owning the Power to Control Your Destiny

Having this open communication with yourself and your loved ones, and taking steps to work through each objective, will help you complete your financial plan. Then, with the help of a certified financial planning professional, when significant events or changes occur in your life, it will be simple to make updates to your financial plan, assess the impact, and ensure that you remain on the path to financial security.

Continuing your financial literacy education will make the process and these decisions easier, allowing you to better care for yourself and those you love, and will also help to equip them with financial knowledge and discipline.

Remind yourself that you are not alone in this. Surround yourself with a team of professionals who will take the time to understand your values, goals, and objectives. Allow them to help guide you in your financial wellness journey and provide you with the professional support, to ensure you achieve your goals.

H ave Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - October 24, 2022

2022-10-24T18:34:02Z

Last Week in the Markets: October 17th – 21st, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

North American equity indices had a strong week Monday to Thursday, and Friday was almost as good as the preceding four days when the indices jumped 1.5 to 2.5% on the final trading day of the week.
Although it was an exceptionally strong week for equities, not all the news was positive. Chrystia Freeland, the federal Finance Minister, warned that a domestic economic slowdown is expected in the coming months. She indicated that this is the natural consequence of the Bank of Canada’s interest rate increases enacted to attack inflation. ( Source )
Canadian consumer inflation was above expectations on a monthly and annual basis. Although inflation moderated slightly from 7.0% in August to 6.9% in September on a year-over-year basis prices increased in September by 0.4% on a seasonally adjusted basis. The decline in gasoline prices was largely responsible for moderating the monthly increase as price increases in other areas, like groceries, continued their trajectory. ( Source )
There is growing sentiment that the Federal Reserve and Bank of Canada are getting closer to the end of their rate-hiking cycle. The need to “front load” rate-increases, raising rates early to cause an effect sooner, is believed to reduce the overall negative effects by ending high inflation sooner. Another result as inflation begins to come under control is that future interest rate increases are reduced. Central banks continue to walk the fine line of slowing the economy to reduce inflation, while not dropping into a recession. ( Source )

What’s ahead for this week?

In Canada, the scheduled economic releases are few, but important for the coming week. Manufacturing sales will be released just prior to the Bank of Canada’s monetary policy report and interest rate announcement, which precedes Gross Domestic Product and the Budget Balance for August.
In the U.S., the house price index, mortgage market index, new home sales, goods trade balance, crude oil, heating oil and gasoline reserves, wholesale inventories, durable goods orders, consumer spending, Q3 GDP will be released along with the influential Core PCE price index.
Globally, the scheduled announcements include China’s house price index, Q3 GDP, industrial production, retail sales, trade balance, Japan’s CPI, Bank of Japan interest rate decision, employment report, and the European Central Bank’s interest rate decision on Thursday.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - October 17, 2022

2022-10-18T13:14:12Z

Last Week in the Markets: October 10th – 14th 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

U.S. consumer and producer inflation figures were released mid-week and immediately drove equity indexes downward. The fact that inflation increased, the size of the increase, and the continued high levels is compelling the Federal Reserve to act further with tighter monetary policy.
The U.S. Consumer Price Index (CPI) and the Producer Price Index (PPI) each rose 0.4% in September. Prices for consumers have risen 8.2% over the past year. Although, gasoline prices fell in last month, the cost of food, natural gas, electricity rose. Core CPI that does not include volatile food and energy prices increased by 0.6% in September and sits at 6.6%. PPI, which measures inflation at the wholesale level, has risen 8.5% on a year-over-year basis. ( Source1 , Source2 )
Central bank “tightening” by raising interest rates and reducing bond holdings will slow the economy, and threaten corporate earnings and, therefore, erode share prices. These effects are further exacerbated by lingering supply chain issues and Russia’s continued aggression in Ukraine.
The Fed’s quantitative tightening started in January, the war in Ukraine began in February and interest rate increases started in March by the Federal Reserve and Bank of Canada. These events triggered the first dips in North American equity indexes.
The confirmation of continued high and increasing inflation has made another ¾% (75 basis points) increase by the Federal Reserve on November 2nd a near certainty. The negative effect on equities caused by higher interest rates should not be a surprise at this point. The reaction of an existing portfolio to the heightened rates and the further reaction to additional increases should be reviewed in the context of each investor’s unique situation. ( Source )

What’s ahead for this week?

In Canada, after last week’s release of U.S. inflation indicators, the Canadian Consumer Price Index will be announced. Building permits, housing starts, and retail sales are scheduled. Also, the Bank of Canada will release its quarterly Business Outlook Survey.
In the U.S., September’s capacity utilization, industrial production, manufacturing, building permits, housing starts, and existing home sales will be announced.
Globally, in another round of what has been bad news for investors the Eurozone will release its CPI for September. China will announce its retail sales imports, exports, trade balance, and house prices along with its Q3 Gross Domestic Product. Japan, the world’s third largest economy, will also release its CPI.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

3 Misconceptions About Estate Planning

2022-10-13T12:11:17Z

Having a proper estate plan in place will ensure that your loved ones are protected if you were to pass away. As soon as you have any assets or property it is time to contact your team of professionals to discuss what would happen to those assets if you were not here anymore. Neglecting to do so can end up costing your estate or loved ones in the form of probate costs and potential legal battles. Unfortunately, many people think that they can skip the estate planning process and that it doesn’t apply to them. Below are three of the most common misconceptions about estate planning.

1. Estate Planning is for Older People

While it is true that older people are more likely to be in need of a solid estate plan due to wealth accumulation and age, there is no right age to start the process.

The reality is that it is not uncommon for people to die too early and it is a disservice to your family to not acknowledge this fact.

A good rule of thumb is to put an estate plan in place as soon as you have someone who depends on you. Marriage and having children are two major life events that might come to mind.

2. Estate Planning is Only for the Wealthy

Estate planning is important no matter what the value of your assets are.

In fact, the less that you have the more strain your family may feel when you are no longer around.

Estate planning can include distributing your assets but it also involves leaving an income for your family in the form of insurance planning.

Having a plan in place will give you the peace of mind that your family will be cared for financially.

3. A Will is All You Need

While a will is a good foundation, a good estate plan should include so much more.

Wills, power of attorney, health care directives, insurance, business succession planning, tax planning, trusts… the list goes on!

A will outlines where your assets will go, but it doesn’t necessarily specify how they are going to get there.

Transferring assets smoothly takes extensive planning, but your heirs will thank you for it after you are gone.

The best time to start considering an estate plan is right now. You should be prepared for the unexpected no matter your age or the value of your assets. Talk to your advisor about different strategies you can use with your investments and insurance to ensure that your assets are as organized as possible and can pass smoothly to your family.

H ave Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - October 11, 2022

2022-10-11T15:10:22Z

Last Week in the Markets: October 3rd – 7th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The announcement on Friday of strong U.S. jobs numbers continued to fuel expectations that the Federal Reserve Bank will maintain their current course of rate increases to slow inflation.
Total nonfarm payroll employment increased by 263,000 in September and the unemployment rate edged down to 3.5%. ( Source )
The number of new jobs announced was below the number created in the last few months, but still relatively strong, especially as the headwind of increasing interest rates builds strength.
Wages are 5% higher than one year ago as gains continued in hospitality, healthcare, services, and manufacturing. ( Source )
Also, on Friday Canadian employment figures for the same period were released. Although employment was only up slightly with 21,000 new jobs the unemployment rate fell 0.2% to 5.2% as labour force participation fell (fewer people searched for work). Employment in the public sector, education, and healthcare services rose as manufacturing, transportation and recreation fell. Average hourly wages have risen 5.2% over the past year, which helps offset some inflation impacts. ( Source1 , Source2 )
The effects on markets had been building all week. Monday and Tuesday brought gains for North American equity indices, which were reversed as the jobs announcements approached. The prevailing opinion is that another large interest rate increase will be enacted by the Federal Reserve at their next meeting scheduled for the beginning of November. Higher interest rates and the resultant slowing economy are expected to lower corporate profits and have reduced stock prices across the indexes. ( Source )

What’s ahead for this week?

In Canada, after Thanksgiving on Monday a light week for economic announcements follows with manufacturing sales, motor vehicle and wholesales sales to be released.
In the U.S., inflation will be in the news again with Consumer Price Index (CPI) and the Producer Price Index scheduled. The meeting minutes from the most recent Federal Open Market Committee meeting at the Federal Reserve will be released. The Import and Export Price Indexes will also be announced.
Globally, the release of German and French CPI will continue the inflation parade of announcements. China will announce its imports, exports, and trade balance along with its consumer and producer inflation for September.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - October 3, 2022

2022-10-03T18:45:46Z

Last Week in the Markets: September 26th – 30th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Several important announcements were made Friday.
Canadian Gross Domestic Product rose 0.1% in August, matching the gain in July. This small increase countered the analyst consensus that the economy would shrink. Oil sands production, agriculture, forestry, fishing, and hunting led the growth, while manufacturing and wholesale trade shrank. Despite these setbacks Canadian economic growth remains strong relative to other countries. ( Source1 , Source2 )
US GDP for the second quarter is responding to interest rate increases, among other factors, as it fell 0.6% after falling 1.6% in the first quarter. ( Source )
Eurozone inflation beat expectations and has now risen to 10% in September and was the eleventh consecutive month that regional inflation set a record high. The European Central Bank intends to raise rates until inflation is controlled and approaching the 2% target.
The Personal Consumption Expenditures Index (PCE), which is the inflation indicator used by the Federal Reserve rose again in August. Overall, the PCE increased 0.3%, and excluding food and energy the core PCE rose 0.6% to 4.9%, which is well above the target of 2%. ( Source1 , Source2 )
With inflation well beyond target, and economic growth steady or declining slightly, equity markets are anticipating additional monetary moves by the Fed and Bank of Canada. The major U.S. equity indices are all in " bear " territory now that the Dow has also lost more than 20% so far this year. ( Source )

What’s ahead for this week?

In Canada, the trade balance for August, including Imports and Exports, will be announced, and will be heavily influenced by the elevated price of commodities over the summer months. On Friday, September’s employment report highlighting job creation and the unemployment rate will be released.
In the U.S., a wide array of economic indicators, including construction spending, durable goods orders, factory orders, trade balance PMIs (Purchasing Managers Index) are scheduled. The most significant news arrives on Friday morning with the release of the Non-Farm Payroll report.
Globally, the two most important measures from the Eurozone will be the Producer Price Index and retail sales. China will celebrate the formation of the People’s Republic of China with their weeklong National Day observance, which is referred to as Golden Week.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Crisis-Proofing Your Business

2022-10-03T13:27:13Z

The events over the past two and a half years have taught us many lessons in life and business. Whether preparing to expect the unexpected, adapting to rapidly changing laws and regulations, or feeling a direct impact on sales and profitability, these events caught many by surprise.

While no one could have fully prepared for the pandemic’s extent and impact, those who had planned for some form of disruption undoubtedly fared better than those without such planning. Every business, including yours, is unique and should have a plan in the event of a disaster or other business interruptions. This plan should include things like information technology requirements, human resources issues, client relationships, cash flow management, business continuity/succession planning, contingency planning, and more.

Developing a plan to mitigate these potential risks in the event of unforeseen circumstances should be considered by all business owners specific to the needs of their business. Still, there are a few common risks that all company owners face. For example, even successful business owners don’t always have fail-safes in place to protect their business if a key stakeholder dies, becomes disabled, or retires. Without adequate planning, many businesses do not survive these events.

Let’s look at two businesses to see how their situation impacted them.

Business 1: SARA’S VETERINARY CLINIC

Sara is a veterinary school graduate and has worked at a veterinary clinic for the past few years. The owner, who was retiring, offered Sara the opportunity to purchase the practice. Sara took the plunge, and the dream of owning her practice was now a reality. Sara was excited but also worried since she had never been in this much debt. After all, she still owed her parents for student debt and was now responsible for a substantial business loan. With new responsibilities as a business owner, she didn’t have much time to think about the financial burden.

Soon after, Sara began having health issues and was eventually diagnosed with Multiple Sclerosis. She was devastated by the news but determined to work through it. Over time, Sara’s health suffered, as did her practice. Key employees quit due to uncertainty, some clients left, and as a result, revenues fell.

Unfortunately, by the time Sara realized the stress of running her business was too much, the damage had already been done. With no contingency plan in place and only limited income available through her association plan, Sara had to sell her practice for less than she paid. As a result, she had to deal with a serious illness, significant debt to the bank and her parents, and little means to pay it off. These events shattered her dreams.

How her story could have been different

Suppose Sara had a contingency plan to replace her income and cover her business expenses; she could have taken time off work to deal with her illness and looked for a purchaser while her business was still healthy, stable, and profitable.

Things Sara should have thought about

What happens if I, or a key employee become disabled or seriously injured and can no longer work?
What happens if a key employee or I pass away?

Key takeaways from this story

Consult with your dedicated professionals about implementing a disability and life insurance strategy (buy-sell agreements, key employees).
Business owners have several insurance strategies to help financially protect the business should a key employee, or themselves, suffer a severe injury, illness, or pass away.

Things Daniel’s father and Uncle should have thought about

Who will be responsible for taking over if one of us suddenly becomes ill or dies?
What happens to the shares of the business?

Key takeaways from this story

Consult with your dedicated professionals about estate planning for business continuity, including Shareholders’ (buy-sell) Agreements, Wills, and Powers of Attorney.
Help maintain family harmony and increase the chances of a successful succession to the next generation by guiding ownership, decision-making, conflict resolution, and, importantly, the distribution of money within the family.

Business 2: DANIEL’S FAMILY CONSTRUCTION BUSINESS

Daniel joined the successful family construction business with his dad and uncle John. Daniel worked hard, anticipating that one day he would take over his dad’s share of the business when he was ready to retire.

Suddenly, John died from a heart attack. With no shareholder agreement in place and no buy/sell agreement, his uncle’s share of the business passed to Daniel’s aunt, with whom Daniel had a great relationship. Although a kind and generous woman, Daniel’s aunt had little business experience but wanted to honour her husband’s legacy and give her teenage children the opportunity to take over their dad’s share of the business when they got older.

While Daniel and his father had focused on the construction side of the business, his uncle had been responsible for sales, which began dwindling immediately after his passing. They tried to hire salespeople but couldn’t find someone with the same experience, knowledge, and commitment. Sales continued to lag while the business declined until the doors were closed a few years later. The family was splintered, each blaming the other for the failure.

How their story could have been different

Alternatively, if Daniel’s father and uncle had a funded shareholders’ agreement or a funded buy/sell agreement, Daniel’s aunt would have been compelled to sell her husband’s share of the business to Daniel’s father, who would have had to purchase the shares for the agreed value. As a result, with a succession plan, the construction business and the two families would have had the opportunity to survive and thrive after this devasting event.

So what’s the lesson here?

Don’t leave the survival of your business to chance. Instead, work with dedicated professionals, such as your accountant, lawyer, and certified financial planner, to be sure that you’ll have the fail-safes in place to protect your financial future and the ongoing success of your business if disaster strikes.

H ave Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - September 26, 2022

2022-09-26T20:44:39Z

Last Week in the Markets: September 19th – 23rd, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Canadian consumer inflation for August led domestic news briefly. The Consumer Price Index (CPI) fell 0.3% in August and sits at 7.0% on a year-over-year basis. This is the second consecutive month when the annualized rate and month-to-month inflation has fallen.
According to the StatsCan Release, much of the monthly decline can be attributed to the dropping price for gasoline, which lowered by 9.6% in August, but is still 22% higher than August 2021. Another contributor to slowing inflation was the cost of shelter, which has had its year-over-year rate drop from 9.7% in July to 7.4% in August. Food purchased in stores has risen 10.8% over the past year. ( Source )
On Wednesday the financial world was tightly focused on the U.S. Federal Reserve’s monetary policy announcement. For the fifth consecutive meeting, dating back to March 17th, the U.S. Federal Reserve has increased short-term interest rates. Following previous increases, the Federal Open Market Committee (FOMC) approved a third increase of ¾% (75 basis points) in a row. ( Source )
The Fed will “take into account a wide range of information, including readings on public health, labour market conditions, inflation pressures and inflation expectations, and financial and international developments” as it contemplates future monetary policy actions. Although the 75-basis point increase was widely expected, the commentary that accompanied the rate hike, that the Fed was committing to slowing inflation, and not as concerned about negative effects on jobs and economic output, contributed to much of the post-announcement losses. ( Source )

What’s ahead for this week?

In Canada, the most significant economic news scheduled is the release of July’s Gross Domestic Product (GDP) data. The federal government will also announce its Budget Balance for the same month.
In the U.S., durable goods orders, new home sales and pending home sales for August will be released. More importantly, Q2 GDP and Personal Consumption and Expenditures Index will also be released.
Globally, China will reveal its business confidence through several Purchasing Managers’ Indexes, including the especially important manufacturing sector. The Eurozone will release September’s Consumer Price Index and August’s unemployment rate.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - September 19, 2022

2022-09-19T19:45:56Z

Last Week in the Markets: September 12th – 16th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Inflation news dominated markets. After holding steady in July, the U.S. Consumer Price Index (CPI) rose 0.1% in August and 8.3% over the last 12 months according to the Bureau of Labor Statistics . For comparison, the Canadian CPI for the last reported period of July from StatsCan rose 7.6% year-over-year. Canadian consumer inflation data for August will be released during the coming week to allow a more compelling comparison between the two neighbouring countries.
The widely held belief that U.S. consumer inflation peaked has been shown as inaccurate. Markets had expected inflation to have levelled off, or even declined. Since Monday’s closing, the major North American indexes have fallen an additional 1 to 2% more than their performance for the week. These most recent losses have erased the gains made since September 6th.

What’s ahead for this week?

In Canada, consumer inflation for August will be announced on Tuesday morning. The new housing price index, retail and wholesale sales will be released by the end of the week.
In the U.S., the National Association of Home Builders will release their market index, and building permits, housing starts, and existing home sales will also be announced. The Federal Reserve will issue its economic projects and a statement on Wednesday along with its interest rate announcement.
Globally, Japan’s consumer inflation is scheduled for release. Also, the European Central Bank will conduct a non-monetary policy meeting as the region’s consumer confidence, purchasing managers indexes for both goods and services is announced.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - September 12, 2022

2022-09-12T19:07:05Z

Last Week in the Markets: September 6th – 9th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Equities rebounded this past week. The predictions for inflation, economic growth, employment, and monetary policy responses will continue, and the effect on markets from all these factors will most likely continue.
The Bank of Canada increased its policy interest rate, the overnight rate, by ¾% (75 basis points) on September 7th, one day before the European Central Bank (ECB) delivered an identically sized increase. “The Canadian economy continues to operate in excess demand and labour markets remain tight” according to the Bank of Canada’s press release . In both geographies, interest rate increases are intended to temper inflation by reducing demand. ( Source )
On Friday morning, StatsCan released the latest employment data. In August, the Canadian economy lost 40,000 jobs, the fourth consecutive month with declining employment levels. The unemployment rate increased 0.5% to 5.4% in August up from the record lows of June and July. Despite the recent downturn for employment, the number of employees exceeds pre-pandemic levels. ( Source )

What’s ahead for this week?

In Canada, manufacturing and wholesale sales, and housing starts are scheduled to be announced.
In the U.S., Tuesday will bring the consumer and producer inflation numbers and import and export price indexes, which may foreshadow the Federal Reserve’s next monetary policy move.
The heavily influential Federal Reserve will release new monetary policy on September 21st.
Globally, industrial production, wages, trade balance and consumer inflation (particularly Germany, France, and Italy) for the Eurozone will be released. China’s retail sales for August will be announced.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - September 6, 2022

2022-09-06T17:39:44Z

Last Week in the Markets: August 29th – September 2nd, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The reality of the inflation environment and central bank positioning continued to control equity markets last week. When Federal Reserve Chair, Jerome Powell, stated his resolve to tame inflation in his August 26th speech at the Jackson Hole Symposium , markets took notice, and continue to do so. He stated that the negative effects of long-term inflation, the accompanying instability, and the inclusion of inflationary considerations into economic decision-making by individuals and firms, will deliver far more damage than measured monetary policy. His stance to stop inflation with his central bank’s actions is firm.
The Bank of Canada, European Central Bank and Federal Reserve will announce interest rate decisions within the next three weeks (September 7, 8 and 21, respectively), and equity markets seem to have taken Powell at his word. North American indexes have reacted with an uptick in volatility and sizeable overall losses. Last week was the second consecutive week that American stocks lost 4%, while the TSX has dropped less at 1 and 3 % for the last two weeks.
The U.S. labour market continued its strong performance as 315,000 jobs were added in August. The unemployment rate rose 0.2% to 3.7%, which is still below February 2020 levels. The rise in the unemployment rate was partially driven by an increase in the Labour Force Participation Rate. ( Source )
Canada’s economic health represented by Gross Domestic Product (GDP) rose 0.1% in July, 0.8% during the second quarter and at an annual rate of 3.3%. This was the fourth consecutive quarter of increasing domestic economic output as the pandemic recovery continues. ( Source )
The robust U.S. jobs market and the health of the Canadian economy support the tightening of monetary policy that Powell stated and has reiterated, which has resulted in losses for equity investors. ( Source )

What’s ahead for this week?

In Canada, following Labour Day on Monday, the economic news shift into high gear with the Bank of Canada announcing its interest rate decision at 10 am Eastern on Wednesday. Employment numbers for August will also be released.
In the U.S., Purchasing Managers Indexes from ISM for services, manufacturing and non-manufacturing industries, July’s imports, exports, and trade balance are scheduled for release after Labor Day.
Globally, the European Central Bank will announce its latest interest rate decision on Thursday, one day after second quarter employment and GDP data for the Eurozone is released. China’s consumer and producer inflation, and imports, exports and trade balance for August is scheduled.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Long Term Care Insurance, Explained

2022-08-31T13:41:07Z

Executive Summary

Our population is getting older, and the life expectancy in this country continues to grow. Today, 65-year-old Canadians live on average to age 87 (men) and 89 (women). As people age, their health care needs continue to rise.

Long Term Care Insurance assists with the costs of aging. Like Disability Insurance which pays a regular cash benefit to replace income, it covers the costs associated with diminished health.

You should consider Long Term Care Insurance if you are concerned with:

government healthcare benefits not providing the type of care you desire
wanting increased flexibility to decide the level of care you receive
increased healthcare costs that could erode your savings

What You Need To Know

Most Canadians would prefer to stay in their homes for as long as possible as they age, even as their health deteriorates. However, their ability to perform Activities of Daily Living (ADLs) lessens, placing pressure on able-bodied spouses, adult children, and other family members.

ADLs include activities necessary for self-care:

personal hygiene – bathing and grooming
dressing – for both indoors and outdoors
eating – consuming food and drink, not preparing or cooking
transferring – moving, sitting, standing, in/out of bed
locomotion – walking on flat-ground or gentle slopes and up/down stairs
toileting – bowel and bladder control

The cost of in-home care or assisted living facilities to counteract the loss of ADL function can be substantial and can persist for a significant amount of time. As the impairment of ADL function increases, so does the need for more care, and moving to a long term care facility may be considered.

Long Term Care Insurance typically pays a monthly cash benefit if two or more ADL functions are severely diminished. Veteran Affairs Canada has an excellent explanation of the Impairment of Activities of Daily Living;

Link to Veteran Affairs Canada here.

The Bottom Line

Like all insurance plans, Long Term Care Insurance requires an application. Additional questions and a health interview may apply based on your application, age, or existing physical capabilities.

Let us guide you through the entire application process.

H ave Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - August 29, 2022

2022-08-30T16:05:54Z

Last Week in the Markets: August 22nd – 26th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

After a short rally on Wednesday and Thursday, equity markets stumbled on Friday. At 10 am Eastern, Jerome Powell, Chair of the U.S. Federal Reserve Bank delivered brief remarks at the annual Jackson Hole Symposium. He believes that the benchmark “federal funds” rate has reached its long-run neutral level, and further rate increases will be required to return consumer inflation to the Fed’s long-term target of 2%. In a shorter, more narrowly focused, and direct message, he stated that three lessons from previous periods apply to the current situation:

1. Central banks can and should take responsibility for low and stable inflation. Although, the Fed’s actions only address the demand-side of the supply/demand imbalance that is driving current inflation, their responsibility is not reduced.

2. The public’s expectations about future inflation can play a key role in setting the path of inflation over time. The anticipation of high inflation can become entrenched in decision making for businesses and households, because “inflation feeds, in part, on itself”.

3. The Federal Reserve “must keep at it until the job is done”. The Fed must act with resolve now by taking forceful and rapid steps to moderate demand, align it with supply, and lower expectations of high inflation.

Powell’s full remarks can be found here .

The remarks, which indicated that interest rates will go higher and remain high until inflation is tamed, caused equity markets to drop. The S&P 500 tumbled 3.4%, the Dow fell 3%, the NASDAQ lost 3.9%, while the TSX dripped 1.5% on Friday following Powell’s speech. ( Source )

What’s ahead for this week?

In Canada, Gross Domestic Product for June and for the second quarter will be released with July’s building permits, manufacturing Purchasing Managers Index (PMI) and labour productivity.
In the U.S., following the Fed’s Jackson Hole meeting several members of the FOMC (Brainard, Barkin, Bostic, Williams) will deliver speeches this week. The JOLTs job opening, housing price index, mortgage marketing and mortgage refinance indexes, PMIs, factory orders and August non-farm payroll numbers will be released.
Globally, Eurozone business climate, consumer confidence and consumer inflation expectation will be announced along with their consumer inflation figures. Also, Japan’s unemployment, industrial production, retail sales, housing starts, and construction orders will be released along with China’s industrial profit, manufacturing, and non-manufacturing PMIs.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - August 22, 2022

2022-08-22T19:03:45Z

Last Week in the Markets: August 15th – 19th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Canadian consumer inflation data was released last week, and it continued the trend of tempering which is also occurring in the U.S. Falling gasoline prices offset rising food costs to drop July’s year-over-year inflation rate to 7.6%, down from 8.1% in June. For the seventh consecutive month, price rose on a month-to-month basis, but only slightly at 0.1% over the course of July. Gasoline prices dropped 9.2% in July while groceries (food bought at stores) rose by 9.4%. Even after removing the two most volatile categories, food and energy, consumer inflation is still running at 5.5%, which much higher than the Bank of Canada’s 2% target. ( Source )
The pressure on the Bank of Canada to rapidly raise interest rates is easing, but it has not abated as inflation is well above the 2% target.
Rising interest rates resulting from monetary policy actions already undertaken by the Bank of Canada and the Federal Reserve have contributed to a slowdown in the U.S. housing market. In July, residential building permits fell by 1.3% overall and 4.3% for single family homes. Housing starts dropped 9.6% in July and have fallen by 8.1% compared to July 2021. Similar effects are expected to occur across Canada when comprehensive housing data is released here. ( Source )
The higher interest rates, which will increase further despite slowing inflation, are expected to negatively affect corporate earnings. The highly resilient corporate profits are predicted to fall as the second half of 2022 is reported. The equity markets reflected that sentiment last week. ( Source )

What’s ahead for this week?

In Canada, after several busy weeks for economic announcements, a light week is planned with the new housing price index, wholesale sales and the federal government’s budget balance scheduled.
In the U.S., Purchasing Managers Indexes from PMI will be announced and accompany pending home sales, new home sales, durable goods orders, personal income and spending, and Gross Domestic Product for the second quarter. The Federal Reserve will hold its annual Jackson Hole Symposium.
Globally, Japan’s Consumer Price Index and China’s industrial profit will be released. The European Central Bank will publish their monetary policy meeting minutes. Consumer confidence numbers will be announced by Italy, France, and Germany.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

6 Recession Tips

2022-08-22T13:30:07Z

The Headlines

Depending on who you ask and the definition they use, a recession has occurred or is about to occur. The traditional definition is two consecutive quarters of economic decline measured in Gross Domestic Product . A more complex definition is a slowing of economic activity and an increasing unemployment rate.

Financial and lifestyle preparations for a recession should be undertaken now to lessen the effects should it occur. And if it does not, then you will be even better prepared for any economic shock that could unexpectedly occur.

What You Need To Do

In preparation for the arrival of a recession:

1.Examine your monthly budget

You cannot save money that you have already spent. Almost everyone has regular, recurring expenses that are not necessities. Subscriptions to multiple streaming services are one example. Find lower cost alternatives like a home, family movie night using a streaming service versus a $100 trip for four to the local cinema. Delaying many small and large purchases can free your budget and your mind from stress.

2. Contribute to your Emergency Fund

Once you have identified unneeded expenditures in your regular spending, remove them from temptation by placing them into your Emergency Fund. Having 3 to 6 months of income set aside is the recommendation and is almost impossible to achieve until a thorough examination of your budget occurs. Consider utilizing a TSFA, if you have contribution room to spare. A Tax-Free Savings Account (TFSA) containing liquid and low-risk investments provides tax exempt earnings and withdrawals.

3. Maintain your scheduled savings contributions

Whether a recession occurs or not, continue adding to your retirement savings in RRSPs and TFSAs, ad education savings in RESPs. Skipping a few monthly contributions and the compounding of interest on them could free up a few thousand dollars but cost you tens of thousands of dollars at retirement. The 20% grant (up to $500 annually) on RESP contributions and the $2,000 contribution to generate the maximum grant could grow into a year of tuition. Treat savings like one of your bills that you pay first. Your mortgage, insurance, and utilities must be paid. Paying your savings first helps reinforce your budgeting efforts.

What You Need To Do

In preparation for the arrival of a recession:

4. Reassess your investments

During a recession, like any other period, some types of investments can withstand the challenges better than others. Should a recession occur, each family will be affected uniquely and their situation could affect the suitability of some investments. A frank conversation with your financial professional is an excellent step to preserve assets and investment income.

5. Eliminate, reduce, and avoid debt

Paying high interest rates is never a great idea, so it is best to pay them down as quickly as possible. Interest rates are rising on the actions of central banks around the world, and those high interest rates are likely to rise even higher. Taking on new debt that will increase your monthly expenditures for both capital repayment and interest charges is not advisable.

6. Update your skills and resume

Should your employment be affected personally, it would be better to be prepared than react when feeling the pressure of replacing your existing income. Revisit and update your resume with accurate dates and roles. List your newly acquired skills and capabilities, and if applicable, don’t forget your online profile/s. You can also consider investing in yourself by taking internal and external courses to bolster your skillset.

The Bottom Line

Whether a recession arrives in Canada should not determine if you prepare, or not. It has arrived in the U.S. using the “two quarters of economic decline” definition.

None of the six steps above, require a recession or even the threat of recession to become valuable. Each of them is prudent regardless of the overall economic and employment climate, so get ready for a rainy day, and you will be able to enjoy the sunshine, too.

H ave Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - August 15, 2022

2022-08-15T19:09:57Z

Last Week in the Markets: August 8th – 12th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Markets reacted swiftly to the better-than-expected and declining U.S. consumer and producer inflation news released last week. The year-over-year rates of inflation represented by the Consumer Price Index (CPI) and Producer Price Index (PPI) fell slightly. Inflation was expected to have risen last month. Prices for consumers were unchanged in July compared to June and the year-over-year inflation rate dropped from 9.1% to 8.5%. Prices for producers rose 9.8% in July on an annualized basis, which is below the reading in June of 11.3%. The response from equities was overwhelmingly positive
Even at this lowered level, inflation remains historically high and well beyond the Bank of Canada and Federal Reserve’s 2% target level and 1 to 3% range. The Fed is expected to continue to raise interest rates, but the lessening of inflation suggests that interest rates may not be raised as quickly or as high.
The market has priced-in a 50-basis point (0.50%) increase by the Federal Reserve to its federal funds rate at its next monetary policy meeting on September 21st. The Bank of Canada will provide its next interest rate and monetary policy update on September 7th.
Policy rates are expected to rise to about 3½ or 3¾% before pausing in 2023, allowing time for the interest rates to affect the economy. The Federal Reserve is also ending its bond-purchasing program, which had provided additional liquidity to capital markets. This " quantitative tightening " will also work to slow the growth of the economy and in-turn inflation.
Corporate returns are expected to follow the path of the economy and inflation and have profits pressured downward by the economic slowdown.

Source - https://www.reuters.com/markets/us/us-consumer-price-growth-expected-slow-due-lower-gasoline-costs-2022-08-10/

What’s ahead for this week?

In Canada, manufacturing, wholesale, and retail sales will be announced tomorrow. July’s consumer inflation will be released on August 16th.
In the U.S., building permits, housing starts, existing home sales, industrial production, capacity utilization, manufacturing production, business inventories and retail sales will be released, and form a wide representation of economic health.
Globally, Japan’s Gross Domestic Product (GDP), capacity utilization, industrial production, machine orders and consumer inflation will be announced. China’s house prices, industrial production, retail sales and unemployment figures are scheduled for release. The Eurozone’s GDP and consumer inflation, two very important economic indicators will be announced this week.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - August 8, 2022

2022-08-08T15:04:31Z

Last Week in the Markets: August 1st – 5th, , 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The news last week centred around jobs reports and quarterly earnings for the S&P 500, and their implications for upcoming monetary policy balanced against current corporate performance.
“Employment in Canada was little changed (-31,000) in July, and the unemployment rate was unchanged at 4.9%” according to July's Labour Force Survey released by StatsCan. The services sector lost jobs, while the goods producing sector added employment. The unemployment rate maintained its record low, and long-term unemployment fell 23,000 as average hourly wages rose 5.2% on a year-over-year basis. ( Source )
In the U.S., “total non-farm payroll employment rose by 528,000 in July, and the unemployment rate edged down to 3.5 percent” the Bureau of Labor Statistics reported in their Employment Situation Summary. Long-term unemployment is below February 2020 levels, and temporarily laid-off workers have returned to pre-pandemic levels at 791,000. The American economy has now regained the 22 million jobs that were lost in early 2020 when the pandemic was beginning. ( Source )
Additionally, second quarter earnings of the S&P 500 companies that have reported so far show profits are up nearly 7% over last year. ( Source )
The robust U.S. jobs market and strong earnings show that central bank actions have not taken effect yet. The continued strength in U.S. jobs and the indication that employment is growing rapidly could spur the Federal Reserve to continue to act aggressively at its next monetary policy meeting in September.
Consequently, markets were mixed with strong performance providing some positive influence while the threat of tightening monetary policy delivers a negative tone. This positive/negative teeter-totter will likely continue for the next few months.

What’s ahead for this week?

In Canada, the next major economic announcement will occur on August 16th with the release of July’s consumer inflation. The next scheduled opportunity for the Bank of Canada to adjust monetary policy in response to inflation is September 7th.
In the U.S., another week of important economic news follows as the latest Consumer Price Index (CPI) with month-to-month and year-to-year inflation numbers being released on Wednesday. The Producer Price Index (PPI) and Import and Export price indices will also be released.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Saving a Raise or a Bonus

2022-08-05T14:58:57Z

Did You Get a Raise or Bonus? Save it!

Receiving a raise or a bonus is a great accomplishment that lends a feeling of accomplishment and celebration. Many of us opt to use the bonus to buy something we’ve been wanting, like that flat screen television, for example. Rather than splurge, however, why not hold onto that bonus or raise and invest in wisely?

Saving a Raise

If you are not already on a pre-authorized contribution (PAC) to a savings or registered account, now is a great time to do so. Each pay, or each month, have a predetermined amount removed from your bank account and placed into savings. Once the funds are in a savings account (and removed from quick and easy debit card access), they can be used for several purposes:

Pay down debt:

Especially high-interest consumer debt like credit cards
Pay off your mortgage sooner: Save money for the future by increasing the mortgage payments above the minimum amount or increasing the payment frequency (bi-weekly instead of monthly)

Maximize the use of a “Registered” account:

Place the pay increase directly into a registered account like an RRSP to increase savings
The pay increase could also be placed directly in a TFSA, which gives you the flexibility to pull those funds later if required.

In most cases a blended approach is best. Paying down debt alone doesn’t afford you the opportunity to amass a small, liquid, emergency nest-egg to cover unexpected expenses.

It is also worth nothing that in the current climate, some raises may not be in excess of inflation. The raise and may be required to keep up with the higher cost of living, rather than putting the increase away for future use.

Saving a Bonus

Unlike a raise that should affect all future earning and raises that follow, the one-time bump on a bonus can disappear as mysteriously as it arrived. Rather than spend your bonus on a one-time, self-gratification, why not use it to strengthen your financial future?

Pay down debt:

As explained above, the pre-tax earnings required to pay post-tax debt can be significant. A large, one-time bonus can significantly affect the short and long-term savings of your family.

Paying off a large portion of your mortgage: a reduced balance causes each subsequent mortgage payment to have a larger portion dedicated to reducing the principal

Maximize the use of “Registered” accounts:

Place the bonus (or part thereof) directly into a registered account like an RRSP to increase savings
The pay increase could also be placed directly in a TFSA, which gives you the flexibility to pull those funds later if required.

Often you may feel that as if your raise or bonus didn’t actually happen. You earn more, but don’t enjoy any of the benefits. A small celebration allows you to acknowledge and move forward. The celebration could take many forms, but it is best if it is unusual and distinctive.

Bottom Line

Getting a raise or bonus is an impressive accomplishment. Often, you may feel like you didn’t even get a raise which is why it is important to commemorate your accomplishment with a small celebration. Take some of that money and treat your family to dinner, go to the spa or celebrate however you see fit. Then, contact your Advisor for assistance to determine how to best utilize the extra funds.

H ave Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - August 2, 2022

2022-08-02T15:06:22Z

Last Week in the Markets: July 25th – 29th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The end of July provided positive results for all the indicators in the grid. Year-to-date the equity indexes still have losses, but they have been roughly halved lately. Several factors are working together to deliver these positive results:
After raising benchmark interest rates by ¾ percent (75 basis points) July 27, 2022 the Federal Reserve indicated that interest rates would rise more gradually with smaller future rate hikes. ( Source )
The economy in both Canada and the U.S. is slowing, which permits the slowing of interest rate increases as the slowdown reduces inflationary pressure.
Canadian Gross Domestic Product (GDP) remained unchanged in May as transportation, agriculture, accommodation, and food services expanded while manufacturing, construction, and mining contracted. ( Source )
Quarterly earnings reports from S&P 500 firms have been reduced, and several have missed predictions, most firms have exceeded lower expectations. More than 50% of S&P 500 firms have reported and nearly three-quarters of them have beaten estimates. Current earnings do not yet reflect increased interest rates.
In both countries equity markets performed well on less than stellar news exemplifying the relativity between results and expectations, not results alone. It appears that last week’s news was better than expected and resulted in positive returns for most investors.

What’s ahead for this week?

In Canada, markets were closed for the Civic Holiday on Monday August 1, 2022. Imports, exports, and trade balance will precede July’s employment report, which will signal the Canadian economy’s growth.
In the U.S., several purchasing managers indexes (PMI) that signify corporate buying optimism for expansion will be released. Friday will include the announcement of the non-farm payroll report for July.
Globally, the Eurozone will also announce imports, exports and trade balance, PMIs and June’s unemployment rate, retail sales and producer price index.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - July 25, 2022

2022-07-26T12:49:06Z

Last Week in the Markets: July 18th – 22nd, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Equities regained recent losses, but the major North American (DOW & NASDAQ) indexes remain 8-19% below their levels of one year ago, and 12-24% below their values year-to-date. Last week’s rally echoes small periods of gain that have occurred several times in 2022 (late January/early February, mid-March, second half of May), and perhaps again now. The recent positive results can be attributed to:
Inflation, which likely has not peaked, is seeing its growth rate lessen, and wage growth, which contributes to inflation, has also slowed. Canadian consumer inflation hit a 39-year high at 8.1%, lower than expected. ( Source )
Commodity prices are continuing to fall (oil, metals, lumber, corn, wheat, soybeans), which broadly lowers inflationary pressure for end consumers as well as companies.
The European Central Bank (ECB) raised its key interest rate for the first time in more than a decade by ½ percent (50 basis points). Inflation woes are being exacerbated by the weakening Euro, and this increase is the first step in the “further normalization of interest rates” (i.e., rising back to more typical and traditional levels) at upcoming ECB meetings. ECB Statement
Volatility has increased recently, as evidenced by the rapid swing from declines to gains in equity markets. Year-to-date volatility is 39% higher. Goal-based planning and discipline remain paramount. ( Source )

What’s ahead for this week?

In Canada, Gross Domestic Product (GDP) figures for May will be announced along with the federal government’s budget balance for April.
In the U.S., the most important announcement will arrive from the Federal Reserve’s FOMC on Wednesday when the latest monetary policy statement and interest rate decision is released.
Globally, French, German, and Spanish GDP for the second quarter will be released. German and Italian CPI for July will also be announced.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

RESP Withdrawal Options

2022-07-21T13:03:42Z

So, you’ve saved for your child’s education within a Registered Education Savings Plan (RESP), hoping that they will pursue post-secondary education one day.

Congratulations! They are enrolled!

For all these years, your contributions, grants, and growth have been tax-sheltered. So now you’re wondering how best to get the money out of the plan and how it works - Let us help you .

Within the RESP plan, there are the subscriber’s contributions, grants, and possibly bonds received, and earnings on the investments.

Withdrawals of the original contributions are referred to as Post-Secondary Education (PSE) withdrawals and are not taxable.

The Canada Education Savings Grant and Canada Learning Bond (CESG, CLB), if applicable, and earnings on the investments are taxable to the student, referred to as Educational Assistance Payments (EAP) . You want to withdraw all EAP dollars while your child is in school so that those funds are taxed in their hands, not yours. Before making any withdrawals, it is important to find out the available EAP amounts for tax planning from your RESP provider.

For the 1st 13 weeks of a program, there is a maximum EAP withdrawal of $5,000 for full-time and $2,500 for part-time programs.

After the initial 13 weeks, there is no limit. Even if the funds are not needed upon your child beginning their program you may consider withdrawing some to take advantage of the basic exemption amount of $14,398 for tax year 2022. That means the student can withdraw those funds tax-free up to that amount if they have no other income. If they are working part-time, make sure to factor that in. EAP amounts can be taken for up to six months after the program ends.

The name of the game is to ensure the plan is completely drawn down by the time your child finishes school.

RESOURCE

Canada Revenue Agency – Registered Education Savings Plans (RESP) Guide

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4092.html

Available in HTML, PDF, and alternate formats

If money is left in the plan after they finish their studies, or if they didn’t pursue post-secondary education, you can collapse the RESP and withdraw your original contributions without any tax. If there is still grant or bond money left, it’s headed back to the government. All earnings in the plan are taxable to you, the subscriber, plus a 20% penalty tax. If you have not reached your RRSP contribution limit, you can transfer up to $50,000 of the growth to your RRSP and avoid the penalty tax. The RESP must be in existence for 10+ years, with all beneficiaries being at least 21 years old and not enrolled in a post-secondary education program. CESG and CLB are still repaid to the government.

You may be able to transfer the funds to a sibling under 21, or in the case of a family plan, have another beneficiary use the proceeds. CESG exceeding $7,200 per beneficiary must be repaid.

An RESP can remain in place for up to 36 years from when the plan was opened. If your child’s circumstances change in a few years, they may still be able to use those funds as intended and taxed to them. It can also give you time to accumulate RRSP contribution room if it appears you might need to wind up the plan.

There are many ways to structure the withdrawals and different aspects to each, so please get in touch with us so we can plan the appropriate withdrawal strategy for your family.

H ave Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - July 18, 2022

2022-07-18T19:02:38Z

Last Week in the Markets: July 11th – 15th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The two most significant economic events last week for Canadian investors was the announcements of U.S. inflation and Bank of Canada monetary policy.
Overall, prices in the U.S. have risen 9.1% since last year according to the Consumer Price Index (CPI). The drivers of price increases continue to be food and energy as prices rose 1.3% in June. The price of food rose 10.4% year-over-year with restaurant and at-home meals rising 7.7% and 12.2%, respectively. The price of energy rose 41.6% with gasoline (59.9%), electricity (13.7%) and natural gas (38.4%) being eclipsed by the increase in fuel oil prices at 98.5%. ( Source )
In response to domestic and international inflation, the Bank of Canada increased its interest rates by a full percentage point (100 basis-points). This move followed the two previous interest rate meetings in April and June that each increased rates by 50 basis-points, and March’s announcement of a 25 basis-point increase. ( Source )

What’s ahead for this week?

In Canada, consumer inflation numbers (June, year-over-year, overall and core) will be released on Wednesday. Additionally, housing starts and new housing price index for June will be announced along with May’s retail sales.
In the U.S., the National Association of Home Builders will release its housing price index, and existing home sales, building permits and housing starts will accompany it. Energy related indicators, like oil imports, gasoline inventories and production, and refinery utilization could gain more attention than usual when announced this week.
Globally, the Bank of Japan will announce its interest rate decision, and its CPI. The United Kingdom and the Eurozone will also announce their CPIs, along with British and German Producer Price Indexes. On Thursday morning (8:15 am Eastern) the European Central Bank will issue its interest rate decision.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - July 11, 2022

2022-07-11T19:27:20Z

Last Week in the Markets: July 4th – 8th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

It was a minor turnaround for equity investors. After major losses year-to-date and year-over-year, some positivity returned to North American indexes as they delivered modest gains. The increases were 1 – 2% for the TSX, Dow and S&P 500 and nearly 5% for the NASDAQ for a 4-day week in U.S. that followed Monday’s Independence Day.
The week concluded with Friday’s announcement that 372,000 jobs had been added to the U.S. economy in June. That number is just slightly below the 3-month rolling average of 375,000 and was welcome news for markets. U.S. unemployment sits at a 50-year low of 3.6%. In Canada the unemployment rate reached a new record low of 4.9% after the addition of 43,000 jobs and a reduction in labour force participation. The fear is that recent central bank actions will push the economy into recession, but the robust jobs market suggests that a recession, if it is coming, has not arrived, yet. ( Source )
Inflation remains high and interest rates will continue to be raised to battle it. The trade-offs among inflation, jobs and economic growth will continue for the next few months and quarters. Should the tightening by central banks like the Federal Reserve push the American and global economy into recession, sentiment is growing that it could be shallow and short-lived. Should it occur equity markets will suffer again, but a smaller and less persistent recession would not affect markets as deeply as first predicted.

What’s ahead for this week?

In Canada, the Bank of Canada will release its interest rate decision at 10 am on Wednesday. Analysts expect an increase, but the size of the increase at 50 or 75 basis points is being debated.
In the U.S., the major news will be the release of the Consumer Price Index (CPI) on Wednesday morning followed by the Producer Price Index (PPI) the following day. The consumer inflation levels will provide additional insight into coming Federal Reserve actions regarding inflation control. The next scheduled opportunity to adjust interest rate is set for July 27th.
Globally, Japan’s machine tool and machinery orders and Producer Price Index, China’s imports, exports and trade balance, and U.K.’s Gross Domestic Product, industrial and manufacturing production will be announced. Consumer inflation in France, Germany, Spain will be released.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - July 4, 2022

2022-07-04T16:57:30Z

Last Week in the Markets: June 27th – July 1st, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The first half of 2022 concluded with the major indices losing 11% to 29% of their value over the past six months, and 6% to 23% over the past full year.
The S&P 500 is now considered to be in a bear market having declined 20%.
Gold has held its value as a safe-haven investment with a loss of 1½% this year and a gain of almost as much year-over-year. Energy prices (i.e., oil) have rebounded this year and over the past year from about $75 per barrel to $108. Unfortunately, the prices of oil, gas and gasoline are major contributors to the high rates of inflation continuing to be felt around the world. The war in Ukraine, struggling supply chains, and high employment levels with rising wages have pushed consumer inflation to levels not seen in four decades.
Continuing a strong and disciplined approach remains important as the second half begins.

What’s ahead for this week?

In Canada, the Bank of Canada will release its Business Outlook. May building permits, imports, exports and trade balance will be announced along with June employment, unemployment, labour force participation rates.
In the U.S., markets will be closed on Monday to observe Independence Day. The week’s announcements will include durable and factory goods orders, mortgage market data, imports, exports and trade balance, purchasing managers indexes (PMIs), and non-farm payrolls and wages.
Globally, a broad range of indicators will be released in Europe including German imports, exports and trade balance, French current account and industrial production, Italian and German goods and services PMIs. The head of the European Central Bank will make an announcement and release its monetary policy meeting minutes.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Summer 2022 Newsletter

2022-07-04T15:36:20Z

Accounting

Wealth Management

The Executor Checklist

Human Resources Solutions

Firm News

Staff Updates

Please Note Our Summer Hours

The offices of Ward & Uptigrove will close Fridays at 12:00pm from July through to September 2, 2022

Firm Updates

Immediate Expensing of Eligible Property

In the 2021 Federal budget, the government proposed to allow for immediate expensing of up to $1,500,000 per taxation year for eligible property acquired by a Canadian-controlled private corporation (CCPC) on or after April 19, 2021 that becomes available for use before January 1, 2024.

Properties that do not qualify for this immediate expensing incentive are generally long-lived assets such as buildings and similar structures (Classes 1 to 6), goodwill (Class 14.1) and surface constructions such as roads and parking lots (Class 17). There are a few other classes that do not qualify but they generally do not apply to our clients. All other asset classes, such as vehicles, machinery and equipment, would qualify for immediate expensing subject to certain rules and restrictions.

Due to government delays with issuing draft legislation for this measure, many of our corporate clients that had eligible expenses in the eligible period were unable to file a claim for immediate expensing.

When the 2022 Federal budget was released on April 7, 2022 there still wasn’t draft legislation and further changes were proposed to immediate expensing, being the following:

Eligible persons were expanded to include Canadian-resident individuals and Canadian partnerships, where all the members are CCPCs or Canadian-resident individuals for property acquired after December 31, 2021, that becomes available for use before January 1, 2025 (or before January 1, 2024 for partnerships where not all the members are individuals).
Provided that individuals or partnerships cannot use the immediate expensing incentive to create or increase a loss.
Summary of eligible period based on eligible person or partnership:
CCPCs – must be acquired on or after April 19, 2021 and must be available for use before January 1, 2024
Individuals – must be acquired on or after January 1, 2022 and must be available for use before January 1, 2025
Canadian partnership where all the members are individuals – same as individuals above – must be acquired on or after January 1, 2022 and must be available for use before January 1, 2025
Canadian partnership where all the members are not individuals – must be acquired on or after January 1, 2022 and must be available for use before January 1, 2024

Draft legislation, for the immediate expensing measures contained in the 2021 and 2022 Federal budgets, was only released on April 28, 2022 as part of Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures. CRA only recently started accepting corporate income tax returns that were filed with an immediate expensing claim and stated that it wouldn’t accept amended returns until this Bill had received royal assent.

Bill C-19 received royal assent on June 23, 2022 and as such is now considered law. During the summer and early fall months, our firm will be reviewing our corporate clients that filed a tax return with a fiscal year that ended after April 19, 2021 and where its determined to be beneficial, we will look to amend these returns for immediate expensing.

Return of Fuel Charge Proceeds to Farmers Tax Credit

In the 2021 Federal Fall Economic Update, the government announced a new refundable tax credit to return fuel charge proceeds from pollution pricing directly to farming businesses in certain jurisdictions, of which Ontario is one of them. This started with the 2021 year and there doesn’t seem to be an end date specified.

The credit is available to corporations, individuals, partnerships, and trusts that:

Are actively engaged in the management or day-to-day activities of earning income from farming, and
Incur total farming expenses of $25,000 or more.

The amount of the credit will be determined by multiplying a specified payment rate and is claimed as part of the income tax returns.

The payment rate for 2021 and 2022 are set at $1.47 and $1.73 per $1,000 of eligible farming expenses, respectively. The credit will be required to be included in income.

Eligible farming expenses are those amounts deducted in calculating income from farming for income tax purposes, excluding any deductions arising from mandatory and optional inventory adjustments and transactions with non-arm’s length parties.

Regarding our corporate clients, this credit is claimed on schedule 63. The Canada Revenue Agency (CRA) has yet to officially publish this schedule. The tax program that we use to file corporate tax returns allows us to file a claim for this credit; however, we have identified certain issues with the calculation that the publishers of our tax program are working with the CRA to resolve. As such, some claims for this credit may need to be amended if the calculation is updated by our tax program in the future.

This measure is contained in Bill C-8, An Act to implement certain provisions of the economic and fiscal update tabled on Parliament on December 14, 2021 and other measures . It recently received royal assent on June 9, 2022 and as such is now considered law.

Ontario Regional Opportunities Investment Tax Credit (ROITC)

In our Year End 2021 Newsletter published on December 17, 2021, we provided a summary of the ROITC which provides a refundable tax credit of up to $90,000 for purchases, renovations or additions of Class 1 or 6 properties (generally buildings used for commercial and farm activities) in certain geographic regions of Ontario.

Prior to the proposal, the temporary increase in the ROITC rate (from 10% to 20%) was set to expire on December 31, 2022. However, the 2022 Ontario budget proposes to extend this temporary increase to December 31, 2023 (i.e. extended by 1 year).

This measure is contained in Bill 126, Plan to Build Act (Budget Measures), 2022 . It’s still in its early stages before it can be considered law.

Ontario Annual Information Return

Company Key Confirmation Letter

In our November 4, 2021 news release, we noted that Ontario had introduced a new online Ontario Business Registry. For us to continue filing an Ontario Corporation’s Ontario annual information return (please note this is separate from a Corporation’s annual corporate tax return that is filed with the Canada Revenue Agency) we require access to this new online registry for each of our clients. Where possible, we’ve requested a company key be issued to each of our clients that are Ontario Corporations. If you receive a company key confirmation letter, please provide us a copy of this letter by:

Dropping it off at reception
Mailing it to our office
Emailing it to admin@w-u.on.ca

If you have yet to receive a letter from the Ontario Government, please reach out to our office for assistance.

Our administrative staff have started following up with clients that have not provided us a copy of this confirmation letter due to the deadlines associate with filing the Ontario annual information return.

Important Note on How We Will Complete the Ontario Annual Information Return for our Clients

When we file the Corporation’s Ontario annual information return, we will assume there’s been no changes to the Corporation’s name, business address, and list of directors and officers. These changes should be made by the Corporation’s lawyer by filing a Notice of Change with the Ontario Business Registry soon after there’s been a change. Therefore, it is essential that you inform the Corporation’s lawyer promptly of any changes to the Corporation’s name, business address, and list of directors and officers.

If, for some reason, the Corporation’s lawyer has not made the required changes, please let us know so we can correctly file the Company’s Ontario annual information return.

Poultry and Egg On-Farm Investment Program (PEFIP)

PEFIP is a 10 year program to support on-farm investments in:

increasing efficiency or productivity
improving on-farm food safety and biosecurity
improving environmental sustainability
responding to consumer preferences (improving animal welfare, adopting alternative housing systems, transitioning to organic production, etc.)

For assistance with registration or submitting a project application, please contact your accountant. We are starting to see clients receive funding from this program.

The applicant guide can be viewed by following the link here.

Accounting for Biological Assets – ASPE Section 3041

The new section of accounting standards providing guidance on accounting for agricultural inventories is effective for fiscal periods beginning on or after January 1, 2022.

Productive biological assets are:

Held for use in the production or supply of agricultural inventories or other productive biological assets (e.g. breeding livestock)
Acquired or developed for use on a continuing bases with other than short productive lives (i.e. longer than one year) and
Not intended for sale in the ordinary course of business

Wage & Rent Subsidy Program Updates & Deadlines

All Canada Emergency Subsidy programs implemented during the COVID-19 pandemic have ended, effective May 7, 2022.

The deadline to apply for the final period of The Canada Recovery Hiring Program (CRHP), The Tourism and Hospitality Recovery Program (THRP) and the Hardest-Hit Business Recovery Program (HHBRP) is November 3, 2022.

The Canada Emergency Business Account (CEBA) Loans repayment deadline has been extended until December 31, 2023 for eligible CEBA loan holders in good standing.

Occupational Health & Safety Act, 1990

Amendment – effective July 1, 2022

Increased penalties for employers that are convicted of offences under the OHSA (up to $1.5 million) plus increased penalties for officers, directors and other individuals.
Increased limitation period for prosecutions to two years after the later of
the occurrence of the last act or default upon which the prosecution is based, and
the day upon which an inspector becomes aware of the alleged offence.
Requirement to provide naloxone kits in the workplace when an employer becomes aware, or ought reasonably to be aware, that there may be a risk of a worker having an opioid overdose at a workplace.
Changes to the OHSA in this regard also include requirements for training and limits on disclosure of personal information.

Bill 27 – Working for Workers Act, 2021

The Right to Disconnect – effective June 2, 2022:

Applies to all employers in Ontario with more than 25 employees;
Requires a written policy that must have been communicated to staff by June 2, 2022

Non-Compete Agreements – effective October 25, 2021:

Applies to all Ontario workplaces;
Employers are prohibited from entering into employment contracts or other agreements with an employee that include a non-compete agreement.

Bill 88 – Working for Workers Act, 2021

Digital Platform Workers' Rights – awaiting proclamation of the Lieutenant Governor as to specific date

Applies to companies with “an online platform that allows workers to choose to accept or decline digital platform work.”;
Digital Platform Workers will be recognized as workers under the Employment Standards Act, 2000 and will be entitled to rights as provided by the Act, including minimum wage.

Business and Technology Consultants – effective January 1, 2023

The Employment Standards Act, 2000 will update definitions for business consultants and information technology consultants;
Where previously exempt from ESA provisions, these positions will now only be exempt from the application of the ESA where very specific criteria are met.
More detail has yet to be released on specific criteria.

Electronic Monitoring – effective October 11, 2022

Applies to all employers in Ontario with more than 25 employees;
Requires a written policy;
At present, the amendment does not define “electronic monitoring,” and does not seek to limit or prohibit electronic monitoring of employees but does require that such practices are transparent.

Dates for Fall – Emerging Leaders Program

Learn more about the program and how to register here.

The Executor Checklist

Immediately

Locate and review the Will or any other supporting documents regarding funeral, burial, etc.
Make proper arrangements that follow the deceased’s wishes
Approve organ donation if applicable
Secure assets (home, business, cars, etc.)
Arrange for the care of children and/or pets

The Following Days

Obtain proof of death, or death certificate
Cancel credit and debit cards
Cancel all government cards (driver’s license, passport, health card, SIN)
Cancel all subscriptions and membership cards
Cancel benefits such as CPP, OAS, pensions, etc.

Need Help? Contact a Ward & Uptigrove Wealth Management Representative.

519-291-3040 or email info@w-u.on.ca .

The Following Weeks

Contact and meet with an estate lawyer
Complete list of the deceased assets
Review the Will and supporting documents with the beneficiaries
Ensure proceeds from RRSP, TFSA, life insurance, etc. are paid to the estate or the designated beneficiaries
Contact deceased’s creditors to arrange payment of debts
Notify banks, financial advisors, accountants, insurance
Apply for government death benefit
Notify utility companies
Arrange for payment of recurring expenses
Start making a list of the deceased assets
Review any legal actions in which the deceased was involved
Apply for probate
Collect debts owing to the estate
Sell / distribute assets as directed by the Will
Maintain meticulous records of all actions taken on behalf of the estate
File outstanding tax returns
File terminal tax return
File estate tax return
Obtain a tax clearance certificate
Apply for executor compensation if applicable
Distribute residual estate assets
Obtain releases from beneficiaries

Staff Updates

We are proud to congratulate the following staff members on their development and progression into new roles.

Agriculture Department

Progressions

Business Department

Progressions

Operations

Congratulations on achieving your designation!

Welcome!

We are thrilled to welcome the following new staff members to our team:

Have a Wonderful Summer

from the Partners and Staff of Ward & Uptigrove

Special Needs Planning

2022-06-30T13:15:14Z

Recall your last vacation? How much time did you spend planning where you were going, how were you going to get there, and what activities you would enjoy once you arrived? Sadly, most people spend more time vacation planning than they do financial planning.

A financial plan is the roadmap for your future and the strategy for your family’s security. It is important for every adult, but it’s particularly important if you have dependents, and even more so if one or more of those dependents are disabled. When you are planning for a disabled dependent, you need to factor in the additional needs and time the financial resources must last for a disabled dependent, along with the healthcare needs and associated costs, managing support needs, dealing with government agencies, and a myriad of other concerns.

Most financial plans will recommend using Registered Retirement Savings Plans, Tax-Free Savings Accounts, Insurance, and Wills along with Powers of Attorney to help achieve goals and protect lifestyle. However, those requiring Special Needs Planning will likely benefit from having a LIFE PLAN GUIDE (see the branded guide attached), a special trust referred to as a Henson Trust (link https://www.planningnetwork.ca/resources/henson-trust), Registered Disability Savings Plans (link to branded info sheet), Ontario Disability Support Planning (insert link - https://www.ontario.ca/page/ontario-disability-support-program), along with other special investment and insurance options to protect and support loved ones.

In addition to the financial planning needs, there are also long-term care planning needs:

Who will look after my child when I die or if I become incapacitated?
Where will they live?
Who will take them to their doctor and therapy appointments?
How will they pay their bills?
My whole life has been about looking after my child, but I have other goals that I would like to achieve; how can I do both?

These questions can be overwhelming. Consider building a network of people to provide support for your disabled dependent while you are still healthy and involved is critical. Disabled dependents often rely heavily on their care providers. If their sole care provider is Mom or Dad and they are suddenly out of the picture, it can be devastating for them. Parents should consider aligning themselves with professionals who have experience in dealing with special needs planning, such as Accountants, Lawyers, Certified Financial Planners, Trust Officers, Counsellors, Support Workers, Caregivers and Doctors, as well as Associations, Support Groups and other related networks.

The best advice for families with special needs dependents is to choose a qualified, trusted team of professionals. The financial planning process is similar regardless of whether you have disabled dependents or not;

Develop and implement a comprehensive financial plan and

long-term care strategy without delay. Contact us today, we can help!

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - June 27, 2022

2022-06-27T19:41:10Z

Last Week in the Markets: June 20th – 24th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Overall equity indices in North America reversed the losses of two weeks ago with a strong showing.
The TSX regained less than 1%, while the U.S. indexes rebounded with increases of 5.4% to 7.5%. For Canadian investors who hold assets in U.S. funds, these powerful gains south of the border were trimmed by a 1% decline in the U.S. dollar. Nonetheless, a reversal and movement to the positive was a welcome respite for equity investors.
The light economic news last week was overshadowed by U.S. Supreme Court decisions and Congress actions. House prices across the U.S. moved upward, which was not expected, and crude oil declined. It appears that recession fears have ebbed, and the previous negative view may have been too pessimistic. The sentiment was that bargains existed after the preceding weeks of losses (the S&P 500 had 10 weekly losses in the last 11 weeks), and share prices were bid upward as value was gathered.
Consumer inflation in Canada rose in May to 7.7% year-over-year (YOY), an increase from the April YOY level of 6.8%. The price increases, as most Canadians would know, was driven by the price of gasoline, which rose 12% last month, and has risen by 48% over the past year. Groceries rose 9.7% in May, equaling the increase of April. On a monthly basis inflation rose 1.4% in May, more than double the monthly increase of 0.6% experienced during April. ( Source )
In eras of volatility, and when volatility is low, disciplined investing has been proven to be the best long-term strategy. The equity markets have been volatile, and negative, for 2022 and retirement portfolios deserve discipline. ( Source )

What’s ahead for this week?

In Canada, prior to the celebration of Canada on Friday, July 1st, the major economic release on a relatively quiet week with April’s Gross Domestic Product update.
In the U.S., May’s durable goods orders, pending home sales, house price index, goods trade balance, wholesale inventories, and personal spending will be released. June’s purchasing managers indexes from ISM and Markit are scheduled. First quarter consumer spending and GDP will also be announced.
Globally, OPEC will conduct a meeting to agree short-term production levels. China will release its industrial profits for YTD and YOY. Japan will announce its latest consumer inflation level. Eurozone inflation and GDP will be announced along with Germany’s retail sales and employment figures.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - June 20, 2022

2022-06-20T18:51:03Z

Last Week in the Markets: June 13th – 17th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Equities, the Canadian dollar, gold, and oil all had a difficult week as economic indicators and negative news continued. The market performance was dominated by three elements: inflation, interest rates, and fear of recession. The continued rise of inflation demanded a response from the U.S. Federal Reserve to raise interest rates. Concern is that the delayed maneuver is an over-correction.
U.S. consumer inflation, announced on June 10th, rose 1% in May, and sits at 8.6% year-over-year. The strong jobs market focuses monetary policy on inflation-fighting. ( Source )
Inflation is not a North American problem. In 16 of 44 advanced economies, the rate of inflation in the first quarter of 2022 has quadrupled compared to Q1 2020. ( Source )
The Federal Reserve raised the federal funds rate by three-quarters of a percent ( 75 basis point s) on Wednesday. An increase of this magnitude has not occurred since 1994, signifying the severity of the situation. The rate now lies in a range from 1.5% to 1.75%. At the press conference to announce the increase, Federal Reserve Chair, Jerome Powell, stated that the Fed, “anticipates that on-going increases in that rate will be appropriate.” To-date in 2022 the Fed has increased the rate by 1½%. The median projection by Fed Governors predicts that the federal funds rate could be 3.4% by the end of this year. The first 80 seconds of the hour-long press conference provides a succinct summary. ( Source )
According to the Financial Post, the S&P 500 has priced-in an 85% likelihood that a recession will occur with interest rates rising and expected to rise further ( Source )

What’s ahead for this week?

In Canada, monthly manufacturing, wholesale, and retail sales figures for last month will be released. On Wednesday, the consumer inflation data (Consumer Price Index and Core) will be announced for May.
In the U.S., markets will be closed on Monday for the observance of the federal holiday, Juneteenth National Independence Day . Starting on Tuesday, housing information for May will be released, which includes new home sales, existing home sales, and mortgage applications.
Globally, the U.K. and Japan will release their consumer inflation data for the month of May. Purchasing Manager Indexes (PMIs), which represents the optimism of professionals who buy for corporations, across most of Europe will be announced.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Retirement - Ready or Not!

2022-06-16T14:08:09Z

Are you Retirement Ready?

To gain access to the investable assets today, and manage them into retirement, advisors should examine their clients in a broader, more complete perspective.

Check out the table below to see if you're "Retirement Ready"... or not!

The Bottom Line

Without planning that includes more elements than just finances, retirement and the years leading up to it can be anxiety laden. The period that should be relatively carefree will be the opposite.

Contact a Wealth Management representative with any questions you may have at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - June 13, 2022

2022-06-13T16:32:06Z

Last Week in the Markets: June 6th – 10th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

North American equities were flat on Monday, moved higher and peaked for the week on Tuesday, and then declined for three consecutive days. The week culminated with losses of 1½ to 3½ percent on both Thursday and Friday.
These declines, for the most part, anticipated and preceded major economic releases last week. On Friday the latest Canadian Labour Force Survey and U.S. consumer inflation data was released.
In May, the unemployment rate in Canada fell 0.1% reaching a new record low of 5.1%. Employment rose by 40,000 when full-time work increased by 135,000 and part-time work fell 96,000. Wages have risen 3.9% over the past year. ( Source )
The U.S. Consumer Price Index (CPI) rose 1.0% in May and the annual inflation rate sits at 8.6%. Again, the sub-indexes for food and energy were major contributors to the overall inflation rate, rising 1.2% and 3.9%, respectively, during May. The rise of these two categories is significantly higher than the increases experienced in April. The inflation rate for “all items less food and energy” rose 0.6% in April and again in May, and this flattening was a small measure of positive news. ( Source )
In stark contrast is China’s CPI of 2.1% for May, which has been heavily influenced by strict Covid-19 controls. “The modest price pressures also allow China’s central bank to release more stimulus to prop up the economy even as monetary authorities in most other countries scramble to hose down inflation with aggressive interest rate hikes”. For example, the European Central Bank left its interest rates unchanged last week but intends to raise them by ¼ percent (25 basis points) in July. ( Source1 , Source2 )

What’s ahead for this week?

In Canada, April’s construction investment, manufacturing sales and new orders, new vehicle sales and wholesale trade will be announced along with May’s housing starts, home price index and industrial product and raw materials price indexes.
In the U.S., after last week’s CPI announcement the Producer Price Index and the Import and Export Price Indexes for May will be released. The Federal Reserve’s Open Market Committee meets on Tuesday and Wednesday and will release a monetary policy update and economic projections on June 15th at 2 pm.
Globally, inflation numbers will be announced across Europe with major economies like Germany and France reporting as well as the data for the Eurozone. The Banks of England and Japan will announce interest rate decisions.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - June 6, 2022

2022-06-06T14:55:26Z

Last Week in the Markets: May 30th – June 3rd, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Canadian equities outperformed their American peers last week as the TSX finished just slightly ahead of the previous week’s close. The S&P 500, Dow, and NASDAQ each dropped about 1% during last week’s shortened session following Memorial Day observances. Global equities represented by the All-Country World Index fared better than American indices, but still lost ½ % point.
Canadian equities corelated positively to the rise in the price of oil, which buoyed the value of the Canadian dollar. The belief that these three indicators (the TSX, CDN$ and oil) are becoming more independent from one another was disproved last week, if only temporarily.
Despite the negative results in the U.S. and positive results in Canada, it was positive news in the U.S. that dominated economic releases last week. The U.S. economy added 390,000 jobs in May, a month where 330,000 people rejoined the labour force. Additional job seekers are an indicator of a strong jobs market suggesting that wages are rising above expectations and job finding is becoming easier. The slowing and eliminating of pandemic restrictions and government support is also contributing workers to the labour force. The U.S. unemployment rate remained unchanged at 3.6%, a historically low level.
The implications of the rising wage may have contributed to last week’s U.S. equity losses. Average hourly earnings have risen 5.2% over the past twelve months. This eases the effect of inflation on households and supports on-going economic growth. However, growing wages contribute to inflation, and continued inflation suggests further interest rate increases from the Federal Reserve and other central banks may occur, especially where the same strong labour market and inflation exists. ( Source )

What’s ahead for this week?

In Canada, the merchandise trade balance for April will be released during a slower than usual week for economic announcements. Employment numbers for May will be announced on Friday.
In the U.S., the goods and services trade balance and consumer credit for April are scheduled. The Consumer Price Index (CPI) for May is scheduled for Friday morning, and its results (slowing, steady or increasing) will provide insight to the last and next Federal Reserve monetary policy action.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

The Executor Checklist

2022-06-01T15:21:27Z

So, you’ve been chosen to be the Executor of someone’s Will – maybe a loved one or maybe a friend.

Cause for congratulations, perhaps?

It is an honour to be asked, however, the responsibilities of an Executor are very important and can be very extensive. It is not like taking up a new sport or a hobby, where you can take your time and practice until you are good at it.

As Executor you will need resources to help you; professional support services or the advice from someone who you trust that has acted in the capacity AND a good checklist that you can reference to ensure that you don’t miss any key aspects of your responsibilities.

Choose an Executor – And choose wisely.

Remember, some of our most critical life decisions to be made affect outcomes after we die.

Executor Checklist

The next steps after someone passes away.

Immediately

Locate and review the Will or any other supporting documents regarding funeral, burial, etc.
Make proper arrangements that follow the deceased’s wishes
Approve organ donation if applicable
Secure assets (home, business, cars, etc.)
Arrange for the care of children and/or pets

The Following Days

Obtain proof of death, or death certificate
Cancel credit and debit cards
Cancel all government cards (driver’s license, passport, health card, SIN)
Cancel all subscriptions and membership cards
Cancel benefits such as CPP, OAS, pensions, etc.

The Following Weeks

Contact and meet with an estate lawyer
Complete list of the deceased assets
Review the Will and supporting documents with the beneficiaries
Ensure proceeds from RRSP, TFSA, life insurance, etc. are paid to the estate or the designated beneficiaries
Contact deceased’s creditors to arrange payment of debts
Notify banks, financial advisors, accountants, insurance
Apply for government death benefit
Notify utility companies
Arrange for payment of recurring expenses
Start making a list of the deceased assets
Review any legal actions in which the deceased was involved
Apply for probate
Collect debts owing to the estate
Sell / distribute assets as directed by the Will
Maintain meticulous records of all actions taken on behalf of the estate
File outstanding tax returns
File terminal tax return
File estate tax return
Obtain a tax clearance certificate
Apply for executor compensation if applicable
Distribute residual estate assets
Obtain releases from beneficiaries

If you don’t have an Estate Plan don’t wait until it is too late! Reach out to one of our advisors if you have any questions and get started today!

Have Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - May 30, 2022

2022-05-31T17:45:50Z

Last Week in the Markets: May 23rd – 27th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

It was the first all-green week for our grid since the third week of March 2022. Although the TSX is negative for 2022, it remains the best performing, broad-based index in North America. The TSX may have been outperformed by American and the All-Country World Index (ACWI) last week, but it is the clear leader for year-to-date and year-over-year results.
The economic news in the popular press was not much improved last week, so the positive equity results could seem unpredictable, but not if you examine the details more closely:
Most major Canadian banks beat quarterly earnings expectations and remain upbeat with their forward guidance, particularly with their retail banking operations. RBC, TD, Scotiabank, BMO and National Bank beat expectations, while CIBC had growing expenses undermine their performance. The Finance sector comprises about one-third of the TSX, so the banks’ good news dominated. ( Source )
The second largest sector is Energy, which is also benefiting from higher oil prices.
Inflation is slowing slightly. The price of gasoline, which is a bellwether for many consumers, continues to rise this month, but the overall inflation rate is moderating. Prices continue to climb, but at a lower rate in the U.S. ( Source )
As inflation slows the need to trim economic growth with higher interest rates also slows. Inflation is at a 30-year high, and central banks, like the Federal Reserve, have indicated that their strongest action will be early 2022. As the year progresses the size of interest rate increases are expected to reduce. ( Source )
The continuing inflation/interest rate condition has been in-place for some time, and perhaps some overly enthusiastic pessimism has been beaten back by the better and no-worse than expected results.

What’s ahead for this week?

In Canada, real Gross Domestic Product (GDP) and current account balance for the first quarter will be released. The Bank of Canada will release its latest monetary policy response on Wednesday.
In the U.S., after Monday’s market closure for Memorial Day. April’s construction spending, manufacturing indexes, factory orders will be released along with the non-farm payroll report for May.
Globally, Japan’s machine tool orders, jobless rate, retail sales, industrial production and consumer confidence, Eurozone’s Consumer Price Index (CPI), economic and consumer confidence, Germany’s CPI, unemployment, France’s CPI and GDP will be released. OPEC+ will conduct a meeting.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - May 24, 2022

2022-05-24T19:40:04Z

Last Week in the Markets: May 16th – 20th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

It was a difficult week for equities; the TSX gained ½ point while the American indices lost 3-4%. The S&P 500 achieved its seventh consecutive weekly loss and is approaching a 20% drop of a Bear Market. The Dow has had eight weeks since it last gained on a week-to-week basis. All the indexes have lost ground in 2022,
The economic news that predicated the U.S. stock losses last week was mixed. Walmart and Target disappointed on the earnings front but indicated that foot traffic and spending remains positive as consumers moved away from pandemic necessities. Demand is strong while supply-chain issues remain. Further, consumer spending that comprises about two-thirds of U.S. Gross Domestic Product (GDP) is healthy, a tight labour market with rising wages and low unemployment, and moderating, yet historically strong, corporate earnings.
Canada’s Consumer Price Index (CPI) rose in April slightly to 6.8% compared to March’s 6.7%. Food and shelter were two categories that drove the increase. “With the unemployment rate falling to a record low in April, strong employment figures tend to put upward pressure on prices. In April, average hourly wages for employees rose 3.3% on a year-over-year basis, meaning that, on average, prices rose faster than wages, and Canadians experienced a decline in purchasing power.” ( Source )
Both the Bank of Canada and the Federal Reserve have mandates to fight inflation, and both have indicated their intention to combat rapidly rising prices with higher interest rates. ( Source1 , Source2 )

What’s ahead for this week?

Markets were closed in Canada Monday May 23rd, 2022 to observe Victoria Day four-day week will include announcements of April’s manufacturing sales, wholesale trade, and March’s retail sales and employment survey. Also, the major Canadian banks will release their latest quarterly earnings.
In the U.S., April’s new home sales, pending home sales, durable goods orders and core orders, personal income and spending and goods trade deficit will be announced. The minutes from the Federal Reserve’s FOMC meeting that raised interest rates ½ point will be released.
Globally, Germany’s business climate, Gross Domestic Product and consumer confidence will be released along with the Eurozone’s Purchasing Managers Indices in a light week for economic announcements.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - May 16, 2022

2022-05-16T17:20:34Z

Last Week in the Markets: May 9th – 13th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

It was not a positive week with full-week losses exceeding 2%; however, Friday saw North American equity indices rising between 1½% and nearly 4%,
The release of the U.S. Consumer Price Index (CPI) on Wednesday morning was a significant contributor to equity volatility and losses last week. Thankfully, price increases during April were less than March, but the annual and monthly inflation rate remains at a historically high level. Inflation of 8.3% over the past year was led by shelter, food, airline fares and new vehicles. Ongoing inflation at this high rate indicates that the Federal Reserve may remain aggressive on monetary policy, especially for short-term interest rates. With the monthly rate dropping to 0.3% in March from 1.2% in April, it appears that inflation may have peaked, which is a small measure of positive news. ( Source )
The Producer Price Index (PPI), which is the measure of inflation at the wholesale level, is beginning to slow. In April the PPI fell to 0.5% after February’s 1.1% and March’s 1.6% rise in prices. Interestingly the price increase for goods was 1.3% as services prices remained unchanged. ( Source )
China’s CPI and PPI in April arrived above estimates at annualized rates of 2.1% and 8%, respectively. These prices were driven by increasing demand due to panic buying as another pandemic wave hit, continuing supply chain issues, and rising commodity prices driven by the invasion of Ukraine. ( Source )
The supply chain and commodity price issues affecting China are global, and until they are resolved inflation will persist in North America and globally. Central banks will seek to temper inflation by increasing interest rates. The Federal Reserve has telegraphed ½% increases at its next two monetary policy meetings on June 15th and July 27th. While interest rates rise and the fear of stagflation or recession loom, capital markets will continue to deliver volatile results. ( Source1 , Source2 )

What’s ahead for this week?

In Canada, March’s manufacturing sales and new orders, construction investment, and April’s housing starts, existing home sales, MLS Home Price Index and new housing price index will be announced. CPI will also be released and will be next week’s most influential indicator for Canadian investors.
In the U.S., April’s retail sales, industrial production, business inventories, housing starts, building permits and existing home sales are scheduled for release as earnings season winds down.
Globally, China’s retail sales and industrial production, Japan’s machine tool orders, CPI, and Gross Domestic Product (GDP), Eurozone’s trade deficit, GDP, CPI and PPI will be released.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - May 9, 2022

2022-05-09T18:27:52Z

Last Week in the Markets: May 2nd – 6th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

At 2 pm Eastern on Wednesday the U.S. Federal Reserve increased short term interest rates. The 50-basis point increase (+0.50%) to the federal funds rate was the largest increase since 2000. ( Source )
Immediately after the Fed’s announcement, equity markets reacted positively, but the gains achieved on Wednesday were reversed on Thursday. The Dow rose 932 points before losing 1,063, the S&P 500 gained 125 points, then lost 154. The TSX gained a total of 473 points on Tuesday and Wednesday before dropping 489 on Thursday. The NASDAQ gained 402 points on Wednesday before dropping 764 by week’s end.
The VIX Volatility Index rose during the second half of last week and now sits near its highest level since March 2020 when the pandemic was in its early, most unpredictable stages. Until inflation is tempered, supply chain issues resolved, and energy costs are more stable, volatility will likely remain above average.
The Federal Reserve’s increasing of interest rates was further justified on Friday when April’s non-farm payrolls showed that employment had increased by 428,000. With the unemployment rate (3.6%) and number of employed (5.9 million) holding steady, the Bureau of Labor Statistics indicated the similarity of these numbers to pre-pandemic data in February 2020. The labor force participation rate is 1.2 percentage points below the February 2020 level of 63.4%. (Source )
In Canada, the employment numbers also released on Friday provided a mixture of positive and negative news. The number of jobs remained unchanged in April, as did the employment rate (61.9%) and the unemployment rate edged downward by 0.1% to 5.2%. Average hourly wages rose at an annualized rate of 3.3%, also unchanged from March. ( Source )

What’s ahead for this week?

In Canada, March’s building permits are part of a light week for economic announcements amid the quarterly earnings season. Several large entities like Boardwalk and RioCan REIT, George Weston, Suncor, Manulife, Quebecor, and Canadian Tire will report their most recent performance.
In the U.S., inflation will dominate the economic releases. The Consumer Price Index (CPI) for April will be announced on Wednesday, followed by the Producer Price Index (PPI) on Thursday. Import and Export Price Indexes will be released on Friday.
Globally, scheduled announcements include China’s Consumer and Producer Price Indexes, trade surplus and money supply, Japan’s Purchasing Managers Indexes, household spending and bank lending, Germany’s CPI, and the Eurozone’s industrial production.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - May 2, 2022

2022-05-02T17:39:51Z

Last Week in the Markets: April 25th – 29th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

For the fourth consecutive week, all equity indices in our reporting table lost value; decline has ranged between 5% – 13%. The TSX, which has been supported by rising commodity prices and lost 5% in April, has delivered a relatively strong performance among equity indices. The reasons for the negative performance include:
Domestic, international, and global inflation remains high, and well beyond the goals set by central banks.
As inflation rises, central banks have begun to act. The Federal Reserve is likely to raise interest rates ½ point next week. The Fed along with other central banks want to slow growth by raising the cost of borrowing for individuals, families and firms. Increasing the cost of financed goods and services will temper economic growth, which may eventually cause inflation to slow.
Although the spread of the coronavirus has slowed and its effects have been less severe based on hospitalization and death rates, the pandemic continues in China. Lockdowns are again affecting growth for the world’s second largest economy.
Contradictory Gross Domestic Product (GDP) numbers in the U.S. require additional scrutiny to be understood. The U.S. economy shrank at an annualized rate of 1.4% in the first quarter of 2022, after growing at a rate close to 7% at the end of last year. The results were somewhat of a surprise with analysts predicting a growth of 1%. ( Source1 , Source2 )
The protracted invasion of Ukraine continues to threaten global supply chains and economy.
Earnings season has delivered less than stellar results.

What’s ahead for this week?

In Canada, the merchandise trade balance will be released along with April’s employment numbers.
In the U.S., March’s construction spending, factory orders, trade deficit and consumer credit will be announced. Purchasing Managers Indexes (PMI) from Markit and ISM will be released for goods and services. On Wednesday at 2 pm Eastern the Federal Open Market Committee of the Federal Reserve will release its latest monetary policy for short-term interest rates and bond-buying. Non-farm payrolls will be announced on Friday.
Globally, PMIs for China, Japan and Eurozone will be released. Germany’s joblessness, trade surplus, retail sales and factory orders will be announced. OPEC+ will hold a production and pricing meeting.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Tax Highlights: 2022 Ontario Budget

2022-04-29T17:39:04Z

On April 28, 2022, Ontario’s Minister of Finance, Peter Bethlenfalvy, presented the province’s budget.

The budget does not change corporate or personal income tax rates, but does:

extend the temporary increase to the regional opportunities investment tax credit rate
introduce the Ontario seniors care at home tax credit, beginning the 2022 taxation year

An Ontario general election will be held on (or before) June 2, 2022. It is uncertain whether tax initiatives proposed in the Ontario budget will be enacted into law before the Legislative Assembly of Ontario is dissolved for the province’s upcoming general election.

Business tax measures

Corporate income tax rates

Ontario’s corporate income tax rates will remain as shown in the table below. The table also shows combined federal/Ontario corporate tax rates.

Regional opportunities investment tax credit (ROITC)

The budget proposes to extend the temporary increase in the ROITC rate (from 10% to 20%) to qualifying investments that become available for use after March 23, 2021 and before January 1, 2024 (currently available before January 1, 2023). The ROITC is a refundable corporate income tax credit that is available for CCPCs that make qualifying investments in eligible geographic areas of Ontario. The maximum credit is $90,000 per taxation year during this temporary enhancement period.

Personal tax measures

Personal income tax rates

The budget does not change Ontario’s personal income tax rates. Top combined federal/Ontario personal income tax rates are shown below. These rates apply to individuals with taxable income above $221,708 in 2022 ($220,000 in 2021).

Ontario seniors care at home tax credit

The budget proposes to introduce the Ontario seniors care at home tax credit (SCHTC), starting with the 2022 tax year. A refundable tax credit, the SCHTC would provide up to 25% of an eligible senior’s claimable medical expenses up to $6,000 (maximum credit of $1,500). The credit would be reduced by 5% of family net income over $35,000, and the maximum credit would be fully phased out when family net income reaches $65,000.

Taxpayers would be eligible to claim this credit if they, or their spouse or common-law partner, turned 70 years of age or older in the year. Medical expenses eligible for the SCHTC would be the same as those claimed for the Ontario medical expense tax credit and taxpayers could claim both the SCHTC and the non-refundable federal and Ontario medical expense tax credits for the same eligible expenses.

IAIC Market Update - April 25, 2022

2022-04-25T18:13:40Z

Last Week in the Markets: April 18th – 22th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

North American equity indices started the week flat; rose on Tuesday and Wednesday before tumbling on Thursday and Friday. The NASDAQ dropped nearly 4% for the week. Friday saw the other indices lose between 2%-3% and 3%-4% for the week. The reasons coalesce around inflation and interest rates:
StatsCan released Consumer Price Index (CPI) data for March on Wednesday. Prices increased 1% during over the past month and 6.7% over the past year. It is the largest, annual reading in 31 years. Gasoline has been a major contributor to the growing rate of inflation after rising more than 19% since February 1st. Rising inflation is further justification of the Bank of Canada’s interest rate increases. ( Source )
Fed Chair, Jerome Powell, indicated that inflation may have peaked in March as wages have increased, housing costs have climbed rapidly, and service industry price jumps amid continued supply chain problems. ( Source )
The Fed’s moves are making equities less attractive than bonds and other fixed income investments. The yield on 10 Year U.S. Treasuries has moved higher recently, doubling since early December, and gaining nearing 1½ points in the last five weeks. ( Source )
The Federal Reserve next meets to discuss interest rates on May 3-4.
Additionally, the invasion of Ukraine continues to interrupt agricultural production and increases the threat for oil and gas shortages that has oil over $100/barrel despite a drop last week.

What’s ahead for this week?

In Canada, February’s Gross Domestic Product (GDP) and survey of employment, and March’s wholesale trade, and manufacturing sales will be announced.
In the U.S., announcements of quarterly earnings will include results from Coca-Cola, GE, UPS, Alphabet, Amazon, Apple, Microsoft, McDonald’s, Exxon Mobil, and Caterpillar. Durable goods and core orders, new home sales, pending home sales, goods trade deficit, and wholesale and retail inventories will be released.
Globally, Japan’s department store sales, jobless rate and monetary policy from its central bank, Germany’s GDP, business climate, consumer confidence and CPI, Eurozone GDP, CPI and money supply are scheduled for release.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

6 Tips to Help You Evaluate Your Estate Plan

2022-04-22T14:19:52Z

An Estate Plan is not just for the wealthy and consists of so much more than just having a valid Will.

A well thought out Estate Plan has many components and will require professional assistance with the ultimate goals of protecting your estate, retaining more wealth, and leaving a legacy for your family.

More importantly, having your affairs in order and defining a clear path for your executor(s) to follow will help reduce the stress, uncertainty, and conflict that often arises during the processing of a deceased’s estate. These problems are more likely to occur when the deceased has not created an Estate Plan or left little or no instructions regarding the execution of their wishes once they have passed.

So how do you avoid these issues? How do you properly plan for your estate?

The first step in creating a successful estate plan is to simply define what you would like to achieve. What are your goals and objectives? Following this simple process will help prepare you to have the right conversations, seek out the right assistance and create an estate plan that works for you.

Here are 6 tips to help you evaluate your Estate Plan:

1) Understand and prepare a detailed inventory of your assets and liabilities

Identify ownership of assets, list beneficiaries where applicable, provide values, location of assets, business structures, digital asset (social media accounts/passwords etc.) and even memberships and subscriptions

Liabilities should include debts both listed and unlisted (private or family debts)

Documents and locations: Will and POA (Power of Attorney), contracts, policies, name and addresses of advisors, professionals, executors, guardians and beneficiaries

2) Discuss and define your estate objectives

Who will be the beneficiaries of your estate? Are there beneficiaries outside of your family? Is the distribution fair? How and when do you want beneficiaries to receive their inheritance? Why is this important to you?

Are you concerned with minimizing taxation? Is Charitable giving of interest? Are there special provisions that need to be made for certain benefactors?

3) Review your objectives based on your current financial situation

Consider your current lifestyle and how you plan to live into the future; does your plan allow for you to leave the legacy you desire? Take into account asset growth vs. lifestyle spending, inflation and taxation of your estate, current legislation, business structures and insurance coverage

A comprehensive Financial Plan addresses these elements and is the backbone of any proper Estate Plan

4) Evaluate what actions are required to meet your objectives

Is there a benefit to creating a trust or utilizing a Secondary Will?

Should you be making a charitable donation now or as part of your estate? Should you donate in-kind or as cash?

Are accounts set up properly for tax efficiency and minimization?
Does it make sense to pre-plan funeral arrangements?

Ensure that the beneficiary designations in your registered accounts and insurance policies don’t conflict with any strategies outlined in your Will.

5) Work with professionals to implement the Estate Plan

It is likely that your will need to consult with multiple professionals and members of your life to fully implement your plan including your: Financial Planner, Accountant, Lawyer, Executor(s), Benefactors, Business Partners, Insurance and Estate advisors

6) Review your Estate Plan on a regular basis

Like any good plan, the plan should be evaluated and adaptable to changing circumstances over time. Regularly reviewing and revising your plan to fit your objectives or adjust for external factors is equally as important as the initial process.

If you don’t have an Estate Plan don’t wait until it is too late! Reach out to one of our advisors if you have any questions and get started today!

Have Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - April 18, 2022

2022-04-18T17:48:44Z

Last Week in the Markets: April 11th – 14th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

On Wednesday morning the Bank of Canada raised its interest rates again in 2022 to slow domestic inflation. The rate was increased by 0.5%, which is the largest rate increase in more than two decades. The target range for the deposit rate to the bank rate is now 0.75% to 1.25%.
The Bank will begin quantitative tightening on April 25th where maturing Government of Canada bonds held on its balance sheet will no longer be replaced.
“With the economy moving into excess demand and inflation persisting well above target, the Governing Council judges that interest rates will need to rise further. The policy interest rate is the Bank’s primary monetary policy instrument, and quantitative tightening will complement increases in the policy rate” ( Source )
The U.S. Consumer Price Index (CPI) rose again last month. Since February, prices for consumers rose 1.2% and in the past year prices have risen 8.5%. May 1981 was the last time the inflation rate reached this level. Like preceding months, the largest contributors were gasoline, housing, and food. Energy costs have risen 32% over the past year, and groceries are up 10% since March 2021.
The anticipation that inflation will slow is tied directly to the energy and commodity prices which have spiked due to the invasion of Ukraine and the resulting uncertainty associated with the global political response.
The Producer Price Index (PPI) for March sits at 11.2%, the highest recorded year-over-year increase ever recorded for American companies. ( Source )
The Federal Reserve will meet May 34 to review and adjust monetary policy, including interest rates and bond-buying, to slow the economic growth and temper inflation.

What’s ahead for this week?

In Canada, housing starts, existing home sales, MLS home price index, new house price index and household and mortgage credit for March will be released. March’s CPI will be announced.
In the U.S., March’s housing starts, building permits, and existing home sales will be released.
Globally, China’s GDP, retail sales, industrial production, Japan’s CPI, industrial production, machine tool orders and trade balance, Germany’s Producer Price Index, and Eurozone CPI are scheduled for release. Also, G20 finance ministers and central bank governors meet in Washington, DC.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Renting versus Buying a Home

2022-04-14T13:51:19Z

Housing prices have been climbing quickly. This is especially true in major urban centres where most Canadians live. The rate of increase for the average sale price appears to be climbing faster than people are able to save.

Some Canadians see the dream of homeownership vanishing, others wonder if the choice to own is appropriate for them. No matter the situation, objective analysis should accompany the emotional aspects of buying a home.

What You Need to Know

Regardless of the ultimate choice, affordability is an important decision criterium. No one has ever enjoyed being “house poor”, where little money is left after making your rental or mortgage payment. Based on household income and available down payment a maximum purchase price can be determined.

Every Canadian financial institution has an online calculator to determine mortgage payments. Mortgage providers employ additional analysis tools to predict whether a borrower will repay the lender based on their income, total expenses and financial history. If lenders are reluctant or refusing to provide a mortgage, perhaps the timing is not appropriate, yet.

Mortgage rates have been at the extreme low end of their range for several years as central banks around the world have attempted to revive economies through inexpensive borrowing. When interest rates are low more people and businesses can afford to borrow more. When something is on-sale people buy more, but for borrowing, you cannot decide to delay a purchase when prices rise. Payments must still be made.

Rates will rise and some homeowners may not be able to afford their new, higher payments. Before buying their first home, borrowers should ask themselves, “if mortgage rates rose by 2%, would I be still able to afford my payments?”. For example, a $400,000 loan with an additional 2% interest adds $8,000 interest charges per year, or $667 more each month.

That increase would sit atop the existing mortgage payment. The same $400,000 mortgage with a 25-year amortization and 2.25% 5-year fixed rate requires a monthly payment of $1,750. Each additional $100,000 adds another $450 per month to the payment.

Lenders typically limit housing costs to 35% of gross income, acquiring a mortgage will ultimately decide if you purchase and the price. If you earn $100,000 then your maximum housing costs are $35,000 per year. Subtracting property taxes, condo fees and utilities will determine the amount available for mortgage payments. If these costs totalled $14,000, then a maximum of $21,000 would remain for mortgage payments. $21,000 divided by 12 equals $1,750 per month, yielding your maximum mortgage of $400,000.

A down payment is also required; the more the better. At least 10%, but 20% is preferred to keep payments lower. In the examples above with a $400,000 mortgage a first-time home buyer should plan on a down payment of at least $50,000 netting a purchase price of $450,000.

An experiment to determine if home ownership is appropriate is to act as a homeowner while renting. That is, make housing costs equal 35% of gross income. Set aside exactly 35% each month, pay your rent and utilities and the rest goes directly into a savings account, an RRSP or TFSA. Set up the deposit like a monthly bill that is paid automatically. If you are able to practice this disciplined spending/saving approach you are able to live at 35%, if not habits may need to be changed or a more modest home purchase should be contemplated.

Continuing the example of $100,000 income, then $35,000 per year or $2,920 should go toward rent, utilities and savings. If rent is $1,800 and utilities are $150 set up an auto-deposit for $970 each month. At the end of one year, you will have nearly $12,000 more set aside. At the very least this test should increase the amount of your down payment.

While you are accumulating your down payment the type of investments you purchase and sheltering it from taxes is also important. First time homebuyers can withdraw funds from their RRSPs, for example. Certain conditions apply, of course.

The Bottom Line

A dangerous emotion during a period of rapid rises in house prices is desperation. “If we don’t buy now, we’ll never be able to afford a home” has led many to overextend themselves financially. After that has occurred owning again can be almost impossible.

Couple the dreams of home ownership with objective analysis to determine the best course of action. Prudently investing your down payment in a tax advantaged way is another important aspect of the home buying and ownership experience. We are happy to help with calculations, scenarios, timing, negotiation advice with lenders and investment recommendations.

Have Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - April 11, 2022

2022-04-11T18:15:45Z

Last Week in the Markets: April 4th – 8th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Canadian employment rose by 73,000 in the month of March, and the unemployment rate fell by 0.2% to 5.3%. This is the lowest unemployment rate since 1976 when similar data was first collected and analyzed. Labour Force Participation remained unchanged from February at 65.4%, total hours worked rose 1.3% and wages have risen 3.4% compared to March 2021. As restrictions are lifted the percentage of employees who work exclusively from home fell 1.8% to 20.7%. ( Source1 , Source2 )
Last Thursday afternoon, Minister of Finance, Chrystia Freeland, presented the governing Liberals latest budget. The highlights affecting Canadians’ finances include $56 Billion in new spending for national dental care, affordable housing incentives, reconciliation with Indigenous Peoples, and increased defense and climate initiatives. A surtax on large banking profits and an increase to the corporate tax rate are also included in the proposed measures. ( Source )
The Federal Reserve released the minutes from their mid-March monetary policy meeting that indicated committee members were taking a more aggressive stance against inflation than originally thought. The Federal Open Market Committee members unanimously agreed to raise the federal funds rate ¼%, and the market has priced-in an increase of about 170 basis points (1.7%) for 2022. A half-point increase, which has not occurred since 2000, is expected in the coming months, and maybe more than once. The Federal Reserve will also allow close to $100 Billion in bonds to mature each month without being replaced. The removal of this money from markets will tighten long-term borrowing and increase costs and yields. With inflation expected to exceed 8%, and the robust jobs market and GDP growth, the U.S. economy needs price stability and no longer requires monetary supports to fuel growth. ( Source )

What’s ahead for this week?

In Canada, prior to the Good Friday holiday, the Bank of Canada will announce its monetary policy update on Wednesday morning. All major Canadian banks predict a 50 basis points (½%) increase. ( Source )
In the U.S., March’s Consumer Price Index (CPI), retail sales, import prices, business inventories, industrial production, and capacity utilization are scheduled for announcement. Stock markets will be closed on Friday with bond markets trading limited.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

2022 Federal Budget Commentary

2022-04-08T14:41:36Z

On April 7, 2022, the Deputy Prime Minister and Finance Minister, the Honourable Chrystia Freeland, presented Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable , to the House of Commons.

No changes were made to personal or corporate tax rates, nor to the inclusion rate on taxable capital gains.

Some highlights include:

A. Personal Measures

Several proposals target housing affordability. A Tax-Free First Home Savings Account and a refundable Multigenerational Home Renovation Tax Credit will be introduced. Existing home-related tax credits will also be enhanced.
Residential real estate sales within a year of purchase will generally be fully taxable, not capital gains and not eligible for the principal residence exemption.

B. Business Measures

Access to the small business deduction will be enhanced for corporations with taxable capital between $10 million and $50 million.
Anti-avoidance measures targeting private corporations attempting to avoid the refundable tax regime for investment income will be introduced.
Tax benefits for flow-through shares will be enhanced for critical mineral exploration and removed for oil, gas and coal.

C. International Measures

Digital platform operators will be required to disclose details of the activities of Canadian participants in the digital economy.

D. Sales and Excise Tax

All new residential property assignment sales will be subject to GST/HST.
An excise tax regime will be introduced for vaping products.

E. Retirement Plans

The fair market value of RRSP and RRIF assets will be provided to CRA annually.

F. Charities Measures

The disbursement quota will be increased for many charities.
New rules will be introduced to allow charities to work with other organizations to fulfill their charitable objectives.

G. Previously Announced Measures

Intention to proceed with previously announced measures, such as the immediate expensing CCA provisions, the luxury tax, requirements for electronic interaction with CRA and a full review of the employment insurance system.

For further details on these highlighted topics, please read below.

A. Personal Measures

Tax-Free First Home Savings Account (FHSA)

Budget 2022 proposes to create the tax-free FHSA to help first-time home buyers save up to $40,000 for their first home. Contributions to an FHSA would be deductible (like an RRSP), and income earned in an FHSA and qualifying withdrawals from an FHSA made to purchase a first home would be non-taxable (like a TFSA).

The lifetime limit on contributions would be $40,000, subject to an annual contribution limit of $8,000. Unused annual contribution room would not be carried forward. Individuals would also be allowed to transfer funds from an RRSP to an FHSA tax-free, subject to the $40,000 lifetime and $8,000 annual contribution limits.

Withdrawals for purposes other than to purchase a first home would be taxable. However, an individual could transfer funds from an FHSA to an RRSP (at any time before the year they turn 71) or a RRIF on a non-taxable basis. Transfers would not reduce, or be limited by, the individual’s available RRSP room. Withdrawals and transfers would not replenish FHSA contribution limits.

Individuals would not be permitted to make both an FHSA withdrawal and a home buyers’ plan withdrawal in respect of the same qualifying home purchase.

If an individual has not used the funds in their FHSA for a qualifying first home purchase within 15 years of opening an FHSA, their FHSA would have to be closed. Any unused funds could be transferred into an RRSP or RRIF or would otherwise have to be withdrawn on a taxable basis.

Eligibility

Individuals eligible to open an FHSA must be at least 18 years of age and resident in Canada. In addition, they must not have lived in a home that they or their spouse owned at any time in the year the account was opened or the preceding four calendar years.

Effective Date

The government would work with financial institutions to allow individuals to open an FHSA and start contributing in 2023.

Home Buyers’ Tax Credit

First-time home buyers can obtain up to $750 in tax relief as a non-refundable tax credit by claiming this credit. Budget 2022 proposes to double the Home Buyers’ Tax Credit amount, such that tax relief of up to $1,500 can be accessed by eligible home buyers. This measure would apply to acquisitions of a qualifying home made on or after January 1, 2022.

Home Accessibility Tax Credit

The Home Accessibility Tax Credit is a non-refundable tax credit that provides relief of up to $1,500 on eligible home renovations (15% of expenses of up to $10,000) to make the dwelling more accessible to seniors or those eligible for the Disability Tax Credit that reside in the property. Budget 2022 proposes to double the annual expense limit to $20,000, such that the maximum non-refundable tax credit would be $3,000. This measure would apply to expenses incurred in the 2022 and subsequent taxation years.

Multigenerational Home Renovation Tax Credit

Budget 2022 proposes a new refundable tax credit to support constructing a secondary suite for an eligible person to live with a qualifying relation. An eligible person would be a senior (65+ years of age at the end of the tax year when the renovation was completed) or an adult (18+ years of age) eligible for the disability tax credit. A qualifying relation would be 18+ years of age and a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the eligible person (which includes the spouse or common-law partner of one of those individuals).

This tax credit would provide tax relief of 15% on up to $50,000 of eligible expenditures, providing a maximum benefit of $7,500.

Qualifying Renovation

The renovation must allow the eligible person to live with the qualifying relation by establishing a secondary unit (which must have a private entrance, kitchen, bathroom facilities and sleeping area). The secondary unit could be newly constructed or created from an existing living space that did not already meet the requirements to be a secondary unit. Relevant building permits for establishing a secondary unit must be obtained, and renovations must be completed in accordance with the laws of the jurisdiction in which the eligible dwelling is located.

One qualifying renovation would be permitted to be claimed in respect of an eligible person over their lifetime.

The credit would be claimed in the year that the qualifying renovation passes a final inspection, or proof of completion of the project according to all legal requirements of the jurisdiction in which the renovation was undertaken is otherwise obtained.

Eligible Expenses

Eligible expenses would include the cost of labour and professional services, building materials, fixtures, equipment rentals and permits. Items such as furniture and items that retain a value independent of the renovation (such as construction equipment and tools) would not qualify for the credit.

Goods or services provided by a person not dealing at arm’s length with the claimant would not be eligible unless that person is registered for GST/HST. All expenses must be supported by receipts.

Expenses would not be eligible for this credit if claimed as a medical expense tax credit and/or home accessibility tax credit.

Eligible Claimants

The credit may be claimed by the eligible person, their spouse, or a qualifying relation that resides in or intends to reside in the dwelling within 12 months of the renovation. A qualifying relation that owns the dwelling can also make a claim.

Where one or more eligible claimants claim in respect of a qualifying renovation, the total of all amounts claimed for the renovation must not exceed $50,000.

Eligible Dwelling

An eligible dwelling must be owned by the eligible person, their spouse, or a qualifying relation. Within twelve months of the renovation, the eligible person and the qualifying relation must also ordinarily reside or intend to reside in the property.

Effective Date

This measure would apply for the 2023 and subsequent taxation years, in respect of work performed and paid for and/or goods acquired on or after January 1, 2023.

Residential Property Flipping Rule

The government is concerned that taxpayers are inappropriately reporting gains on the disposition of real estate acquired for resale at a profit. In these cases, the profit is fully taxable as business income (100% taxed), and not a capital gain (50% taxed, and potentially eligible for the principal residence exemption).

Budget 2022 proposes to introduce a new rule that all gains arising from dispositions of residential property (including a rental property) that was owned for less than 12 months would be business income.

The new deeming rule would not apply if the disposition related to one of the life events listed below:

Death: due to, or in anticipation of, the death of the taxpayer or a related person;
Household addition: due to, or in anticipation of, a related person joining the taxpayer’s household or the taxpayer joining a related person’s household (e.g. birth of a child, adoption, care of an elderly parent);
Separation: due to the breakdown of a marriage or common-law partnership;
Personal safety: due to a threat to the personal safety of the taxpayer or a related person, such as the threat of domestic violence;
Disability or illness: due to a taxpayer or a related person suffering from a serious disability or illness;
Employment change: for the taxpayer or their spouse or common-law partner to work at a new location or due to an involuntary termination of employment. In the case of work at a new location, the taxpayer’s new home must be at least 40 kms closer to the new work location;
Insolvency: due to insolvency or to avoid insolvency; and
Involuntary disposition: a disposition against someone’s will, for example, due to expropriation or the destruction or condemnation of the taxpayer’s residence due to a natural or man-made disaster.

Properties held for more than 12 months, or meeting one of the exceptions noted above, would continue to generate either business income or a capital gain on the disposition, depending on whether the property was acquired for the purpose of resale at a profit (business income) or was acquired for some other purpose (capital gain). While this measure was reflected as a “personal income tax measure,” it is unclear whether the deeming rule will also apply to corporations and other taxpayers.

The measure would apply in respect of residential properties sold on or after January 1, 2023. The government indicates that there will be a consultation when the legislation is drafted.

Labour Mobility Deduction for Tradespeople

Budget 2022 proposes a deduction of up to $4,000/year to recognize certain travel and relocation expenses of workers in the construction industry.

An eligible individual would be a tradesperson or an apprentice who temporarily relocates to enable them to obtain or maintain employment under which the duties performed are temporary in a construction activity at a particular work location. Prior to the relocation, they must also ordinarily reside in Canada, and during the relocation period, at temporary lodging in Canada near that work location.

The temporary lodging must be at least 150 kms closer than the ordinary residence to the particular work location. The particular work location must be located in Canada, and the temporary relocation must be for at least 36 hours.

Eligible expenses would include reasonable amounts for:

temporary lodging for the eligible individual near the particular work location; and
transportation and meals for the individual for one round trip between the temporary lodging and where the individual ordinarily resides.

The maximum deduction would be capped at 50% of the worker’s employment income from construction activities at the particular work location in the year.

Amounts could be claimed in the tax year before or after the year they were incurred, provided they were not deductible in a prior year.

The individual’s ordinary residence must remain available to them during the period that they are in the temporary lodging.

Expenses for which the individual received non-taxable financial assistance could not be claimed. Amounts claimed under this deduction would not be eligible under the existing moving expense deduction and vice versa.

This measure would apply to the 2022 and subsequent taxation years.

Medical Expense Tax Credit (METC) for Surrogacy and Other Expenses

Budget 2022 proposes to expand access to the METC in cases where an individual relies on a surrogate or a donor to become a parent. Medical expenses paid by the taxpayer, or the taxpayer’s spouse or common-law partner, with respect to a surrogate mother or donor would be eligible for the METC, whereas previously they would generally not have been eligible. For example, expenses paid by the intended parent to a fertility clinic for an in vitro fertilization procedure with respect to a surrogate mother or for hormone medication for an ova donor would be eligible for the METC.

Budget 2022 proposes to allow reimbursements paid by the taxpayer to a patient to be eligible for the METC, provided that the reimbursement is for an expense that would generally qualify under the credit. For example, the METC could be available for reimbursements paid by the taxpayer for expenses incurred by a surrogate mother with respect to an in vitro fertilization procedure or prescription medication related to their pregnancy.

Budget 2022 also proposes to allow fees paid to fertility clinics and donor banks to obtain donor sperm or ova to be eligible under the METC. Such expenses would be eligible where the sperm or ova are acquired for use by an individual to become a parent.

All expenses claimed under the METC would be required to be incurred in Canada and in accordance with the Assisted Human Reproduction Act and associated regulations.

These measures would apply to expenses incurred in the 2022 and subsequent taxation years

Amendments to the Children’s Special Allowances Act and to the Income Tax Act

Budget 2022 proposes several amendments to ensure that the Children’s Special Allowance, the Canada Child Benefit and the Canada Workers Benefit amount for families are appropriately directed in situations involving Indigenous governing bodies. These measures would be retroactive to 2020.

Other Personal Measures

Budget 2022 also proposes a number of measures for individuals for which few details were provided, including the following:

Dental care would be funded, starting for children under age 12 in 2022, expanding to children under age 18, seniors and disabled individuals in 2023, with full implementation by 2025. Full coverage would be provided for families with under $70,000 of annual income and no coverage would be provided for families with income of $90,000 or more.
The government intends to continue working towards a universal national pharmacare program, including tabling a Canada Pharmacare bill and working to have it passed by the end of 2023.
A one-time $500 payment would be made to those facing housing affordability challenges. Timing, eligibility and delivery method are to be announced at a later date.
The Incentives for Zero-Emission Vehicles program that has offered purchase incentives of up to $5,000 for eligible vehicles since 2019 would be extended until March 2025. Eligibility would be broadened to include more vehicle models, including more vans, trucks and SUVs. Further details will be announced by Transport Canada in the coming weeks.
Budget 2022 announces the government’s commitment to examine a new alternative minimum tax regime, with details on a proposed approach to be released in the 2022 fall economic and fiscal update.

B. Business Measures

Small Business Deduction

Canadian-controlled private corporations (CCPCs) benefit from the small business deduction (SBD), a reduced corporate tax rate on active business income from the 15% general rate to 9% federally. Each province also has an SBD regime. A “business limit” of $500,000 of annual income (shared between associated corporations) limits eligibility to the SBD federally, and in all provinces except Saskatchewan, which has a $600,000 provincial business limit.

The business limit is reduced for corporations or associated groups which have “taxable capital” in excess of $10 million, with the business limit reduced by $1 for every additional $10 of taxable capital over the $10 million threshold, until it is eliminated where taxable capital equals or exceeds $15 million.

Budget 2022 proposes to reduce the business limit by $1 for every $80 of taxable capital in excess of $10 million, such that the limit will be more gradually reduced, and only eliminated where taxable capital equals or exceeds $50 million. This measure is proposed to apply for corporate taxation years beginning on or after April 7, 2022.

No changes are proposed to the parallel reduction to the business limit where adjusted aggregate investment income exceeds $50,000.

Anti-Avoidance Measures – Corporate Investment Income

In addition to being ineligible for the SBD, investment income (such as interest, royalties, rent and taxable capital gains) earned by CCPCs is subject to a significantly higher corporate tax rate of 38 2/3% (plus provincial tax which, in most provinces, results in a combined tax rate of over 50%). A similar regime (Part IV Tax) applies to portfolio dividends received by CCPCs. This is intended to result in corporate taxes similar to the top personal tax rates.

A portion of this tax is refundable when taxable dividends are paid by the corporation to its shareholders, so that the combined corporate taxes after this refund and personal tax paid by the ultimate individual shareholders is comparable to the tax that would have been paid if the investments had been made personally, rather than corporately.

As these special rules apply only to CCPCs, some planning strategies have been developed where corporations are structured to fall outside CCPC status. These include the use of corporations governed by a foreign country’s corporate legislation, or the issuance of options or voting shares to non-Canadians. A number of taxpayers who have implemented such strategies have been challenged by CRA, with appeals to be heard by the Tax Court of Canada, however such challenges are both time-consuming and costly for the government.

Budget 2022 proposes that private corporations which are not CCPCs, but are factually controlled by one or more Canadian persons, be subject to the same investment income rules as a CCPC. An anti-avoidance rule will also apply this treatment to any corporation falling outside the technical rules, where it is reasonable to consider that one or more transactions were undertaken to avoid these rules. This measure will generally apply to taxation years that end on or after April 7, 2022, with possible deferral where an arm’s length sale pursuant to a written purchase and sale agreement was entered into prior to that date.

Intergenerational Business Transfers

A complex anti-avoidance rule prevents the sale of shares of closely-held corporations by individual shareholders to related corporations from resulting in capital gains, instead causing the seller to realize dividends. In addition to attracting higher taxes than capital gains, dividends are not eligible for the lifetime capital gains exemption (LCGE).

This provision has been a source of frustration for business owners wishing to transition a family business to the next generation, denying them access to the LCGE which would have been available on a similar sale to unrelated parties. On June 29, 2021, legislation (Bill C-208) exempting sales of shares of small business corporations or family farm or fishing corporations from parents to corporations controlled by their children from this provision, allowing the realization of capital gains potentially eligible for the LCGE, was passed into law.

The government had indicated that they were concerned that this legislation could permit transfers beyond genuine intergenerational business successions to benefit from this lower tax cost, a practice commonly referred to as “surplus stripping,” and that further amendments would be made to limit these transactions to their intended purpose.

Budget 2022 reiterates the government’s intention to amend the legislation to restrict these transactions to genuine intergenerational business transfers, while continuing to facilitate legitimate business successions. It announces a consultation by the Department of Finance, with specific mention of the agriculture sector, to close on June 17, 2022. Comments can be sent to intergenerational-transfers-transfertsintergenerationnels@fin.gc.ca. The government indicated that amending legislation would be included in a bill to be tabled in the fall after the conclusion of the consultation process.

Flow-through Shares

Flow-through share agreements allow corporations to renounce or “flow through” specified expenses to investors, who can deduct the expenses in calculating their taxable income. These are common in the resource sector, where they allow certain resource pools to be claimed by investors, rather than the corporations incurring the costs. A Mineral Exploration Tax Credit equal to 15% of specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors also applies to some flow-through shares.

Increased Credit for Critical Minerals

Budget 2022 proposes to introduce a new 30% Critical Mineral Exploration Tax Credit for specified minerals, specifically copper, nickel, lithium, cobalt, graphite, rare earth elements, scandium, titanium, gallium, vanadium, tellurium, magnesium, zinc, platinum group metals and uranium. These minerals are used in the production of batteries and permanent magnets, both of which are used in zero-emission vehicles, or are necessary in the production and processing of advanced materials, clean technology, or semi-conductors. This will effectively double the credit for exploration expenditures related to such minerals.

This enhanced credit would apply to expenditures renounced under eligible flow-through share agreements entered into after April 7, 2022 and on or before March 31, 2027.

Elimination of Flow-through Shares for Oil, Gas and Coal

Budget 2022 proposes to eliminate the flow-through share regime for oil, gas and coal activities. Such expenditures would not be permitted to be renounced to share purchasers under flow-through share agreements entered into after March 31, 2023.

Other Business Measures

Several business measures proposed in Budget 2022 target specific sectors. These include the following:

Real Estate

Budget 2022 announces a federal review of housing as an asset class, including the examination of potential changes to the tax treatment of large corporate players that invest in residential real estate. Further details on the review will be released later in 2022, with potential early actions to be announced before the end of the year.
Budget 2022 announces that anti-money laundering and anti-terrorist financing requirements will be extended to all businesses conducting mortgage lending in Canada.

Green Economy

Budget 2022 proposes to launch a new purchase incentive program for medium- and heavy-duty Zero-Emission Vehicles (ZEVs). Transport Canada will work with provinces and territories to develop and harmonize regulations and to conduct safety testing for long-haul zero-emission trucks. Natural Resources Canada will expand the Green Freight Assessment Program, which will be renamed the Green Freight Program, to support assessments and retrofits of more vehicles and a greater diversity of fleet and vehicle types.
Budget 2022 announces a consultation with experts to establish an investment tax credit of up to 30%, focused on net-zero technologies, battery storage solutions and clean hydrogen. Further details will be announced in the 2022 fall economic and fiscal update.
Air-source heat pumps primarily used for space or water heating acquired and becoming available for use on or after April 7, 2022 will be eligible for inclusion in Class 43.1 or 43.2, special accelerated CCA classes for investments in specified clean energy generation and energy conservation equipment. In addition, the manufacturing of such air-source heat pumps will be included in the definition of eligible zero-emission technology manufacturing or processing activities, eligible for reduced federal tax rates (halved rates for taxation years beginning in 2022 to 2028, then gradually increased to the standard rates, with no reduction for years beginning in 2032 or later).
A refundable tax credit for the cost of purchasing and installing eligible equipment used in an eligible carbon capture, utilization and storage (CCUS) project will be implemented. Eligible expenses incurred after 2021 until 2030 would benefit from credits ranging from 37.5% to 60%, with expenditures incurred until 2040 eligible for credits at half of these rates. New capital cost allowance classes at rates of 8% and 20% are also proposed for certain CCUS equipment.

Business Investment Initiatives

Budget 2022 proposes to create the Employee Ownership Trust, a new type of trust to support employee ownership. The government will engage with stakeholders to develop rules for these trusts.
Budget 2022 proposes the Canada Growth Fund, an independent public investment vehicle that will invest using a broad suite of financial instruments, with the goal that every dollar invested will attract at least three dollars of private capital. Further details will be announced in the 2022 fall economic and fiscal update.
Encouraging Innovation
Budget 2022 announces an independent federal innovation and investment agency, with further consultation later this year. Support delivered through the innovation and investment agency is expected to enable innovation and growth within the Canadian defence sector and boost investments in Canadian defence manufacturing. Further details will be announced in the 2022 fall economic and fiscal update.
Budget 2022 announces a review of the Scientific Research and Experimental Development (SR&ED) program, to assess its effectiveness in encouraging R&D that benefits Canada, and to explore opportunities to modernize and simplify the program. As part of this review, the government will also consider whether the tax system can encourage the development and retention of intellectual property, including seeking views on the suitability of adopting a patent box regime.

Financial Sector

Budget 2022 announces the government’s intention to launch a financial sector legislative review focused on the digitalization of money and maintaining financial sector stability and security. The first phase of the review will be directed at digital currencies, including cryptocurrencies and stablecoins.
A one-time 15% tax on bank and life insurance groups, based on taxable income in excess of $1 billion for taxation years ended in 2021, would be imposed for the 2022 taxation year and payable over five years. For subsequent years, a 1.5% additional tax would apply to income of such corporate groups in excess of $100 million.
A new accounting policy requirement, IFRS 17, will require insurers to defer recognition of contract service margins (CSMs) for accounting purposes commencing on January 1, 2023. Budget 2022 proposes that this deferral will not be permitted for income tax purposes. The timing of income inclusions for CSMs for income tax purposes will be set by legislation.
Proposed anti-avoidance measures will impact certain hedging and short-selling transactions undertaken by Canadian financial institutions and registered securities dealers.

Combatting Aggressive Tax Planning

Budget 2022 proposes to provide $1.2 billion over five years for CRA to expand audits of larger entities and non-residents engaged in aggressive tax planning; increase both the investigation and prosecution of those engaged in criminal tax evasion; and to expand its educational outreach.
The General Anti-avoidance Rule (GAAR) is proposed to be amended to allow CRA to challenge transactions that affect tax attributes (e.g. asset costs, losses carried forward, paid-up capital, capital dividend account) that have not yet become relevant to the computation of tax. This specific measure overrides a 2018 Federal Court of Appeal decision that held that GAAR could only be applied when the tax attribute was utilized to reduce income taxes.

C. International Measures

Digital Platform Operators – Disclosure Requirements

The digital economy (including the sharing and gig economies, and online sellers of goods) continues to grow at a rapid pace. Participants in the digital economy often make use of digital platforms. Many tax authorities are concerned that not all participants are aware of the tax implications of their online activities. In addition, transactions occurring digitally through online platforms may not be visible to tax administrations, making it difficult for CRA to identify non-compliance.

The Organisation for Economic Co-operation and Development (OECD) has developed model rules for reporting by digital platform operators with respect to platform sellers which require the platforms to collect and report relevant information to tax administrations. The model rules provide for the sharing of information between tax administrations so that an online platform would generally need to report the information to only one jurisdiction, and that jurisdiction would then share the information with partner jurisdictions based on the residence of each person earning revenue through the platform. Jurisdictions which have announced their intention to implement such a framework include the European Union, the United Kingdom and Australia.

Budget 2022 proposes to implement the model rules in Canada. They would require reporting platform operators that provide support to reportable sellers for relevant activities to determine the jurisdiction of residence of their reportable sellers and report certain information on them. Reporting platform operators would be entities that make software that runs a platform available for the sellers to be connected to other users, or to collect compensation through the platform.

The measure would generally apply to platform operators that are resident for tax purposes in Canada, and to platform operators that are not resident in Canada or a partner jurisdiction (one that has implemented similar rules and will share data with CRA on Canadian activity) and that facilitate relevant activities by Canadian residents or with respect to rental of real property located in Canada.

Relevant activities would be sales of goods and relevant services including the following:

personal services outside of an employment relationship (e.g. transportation and delivery services, manual labour, tutoring, data manipulation and clerical, legal or accounting tasks);
rental of real property (residential or commercial; parking spaces); and
rental of means of transportation.

Reporting would not be required in respect of sellers that represent a limited compliance risk, including government entities, publicly listed entities, large providers of hotel accommodation (more than 2,000 per year in respect of a property listing) and, with respect to the sales of goods, sellers who make less than 30 sales a year for a total of not more than 2,000 euro.

Reporting platform operators would be required to provide the required disclosures to CRA by January 31 of the year following the calendar year. CRA would automatically exchange information received on sellers resident in partner jurisdictions. Likewise, CRA would receive information on Canadian sellers from partner jurisdictions. This measure would apply to calendar years beginning after 2023, with the first reporting and exchange of information expected to take place in early 2025 with respect to the 2024 calendar year.

Ban on Residential Real Estate Purchases by Non-residents

The government intends to prohibit foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada for a period of two years. This would not apply to refugees and people authorized to come to Canada while fleeing international crises, certain international students on the path to permanent residency or individuals on work permits who are residing in Canada.

Other International Measures

International Tax Reform – Base Erosion and Profit Shifting

Canada is one of 137 members of the OECD/Group of 20 (G20) Inclusive Framework on Base Erosion and Profit Shifting (the Inclusive Framework) that have joined a two-pillar plan for international tax reform agreed to on October 8, 2021. Budget 2022 reiterates Canada’s commitment to the framework, and its intention to implement the Pillar One (intended to reallocate a portion of taxing rights over the profits of the largest and most profitable multinational enterprises to market countries where their users and customers are located) and Pillar Two (intended to ensure that the profits of large multinational enterprises are subject to an effective tax rate of at least 15%, regardless of where they are earned) initiatives.

Budget 2022 sets out the government’s plans for consultation and implementation of these initiatives.

Anti-Avoidance – Interest Stripping

Interest paid from a Canadian resident to a non-arm’s length non-resident is generally subject to a 25% flat withholding tax, reduced under various tax treaties (often to either 10% or 15%; generally to nil where paid to U.S. residents). Budget 2022 proposes measures to address certain arrangements (referred to as interest coupon stripping arrangements) to ensure that this withholding tax is not avoided.

D. Sales and Excise Tax

GST/HST on Assignment Sales by Individuals

An assignment sale in respect of residential housing is a transaction in which a purchaser (an “assignor”) under an agreement of purchase and sale with a builder of a new home sells their rights and obligations under the agreement to another person (an “assignee”). An assignment sale of newly constructed (or substantially renovated) residential real estate made by an individual would generally be taxable if the individual had originally entered into the agreement of purchase and sale with the builder for the primary purpose of selling their interest in the agreement. Where there was another primary purpose, such as residing in the property, the assignment sale would generally be exempt.

To provide greater certainty on the status of assignment sales, Budget 2022 proposes to make all assignment sales in respect of newly constructed or substantially renovated residential housing taxable for GST/HST purposes. As a result, the GST/HST would apply to the total amount paid for a new home by its first occupant. Typically, the consideration for an assignment sale includes an amount attributable to a deposit that had previously been paid to the builder by the assignor. That deposit would already be subject to GST/HST when applied by the builder to the purchase price on closing. Budget 2022 proposes that the amount attributable to the deposit be excluded from the consideration for a taxable assignment sale.

The assignor in respect of a taxable assignment sale would generally be responsible for collecting the GST/HST and remitting the tax to CRA. Where an assignor is non-resident, the assignee would be required to self-assess and pay the GST/HST directly to CRA.

The amount of a new housing rebate is determined based on the total consideration payable for a newly-constructed home, which would include the consideration for a taxable assignment sale. Accordingly, these changes may affect the amount of a New Housing Rebate that may be available in respect of a new home.

This measure would apply in respect of any assignment agreement entered into on or after May 7, 2022 (one month after Budget Day).

GST/HST Health Care Rebate

Hospitals can claim an 83% rebate and charities and non-profit organizations can claim a 50% rebate of the GST (or federal component of the HST) that they pay on inputs used in their exempt supplies. The 83% hospital rebate also applies to eligible charities and non-profit organizations that provide health care services similar to those traditionally performed in hospitals.

One of the conditions to be eligible for the expanded hospital rebate is that a charity or non-profit organization must deliver the health care service with the active involvement of, or on the recommendation of, a physician, or in a geographically remote community, with the active involvement of a nurse practitioner.

Budget 2022 proposes to allow the 83% hospital rebate to a charity or non-profit organization that delivers health care service with the active involvement of, or on the recommendation of, either a physician or a nurse practitioner, irrespective of their geographical location.

This measure would generally apply to rebate claim periods ending after April 7, 2022 in respect of GST/HST paid or payable after that date.

Excise Tax on Vaping Products

Budget 2021 announced a consultation on a new excise duty on vaping products. Budget 2022 sets out a taxation framework on vaping products that include either liquid or solid vaping substances (whether or not they contain nicotine), with an equivalency of 1 ml of liquid = 1 gram of solids (excluding those already subject to the cannabis excise duty framework).

A federal excise duty rate of $1 per 2 ml, or fraction thereof, is proposed for the first 10 ml of vaping substance, and $1 per 10 ml, or fraction thereof, for volumes beyond that. If a province or territory were to choose to participate in a coordinated vaping taxation regime administered by the federal government as set out in the budget documents, an additional duty rate would be imposed in respect of dutiable vaping products intended for sale in that participating jurisdiction.

Other Excise Tax Measures

Excise Duty Framework

Budget 2022 proposes several amendments to streamline, strengthen, and adapt the cannabis excise duty framework specifically, as well as other excise regimes, including the following:

allow licensed cannabis producers to remit excise duties on a quarterly rather than monthly basis, starting from the quarter that began on April 1, 2022 where the licensee’s required excise duty remittances for the four immediately preceding fiscal quarters were less than $1M in excise duties during the four fiscal quarters;
allow CRA to approve certain contract-for-service arrangements between two licensed cannabis producers to permit the producers to:
transfer stamps, and packaged but unstamped products, between them;
stamp and enter cannabis products into the retail market that have been packaged by the other producer; and
pay the excise duty on cannabis products that were stamped by the other producer.
amend the penalty provision for lost cannabis excise stamps so that the higher penalty for losing stamps for a province or territory would only apply where the adjustment rate for that jurisdiction is greater than 0%;
apply the existing cannabis penalty provisions to situations where unlicensed parties illegally possess or purchase cannabis products, and where licensed parties illegally distribute cannabis products;
exempt holders of a Health Canada-issue Research Licence or Cannabis Drug Licence from the requirement to be licensed under the excise duty regime;
in respect of spirits, wine, tobacco and cannabis products:
add all cancellation criteria for an excise licence, other than a proactive request by a licensee to cancel its licence, to the criteria that CRA may use to suspend an excise licence;
remove cash and transferable bonds issued by the Government of Canada, and add bank drafts and Canada Post money orders, to the types of financial security that could be accepted by CRA; and
confirm the ability of CRA to carry out virtual audits and reviews of all licensees.

Except where indicated otherwise, the above proposals would be effective only on Royal Assent.

100% Canadian Wine Exemption

Wine that is produced in Canada and composed wholly of agricultural or plant product grown in Canada (i.e. 100% Canadian wine) is presently exempt from excise duties. However, this exemption was challenged at the World Trade Organization (WTO). In accordance with a settlement reached in July 2020, Budget 2022 proposes to repeal the 100% Canadian wine excise duty exemption effective on June 30, 2022.

Low-alcohol Beer

At present, wine and spirits containing no more than 0.5% alcohol by volume (ABV) are exempt from federal excise duty, however beer containing no more than 0.5% ABV is subject to duty. Budget 2022 proposes to eliminate excise duty for beer containing no more than 0.5% ABV, bringing the tax treatment of such beer into line with the treatment of wine and spirits with the same alcohol content. This measure would come into force on July 1, 2022.

E. Retirement Plans

Borrowing by Defined Benefit Pension Plans

Budget 2022 proposes to provide more borrowing flexibility to administrators of defined benefit registered pension plans (other than individual pension plans) for amounts borrowed on or after April 7, 2022.

Reporting Requirements for RRSPs and RRIFs

Budget 2022 proposes to require financial institutions to annually report to CRA the total fair market value of property held in each RRSP and RRIF at the end of the calendar year. This information would assist CRA in its risk-assessment activities regarding qualified investments held by RRSPs and RRIFs. This measure would apply to the 2023 and subsequent taxation years.

F. Charities Measures

Annual Disbursement Quota for Registered Charities

Registered charities are generally required to expend a minimum amount each year for charitable purposes, referred to as the disbursement quota (DQ). Presently, the DQ is set at 3.5% of property not used directly in charitable activities or administration.

Budget 2022 proposes to increase the DQ rate from 3.5% to 5% for the portion of property not used in charitable activities or administration that exceeds $1 million. Budget 2022 also proposes to clarify that expenditures for administration and management are not considered qualifying expenditures to satisfy a charity’s DQ.

Where a charity cannot meet its DQ, it may apply to CRA and request relief. Budget 2022 proposes to amend the existing rule such that CRA will have the discretion to reduce a charity’s DQ obligation for any particular tax year. It also proposes to allow CRA to publicly disclose information relating to such a decision to provide relief.

These measures would apply to charities in respect of their fiscal periods beginning on or after January 1, 2023.

Charitable Partnerships

Budget 2022 proposes to allow a charity to provide its resources to organizations that are not qualified donees, provided that these disbursements further the charity’s charitable purposes and the charity ensures that the funds are applied to charitable activities by the grantee.

To be considered a qualifying disbursement, the charity will need to meet mandatory accountability requirements, including, for example:

conducting a pre-grant inquiry sufficient to provide reasonable assurances that the charity’s resources will be used for the purposes set out in the written agreement, including a review of the identity, past history, practices, activities and areas of expertise of the grantee;
monitoring the grantee, which would include receiving periodic reports on the use of the charity’s resources, at least annually and taking remedial action as required; and
publicly disclosing on its annual information return information relating to grants above $5,000.

In addition, Budget 2022 proposes to require charities to, upon request by CRA, take all reasonable steps to obtain receipts, invoices, or other documentary evidence from grantees to demonstrate amounts were spent appropriately.

Finally, Budget 2022 proposes to prohibit registered charities from accepting gifts, the granting of which was expressly or implicitly conditional on making a gift to a person other than a qualified donee.

These changes would apply as of Royal Assent.

G. Previously Announced Measures

Budget 2022 confirms the government’s intention to proceed with the following previously announced tax and related measures, as modified to take into account consultations and deliberations since their release:

Legislative proposals relating to the Select Luxury Items Tax Act (a tax on certain automobiles, boats and aircrafts) released on March 11, 2022.
Legislative proposals released on February 4, 2022 in respect of the following measures:
electronic filing and certification of tax and information returns;
immediate expensing;
the Disability Tax Credit;
a technical fix related to the GST Credit top-up;
the rate reduction for zero-emission technology manufacturers;
film or video production tax credits;
postdoctoral fellowship income;
fixing contribution errors in registered pension plans;
a technical fix related to the revocation tax applicable to charities;
capital cost allowance for clean energy equipment;
enhanced reporting requirements for certain trusts;
allocation to redeemers methodology for mutual fund trusts;
mandatory disclosure rules;
avoidance of tax debts;
taxes applicable to registered investments;
audit authorities;
interest deductibility limits; and
crypto asset mining.
Legislative proposals tabled in a Notice of Ways and Means Motion on December 14, 2021 to introduce the Digital Services Tax Act.
Legislative proposals released on December 3, 2021 with respect to Climate Action Incentive payments.
The income tax measure announced in Budget 2021 with respect to Hybrid Mismatch Arrangements.
The transfer pricing consultation announced in Budget 2021.
The anti-avoidance rules consultation announced on November 30, 2020 in the Fall Economic Statement, with an expected paper for consultation over the summer of 2022, and legislative proposals tabled by the end of 2022.
The income tax measure announced on December 20, 2019 to extend the maturation period of amateur athletes trusts maturing in 2019 by one year, from eight years to nine years.
Measures confirmed in Budget 2016 relating to the GST/HST joint venture election.

Budget 2022 reiterates the government’s intention to return a portion of the proceeds from the price on pollution to small and medium-sized businesses through new federal programming in backstop jurisdictions (Alberta, Saskatchewan, Manitoba and Ontario). Budget 2022 proposes to provide funds, starting in 2022-23, to Environment and Climate Change Canada to administer direct payments to support emission-intensive, trade-exposed small and medium-sized enterprises in those jurisdictions.

Budget 2022 also reaffirms the government’s intention to revise the Employment Insurance (EI) system, including its support for experienced workers transitioning to a new career and coverage for seasonal, self-employed and gig workers. A long-term plan for the future of EI will be released after consultations conclude. As an interim measure, Budget 2022 proposes to extend previous expansions to EI coverage for seasonal workers.

IAIC Market Update - April 4, 2022

2022-04-04T17:36:16Z

Last Week in the Markets: March 28th – April 1st, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Equity markets were mixed based on a blend of positive and negative news locally and internationally. Inflation, and actions to control it, continue to be the primary driver of markets.
The price of oil fell last week, however, is up 32% this year and 62% from one year ago. Higher energy prices will filter through the economy and add to already rapid price increases.
Central banks anticipate rising inflation and will raise short term interest rates.
Canadian Gross Domestic Product rebounded in February with 0.8% growth following January’s Omicron-induced results of 0.2%. The strengthening economy coupled with jobs growth (report scheduled for Friday), and rapidly rising prices that are expected to continue to rise, forces the Bank of Canada to trim back economic growth with higher interest rates at their next meeting in mid-April. ( Source1 , Source2 )
The same economic situation exists in the U.S. (rising inflation, strong employment, GDP growth) except the next meeting of the Federal Reserve’s Open Market Committee is scheduled for early May. President Biden has taken the unusual step to release 1 million barrels of oil daily for the next six months from strategic reserves, which illustrates many inflation-fighting actions are possible.
Underlying the mixed news and data is the geopolitical situation emanating from Ukraine’s invasion by Russia. The disruption of energy shipments to western Europe, the rising cost of manufacturing inputs like electricity generated from natural gas, fiscal pressures for governments to increase military spending, and support for refugees will affect markets around the world.

What’s ahead for this week?

In Canada, February’s building permits and merchandise trade balance will be announced prior to the federal budget on Thursday at 4 pm Eastern. On Friday the February jobs report will be released.
In the U.S., factory orders, goods and services trade deficit, consumer credit and wholesale inventories for February, and Purchasing Managers Indexes from ISM and Markit for March will be released.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - March 28, 2022

2022-03-28T19:20:51Z

Last Week in the Markets: : March 21st – 25th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The continuing invasion of Ukraine and its resulting economic and energy implications, surging case counts in some areas for the Omicron BA.2 variant, and rising interest rates did not negatively impact the markets last week as may have been expected.
Overall rates are still historically low despite recent rise and promises of additional increases. Fears of recession and stagflation remain low; at least for now.
Despite the headlines, the TSX is delivering healthy year-to-date and year-over-year results that outperform the American indices. Notwithstanding the losses from U.S. equities to date in 2022, their performance over the past year (including Q1 2022) has been reasonable; especially the broad-based S&P 500. The tech-heavy NASDAQ has delivered more than 10% over the past two weeks to overcome its deep losses that 2022 has produced.

What’s ahead for this week?

In Canada, the survey of employment and Gross Domestic Product (GDP) for January, March’s Purchasing Managers Indexes (PMI) and earnings from Dollarama, Blackberry will be released.
In the U.S., February’s wholesale and retail inventories, construction spending, goods trade deficit, personal spending and personal income will be announced. PMIs from ISM and Markit for March along with consumer confidence, and the important non-farm payroll report are scheduled for release.
Globally, in a week with many varied data to be announced, Germany’s consumer confidence, retail sales, unemployment and consumer price index, Japan’s jobless rate, retail sales, PMIs and industrial production, China’s PMI, Eurozone jobless rate, consumer confidence and consumer inflation will be released. OPEC+ will meet and an EU/China summit is planned. ( Source )

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Inflation Planning: What's the risk and what can you do about it?

2022-03-25T16:07:00Z

Inflation Planning: What’s the risk and what can you do about it?

With inflation at a 30-year high of 4.8% as of December 2021*, it is likely that the Bank of Canada will raise interest rates sometime this year to help curb inflationary pressures. If borrowing costs increase, there is typically a reduction in consumer and business spending as disposable income declines, resulting in a decrease of inflationary pressures on the economy. The Bank of Canada’s target inflation is about 2%, so it stands to reason that interest rate hikes may be coming soon.

If interest rates rise, the potential impacts at a personal level could include:

Increased monthly interest payments on any variable rate debt you have, such as lines of credit or variable rate loans.

Additional risk to your monthly debt servicing costs if you have more debt now than you did a few years ago. Like many Canadians, you may have tapped into the equity of your home to fund “pandemic renovations” or other purchases.

Potential increased interest costs when your mortgage, or other fixed rate loans, renew.

A reduction in the value of your home – if the cost to buy homes increases due to rising interest rates, the real estate market may cool and house prices could drop.

Rising debt servicing costs could push highly leveraged homeowners into a situation where they may no longer be able to afford their home – and more people selling homes would put further downward pressure on property values.

A negative change in the loan-to-value ratio for any loans you have that are secured with your home, where your bank may require you to pay down principal to get back to the target ratio.

Actual inflation for most of us may be much higher than the reported figure (food, fuel, etc.). This creates a widening gap between what we make after-tax and what our expenses are.

The “value” of your savings decreases, as it will take more dollars to buy the necessities of life. Additionally, rising interest rates can have a negative impact on the value of your current equity and bond investments.

*Source: Statistics Canada / www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes

The chart below illustrates impact of higher interest rates on payments and interest costs on the Canadian average new home loan of $355,000:

Source: Average new home loan of $355,000 based on Equifax data as of June 30, 2021

Some potential actions could include:

With mortgage rates at, or near, historic lows, consider locking in for a set term, or even renewing early if the penalties aren’t an issue. This ensures your cash flow is more secure, as your mortgage costs will be known for a set number of years.

Consolidate debt. Again, knowing your monthly debt costs are fixed can give you peace of mind and allow you to plan for other costs and/or savings for your future.

Take some of the profits of your non-registered investments, or TFSA investments, and establish a cash reserve that you can use to pay down debt if interest rates rise.

If you are in the market to buy a house, or trading up to a larger home, ensure you could still carry any corresponding mortgage at a higher interest rate. This ensures you have a “built-in” buffer in your capacity to make your mortgage payments if interest rates increase.

Meet with your financial advisor and your portfolio manager to determine if any action is required to ensure inflation risk doesn’t derail your financial planning goals. Also, review your investment portfolio while you’re at it – proper asset diversification is a prudent defense against inflation and essential to ensure that your long-term returns outpace the rising cost of living.

Have Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

Protocols for External Visitors

2022-03-21T17:25:51Z

Our front Main Street doors are open for pick up and drop off or to issue payment. We are also accepting in-person meetings by appointment only.

In accordance with the direction of the Medical Officer of Health for Huron Perth Public Health, we have the following protocols:

Masks are optional; your choice will be respected.
Prior to entering the building, all external visitors must self screen and may not enter if the screening result directs them to self-isolate.
If someone is in reception when you arrive, please ensure physical distancing is maintained.
All external visitors are to use hand sanitizer on the way in and on the way out of the office.
Please avoid physical contact i.e. handshakes and maintain 2 meter physical distancing between all people who are not within your social circle.

We thank you for your support in our attempt to maintain a healthy place of business for our staff and clients.

IAIC Market Update - March 21, 2022

2022-03-21T16:23:58Z

Last Week in the Markets: : March 14th – 18th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Equities performed exceptionally well as the TSX set a new all-time high and U.S. indices made major gains. The S&P 500, Dow, and NASDAQ have Year-to-Date negative performance as many unwound their positions in 2022. Institutional investors drove last week’s gains as the unwinding slows allowing fewer sellers to be outnumbered by buyers. Also, the interest rate increase was anticipated and had been priced-in prior to the announcement. ( Source )
Canada’s Consumer Price Index (CPI) rose an additional 0.6% in February and the annualized rate of inflation is 5.7%, the highest it has been since August 1991 when it was 6.0%. Food, housing, and gasoline were major contributors. Gasoline, for example, has risen 32% since February 2021, which is prior to the effects of the invasion of Ukraine. Thankfully, the rate is well below the 7.9% U.S. inflation rate, but still well above the range that the Bank of Canada has set as its target. ( Source )
In response to U.S. inflation sitting just under 8%, the Federal Reserve increased interest rates on Wednesday afternoon. The federal funds rate increased by ¼% to a range of ¼% to ½%. This was the first increase since 2018. The Fed’s mandate is to maximize employment and manage long-term inflation at 2%. Based on the current rate of domestic inflation and international pressures the Fed “anticipates that ongoing increases in the target range will be appropriate.” As many as six interest rate increases are expected from the Fed in the coming months. ( Source )

What’s ahead for this week?

In Canada, February’s industrial products and raw materials inflation and manufacturing sales will be released. The federal government’s budget balance for January is scheduled. Provinces are reducing or ending pandemic restrictions, creating confusion for communities, students, and workers.
In the U.S., Purchasing Managers Indexes from Market and ISM representing optimism for corporate expansion, new home sales, pending home sales, and durable goods orders will be released.
Globally, Eurozone consumer confidence, Japan’s machine tool orders, PMI and department store sales, European Central Bank’s economic bulletin are scheduled for announcement.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - March 14, 2022

2022-03-14T16:27:07Z

Last Week in the Markets: March 7th – 11th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The U.S. and U.K. both introduced a ban on the importation of Russian oil with the U.S. also banning Russian natural gas. Immediately after President Biden’s announcement regarding Russian oil, the price of West Texas Intermediate (WTI) crude jumped 8% before settling back down. Despite the price spike and volatility, the price of oil fell compared to last week’s close. ( Source )
On Thursday, the latest U.S. inflation numbers were released. The Consumer Price Index (CPI) rose 0.8% in February and 7.9% over the past 12 months (before seasonal adjustment). The two most significant contributors to the highest rate of American inflation in the past 40 years were Food (7.9%), and Energy (25.6%). Excluding Food and Energy, the All-Items index, prices rose 6.4%, which is the largest 12 month change for this category of goods and services since August 1982. ( Source )
The European Central Bank met in Frankfurt and announced their latest policy to address Continental consumer inflation and, secondarily the crisis in Ukraine. Bond buying will end this summer, which will then allow for interest rate increases to trim inflation. The war in Ukraine is expected to contribute to additional inflation and lower economic growth. ( Source )
On Friday Canadian employment data was released. During the month of February 337,000 jobs were created and at month’s end the unemployment rate dropped 1.0% to 5.5%. The unemployment rate is lower than February 2020 and the total number of jobs exceeds the level of two years ago. ( Source )

What’s ahead for this week?

In Canada, January’s retail sales, construction investment, manufacturing sales and new orders, wholesale trade and new vehicle sales, February’s housing-starts and existing home sales will be announced. The Consumer Price Index for February will also be released.
In the U.S., the Producer Price Index, retail sales, import prices, housing-starts, existing home sales, industrial production and capacity utilization are scheduled. On Wednesday at 2 pm Eastern the Federal Reserve Chair, Jerome Powell, will announce the latest monetary policy.
Globally, Chinese industrial production, retail sales and fixed asset investment, Eurozone trade deficit, labour costs, industrial production and CPI will be released. Sanctions against Russia that are designed to punish Russians and pressure Putin to withdraw from Ukraine will require time to be effective.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - March 7, 2022

2022-03-07T16:25:19Z

Last Week in the Markets: February 28th – March 4th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

On Wednesday morning, the Bank of Canada (BoC) raised interest rates by ¼%. The overnight rate is now ½%, the Bank Rate is ¾% and the deposit rate is ½%. Rates had not increased since 2018. The BoC stated, “The unprovoked invasion of Ukraine by Russia is a major new source of uncertainty. Prices for oil and other commodities have risen sharply. This will add to inflation around the world. . .” ( Source )
The U.S. Federal Reserve will make a monetary policy announcement on March 16th. The BoC’s move, based on inflation, employment, and international political events, could be foreshadowing to a potential increase by the Fed.
On Friday, the Bureau of Labour Statistics released the latest non-farm payroll data. In February employment rose by 678,000 and unemployment fell slightly to 3.8%. As of the end of last month 6.3 million people remained unemployed compared with 5.7 million unemployed persons and an unemployment rate of 3.5% two years prior in February 2020. One of the major contributing factors to the shortfall in current employment is the Labor Force Participation Rate . In the U.S about 2 million less people are seeking jobs today than two years ago. In Canada, more people are employed today than 2 years ago. ( Source )
The invasion continues across Ukraine and will continue for the foreseeable future. The economic effects have already been felt. Commodity prices have surged dramatically adding more inflationary pressure to existing price increases caused by supply chain disruptions and emergence from the Covid-19 pandemic. “Price shocks will have an impact worldwide . . .” ( Source )

What’s ahead for this week?

In Canada, merchandise trade balance, goods and services trade deficit will be announced. The February employment report will be released on Friday.
In the U.S., wholesale and retail inventories and budget balance for February will be released. The latest consumer inflation numbers will be released on Thursday in a precursor to the Federal Reserve’s announcement one week later.
Globally, in addition to news from Ukraine or Russia, it will be a robust week for international economic releases. They will include Germany’s factory orders, retail sales, industrial production. China’s foreign reserves, trade surplus, and Consumer Price and Producer Price indexes; Eurozone’s GDP. Additionally, the European Central Bank will conduct and monetary policy meeting.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - February 28, 2022

2022-02-28T17:18:58Z

Last Week in the Markets: February 21st - 25th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The most significant economic news from last week was politically generated. The uncertainty and depth of sanctions against Russia caused equity markets to drop early in the week before recovering.
The disruption to supply chains is expected to delay economic recovery and prolong inflation. For example, VW is ceasing production temporarily at two assembly plants in Germany since component parts have not shipped from Ukraine. Also, the price of oil breached $100 per barrel last week.
In the Ukraine/Russia crisis, we can expect economic sanctions on Russia to continue to increase, including Russian being excluded from the global payments system, SWIFT.
Increasing supply chain interruptions and commodity prices, like oil, will complicate the inflation situation as central banks attempt to slow the rapid rise in consumer prices. In Canada and the U.S., prices have increased at their highest level since the early 1980s.

What’s ahead for this week?

In Canada, January’s industrial product price index and raw materials price index, building permits, and Purchasing Managers Indexes for February will be released. On Wednesday morning the Bank of Canada will make a monetary policy announcement.
In the U.S., January’s wholesale and retail inventories, trade deficit, construction spending, factory orders, productivity and labour costs will be released. Purchasing Managers Indexes (PMI) from ISM and Markit will be announced. February’s non-farm payrolls are scheduled for late in the week, while President Biden is scheduled to deliver a State of the Union Address on Tuesday evening.
Globally, PMIs for several countries including China, Japan and the Eurozone, consumer inflation numbers will be released for Germany and Italy for February. OPEC+ will conduct a meeting, which will address the invasion and the delivery of oil and gas from Ukraine and Russia.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

When is the Best Time to Invest?

2022-02-23T14:42:18Z

If you are looking to invest for your future with a five-, ten- or thirty-year time horizon, then now is as good a time as ever to invest.

Waiting for a pullback in stocks with a long-term time window is not going to make an enormous difference. If the market could predict a crash in stock prices, a crash would never actually occur. More importantly, missing out by sitting on the sidelines has proven to be a significant detriment to long-term returns.

Don’t time the market

Some of the best investors in history had no interest in timing the market. They understood that any “timing” benefit you might see in the short term is mitigated by time – and the risk of missing out on the best days of market performance throughout the years puts your long-term investment performance at risk.

Keys to successful investing comes down to the basics.

Have a plan . What are you investing for? What is your time horizon? Is this a one-time investment, or do you plan to keep adding to it regularly?

Understand volatility. Market values go up and down every day. Some stocks are more volatile than others. No one can predict what is going to happen tomorrow. Work with your portfolio manager to understand how your asset mix is structured to temper market fluctuations.

Engage a team of professionals. An Accountant to provide tax advice, a Portfolio Manager to manage the day-to-day investment decisions, a Financial Planner to design a plan to help you accomplish your goals and objectives, an Insurance Specialist to help you mitigate the risks in your plan and a Lawyer to ensure you have protected yourself, your wealth, and your family.

Diversify . Investing across different asset classes

and market sectors can help mitigate market

forces that only impact certain industries. Paragraph

Think long term. The price you pay today won’t have a huge impact on your long-term returns. It certainly won’t have as big of an impact as missing out on just a few of the market’s best days. Investing regularly and continuously helps to level out the ups and downs by buying into

the market during peaks and troughs, thus averaging your costs.

Expect to be wrong sometimes. You are not going to be “right” all the time. That is another reason why it is important to spread out your

investments among several companies and sectors. Inevitably you will contribute to your portfolio, and the market will go down. It is during these times that you need to stick to the plan and remember you are investing, not speculating.

When investing for the long term, it is important not to worry about buying at the absolute lowest point. A disciplined approach, a sound strategy, and the right advice will help you meet your financial goals far more than attempting to time the market. Invest early, invest often.

Have Questions?

Contact a Ward & Uptigrove Wealth Management representative

at 519-291-3040 or email info@w-u.on.ca.

IAIC Market Update - February 21, 2022

2022-02-22T19:24:05Z

Last Week in the Markets: February 14th - 18th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

All equity markets in our grid lost ground last week. Although the TSX and the Canadian dollar may not be as tightly corelated to the price of oil as they were years ago, all three experienced a decline. The TSX lost 2½% while the U.S. equity indices performed only slightly better, losing 1½ to 2%.
The most important domestic economic news was the Consumer Price Index (CPI). Canada’s inflation rate has risen to 5.1% year-over-year; the highest rate in 30 years. The continuation of heightened inflation here and in the U.S. extends the pressure on the Bank of Canada to raise interest rates, which could come as early as their next meeting on March 2 ^nd .
Canadian inflation is well below the U.S. rate, which is 7.5%. The pressure on the Federal Reserve to adjust short term interest rates higher appears to be even more intense. Predictions that the Fed will act strongly in early 2022 before slowing interest rate rises later in the year seem more likely as inflation continues to rise. The nature of inflation, which is less tied to supply-chain issues than originally contemplated by the Fed, could make a ½ point increase to the Federal Funds rate as likely as ¼ point increase.
Ahead of any interest rate manoeuvres by central banks, equity markets appear to be pricing in the eventual increase. The drop in equities indices last week could be perceived as confirmation that the Fed and Bank of Canada are poised to raise rates. The Fed’s Open Market Committee meets on March 15 ^th and 16 ^th and may have their monetary policy intentions signalled two weeks in advance by the Bank of Canada.

What’s ahead for this week?

In Canada, markets are closed on Monday for several provincial holidays. In Ontario, the Family Day observance closes the TSX. January’s wholesale trade and manufacturing sales will be released.
In the U.S., capital markets and banks are also closed on Monday. Durable goods orders, new home sales, pending home sales, Case-Shiller and FHFA home Price Indexes, and personal spending will be released along with Purchasing Managers Index (PMI) from Markit.
Globally, PMI for several areas, including the Eurozone and Japan will be announced. Germany’s business climate and consumer confidence, and the Eurozone’s economic and consumer confidence, and consumer inflation will be announced.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - February 14, 2022

2022-02-14T16:17:43Z

Last Week in the Markets: February 7th - 11th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Prior to the last week’s announcement, inflation expectations have been heavily influencing capital markets. After the announcement from the Bureau of Labour Statistics, inflation continued to dominate market influences. Year-over-year U.S. consumer inflation exceeded most analysts’ predictions and grew by 0.6% in January to 7.5%. Prices rose 0.5% in December.
Overall, U.S. consumer inflation sits at its highest level in forty years. Core inflation, which does not include the two most volatile consumer categories, food and energy, grew by 0.6% to 6.0%. Supply chain interruptions and disruptions can no longer be blamed entirely for inflation as increases have moved to housing, rents, food, and electricity, which have a services and domestic bias. Consequently, inflation will persist beyond supply chain easing and test the Federal Reserve’s already strained patience. ( Source )
Inflation is rising as Gross Domestic Product (GDP), grows at above-average speed. Real wages continue to do so as well.
All of this data increases the expectation for interest rate increases from both the Federal Reserve and the Bank of Canada. Typically, rate increases are ¼%, but speculation is increasing that the initial increase could be ½%.
These monetary policy moves will temper equities, which are already suffering in 2022 from the speculation that increasing and high inflation will lead to interest rate hikes.

What’s ahead for this week?

In Canada, December’s retail sales, wholesale trade and international securities transactions, and January’s housing starts, existing home sales, MLS Home Price Index, manufacturing sales and new orders will be released. The latest inflation numbers through the CPI will be announced on Wednesday.
In the U.S., a number of economic indicators, including retail sales, import prices, industrial production, business inventories, housing starts, and building permits, are scheduled for release.
Globally, Japan’s real GDP, trade deficit and CPI, China’s Consumer and Producer Price Indexes, Eurozone industrial production and consumer confidence will be announced.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - February 7, 2022

2022-02-07T20:50:33Z

Last Week in the Markets: January 31st - February 4th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The major North American equity indices gained 1% to 2.5%. The TSX did well, lifted by the increasing price of oil, which climbed to its highest level since 2014. Additionally, Financials, the largest sector within the TSX, is being aided by the expected increase in interest rates.
Beyond expected rate increases at the Fed and Bank of Canada, the jobs reports on both sides of the border provided more input to markets last week. The U.S. economy exceeded expectations by adding 467,000 jobs. Average hourly wages grew by 5.7% compared with one year ago, and labour-force participation rate rose sharply. Total employment is 1.7 million less than pre-pandemic levels, but demand for workers, job openings and rising wages suggests the U.S. economy has weathered the Omicron surge well. ( Source )
For workers, the Canadian economy was not as resilient. In January, 200,000 jobs were lost, with the hospitality and food service sectors suffering most severely. Thankfully, employment levels are still above pre-pandemic levels despite these losses, which should be temporary once the current restrictions begin to be lifted. ( Source )
Lastly, volatility for equities has lowered, which should provide some additional respite. ( Source )

What’s ahead for this week?

In Canada, the merchandise trade balance for December will be released as the Canadian earnings season proceeds with Thomson Reuters, Canopy Growth, Aurora Cannabis, Great-West Life, Manulife, Enbridge, Sun Life, RioCan REIT and Magna on the calendar.
In the U.S., December's consumer credit, goods and services trade balance and wholesale inventories will be announced. The most significant economic indicator scheduled for release is January’s consumer inflation on Wednesday. American companies reporting quarterly earnings include Amgen, Peloton, Pfizer, Disney, Coca-Cola, PepsiCo, Twitter and Uber.
Globally, Germany’s industrial production, trade surplus and consumer inflation, along with Japan’s machine tool orders, household spending, bank lending and current account surplus will be released.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - January 31, 2022

2022-01-31T18:34:21Z

Last Week in the Markets: January 24th - 28th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The Federal Reserve and the Bank of Canada announced monetary policy updates last Wednesday, holding their benchmark rates unchanged; both are now poised to increase interest rates in March.
Intra and inter-day volatility rose as the comments made by Fed Chair, Jerome Powell, were released. He indicated that rates could be increased without harming employment. It appears that the Fed may increase rates rapidly before slowing the number of increases as 2022 proceeds. All of the maneuvering by the Fed is to control inflation which is well above the 2% goal, sitting at 7% as of December. The Fed also plans to end its bond-buying program in March and to reduce its holdings that support long-term interest rate reduction. ( Source )
The Bank of Canada had already ended its bond-buying support last autumn. Interest rates were left unchanged due to uncertainty of the negative effects of Omicron and inflation at approximately half the U.S. rate.
As speculation about interest rates increases, expect volatility to build, as the political situation in Ukraine contributes to uncertainty as well. The VIX volatility index reached its highest level since early 2021 as analysts digested central bank guidance for their stand-pat policies and tensions between NATO and Russia rose. ( Source )

What’s ahead for this week?

In Canada, January’s employment data, December’s Industrial Price and Raw Materials Indices, building permits and November’s GDP will be released along with Markit’s Purchasing Managers Indices (PMI).
In the U.S., PMIs from Markit and ISM for manufacturing and composite and December’s construction spending and factory orders are scheduled for release. Non-farm payroll employment numbers will be announced by the Bureau of Labor Statistics.
Globally, China’s markets will be closed after Monday. Japan’s employment retail sales, services PMI, industrial production and consumer confidence, Eurozone retail GDP and retail sales, inflation and joblessness, service and composite PMIs will be released.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

12 Tips to a Brighter Future

2022-01-27T14:22:05Z

Improving your financial life doesn’t have to be a major undertaking. Sometimes it’s easier to break it down into smaller tasks. The following is a list you could easily implement over the course of a year which will put you on the road to greater financial success.

January

Create a budget and include lump sum items such as vacation and gifts. Ensure you allocate funds to savings because there is no such thing as “extra” money.

February

Top up RRSP for previous year. You can make a contribution for the previous year any time during the first 60 days of the next year. If you’re turning 71 this year you’ll need to make your RRSP contribution prior to converting your RRSP to a RRIF, December 31 at the latest.

March

Collect information required for your accountant to file your tax returns on time. Tax filing deadline for individuals in Canada is April 30th each year. If you file a US tax return the deadline is April 15 and if you administer a Trust you have until March 31 to file its return.

April

If you haven’t already, start monthly contributions to match your budget goals. You can allocate monthly contributions to TFSA, RRSP or non-registered investments based on your budget and goals.

May

Contribute to your child’s Registered Education Savings Plan. Ensure you are receiving the maximum matching grants and bonds from the government to help build the savings for your child’s post-secondary education. You can double up your contributions if you have previous year’s unused contribution room.

June

Review your employee benefits and pension to ensure you are getting the most value for your money. Determine what benefits you are entitled to and ensure you are using them if needed. When it comes to matching pension or group RRSP contributions from your employer, ensure you are receiving the maximum from your employer.

July

Review your life and disability insurance to ensure adequate coverage to protect you, your loved ones and your lifestyle.

August

Review your Wills and Powers of Attorney and update if necessary. This is also a good time to review the beneficiary designations in your TFSA, RRSP’s, employee benefits & pension and your life and disability insurance to ensure they are aligned with your estate planning.

September

Review your non-registered investment portfolio and identify gains and losses generated in the current year. Strategize with your accountant and investment professional to put yourself in the best position come tax time.

October

Consider donating to your favourite church or charity. There are many worthwhile causes looking for your hard-earned savings. Have a plan for which organizations you would like to support. You can donate cash, investments and perhaps even your time.

November

Review your financial and estate planning and modify if necessary. This is your personal road map to reach the goals that you set for yourself. Hold yourself accountable to it, but also be flexible when necessary. Your financial planning should consolidate the planning you are doing in the other eleven months of the year into a single working document. Consider measuring your achievement towards your goals by updating your net worth each year.

December

Ensure you have a plan to repay your debts. Set a “Debt Free” date and work towards achieving it. Keep in mind that with inflation on the rise, interest rates will be soon to follow.

IAIC Market Update - January 24, 2022

2022-01-24T15:51:42Z

Last Week in the Markets: January 17th - 21st, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

It was a difficult week for most Canadian investors with broad equity holdings. After Monday, when the TSX rose 180 points and U.S. markets closed for Martin Luther King Day, it was four straight days of losses. For the week, the TSX dropped more than 3%, the S&P 500 fell nearly 6%, the Dow fell over 4%, and the tech-heavy NASDAQ fell over 7%.
The most recent drivers of overall equity valuations are the continued rise of Omicron and consumer inflation that is pushing central banks to react with short term interest rate hikes sooner than expected. The Bank of Canada and the Federal Reserve have already reduced their support for long-term interest rates. Both institutions will announce their new monetary policy next week.
U.S. Treasury rates have risen as high as 1.9% from 1.5% and are causing much of the recent equity volatility. The most reliable long-term indicator of equity performance is corporate performance. The corporate profits seen in 2021 will likely not be repeated this year. However, the predicted arrival of higher interest rates in the second quarter will likely not eliminate earnings growth either. ( Source )

What’s ahead for this week?

In Canada, December’s manufacturing sales and wholesale trade will be released. On Wednesday morning the Bank of Canada will deliver its monetary policy announcement and report.
In the U.S., Purchasing Managers Indexes (PMI) will be released from Markit and December’s new home sales, goods trade deficit, wholesale and retail inventories will be announced. The Federal Reserve’s Open Market Committee will meet and announce their latest monetary policy on Wednesday afternoon as the quarterly corporate earnings season continues.
Globally, PMIs will be released for several countries including Japan, the Eurozone and U.K. Germany’s GDP and Business Climate Report from Ifo. The Eurozone consumer confidence numbers are also scheduled.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - January 18, 2022

2022-01-18T17:45:17Z

Last Week in the Markets: January 10th - 14th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The continued rise in the price of oil resulted in both the TSX and the Canadian dollar to increase in value last week. Oil has risen by more than 11% since the beginning of 2021. Energy is the second largest sector on the TSX and gains in crude prices are generally reflected in the overall index. Increasing oil prices increases the demand for Canadian dollars, which strengthens our currency against the U.S. dollar.
The big economic news from last week was the release of the latest Consumer Price Index (CPI) data. In the U.S., Year-over-Year prices have risen 7.0%; the highest inflation reading since 1982. Energy (fuel, oil, natural gas) and used vehicle prices have risen the most at 29.3% and 37.3%, respectively. Groceries nearly matched the overall rate after rising 6.5% since last December. Removing energy and food, two categories that can deliver volatile price changes, inflation for Goods has risen nearly 11%, which is also the largest increase since 1982. Services (less energy services) have risen a modest 3.7%, still far above the goal of the 2% average total inflation. ( Source )
The U.S. Federal Reserve along with the Bank of Canada is expected to deliver interest rate increases. The markets are pricing-in these increases for 2022. With U.S. unemployment falling below 4% and Canadian employment recovered to pre-pandemic levels there is little reason to actively support economic recovery while inflation exceeds desired levels. ( Source )

What’s ahead for this week?

In Canada, November’s manufacturing sales and new orders, new vehicle sales and retail sales, and December’s existing home sales, housing-starts, and new housing price index are scheduled for release. Of note, the latest consumer inflation numbers will be announced on Wednesday morning.
In the U.S., markets are closed on Monday for Martin Luther King Jr Day. Later in the week, December housing prices will be released as the quarterly corporate earnings season gathers momentum with major firms like Bank of America, Charles Schwab, State Street, PNC, Morgan Stanley, U.S. Bancorp and Goldman Sachs, UnitedHealth, Procter & Gamble, Union Pacific, American Airlines, CSX, and Netflix announcing results.
Globally, Japan’s industrial production, machine orders, trade balance and CPI, Germany’s CPI, and Eurozone CPI and consumer confidence will be released.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - January 10, 2022

2022-01-10T18:27:34Z

Last Week in the Markets: January 3rd - 7th, 2022

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

Equity indices in North America and around the world lost ground last week based on three major influences:

Covid-19 cases, hospitalizations and ICU admissions have spiked and are causing restrictions to be reintroduced.
Central banks are indicating that the temporary nature of inflation is not as brief as first believed and short-term interest rates will need to be raised.
Employment numbers in the U.S. disappointed.

The U.S. economy added 199,000 jobs in December with year-over-year wages rising 4.7% and unemployment at 3.9%. Analysts expected about 400,000 new jobs to be created last month and 3.6 million less jobs exist today than in February 2020. The Canadian economy bested jobs growth expectations during the last two months. After adding 153,000 jobs in November and 55,000 in December the rate of employment growth is exceeding the U.S. while wage-rate increases, and unemployment rates lag the American economy’s performance. ( Source 1, Source 2)
The lone “green” indicator in our grid is the price of oil that surged nearly 5% last week after OPEC+ agreed to another round of cooperative supply adjustments. The rising price of oil may continue to contribute to rising consumer and producer inflation should this trend persist.

What’s ahead for this week?

In Canada, several important announcements will occur in the next few days and weeks, GDP, inflation and the next Bank of Canada interest rate announcement.
In the U.S., wholesale inventories, business inventories, industrial production will be announced. The Senate Banking Committee will conduct nomination hearings for the Jerome Powell’s second term as Federal Reserve Chair. Lastly, and certainly not least, consumer inflation for December will be announced.
Globally, the Eurozone jobs report, trade surplus and industrial production, China’s Consumer and Producer Price Indices and trade surplus represent important indicators from significant economies.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

IAIC Market Update - January 4, 2022

2022-01-04T19:14:33Z

Last Week in the Markets: December 27th - 31st, 2021

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

The year concluded with a quiet and light trading week between Christmas and New Year’s Eve. Daily volumes of transactions were about 25% less than typical. In addition to falling volumes, the last two days of trading saw North American equities drop slightly as the Omicron variant of the coronavirus caused spikes in infections across the globe. Despite all the uncertainty attributed to Covid-19, equities performed strongly during 2021 as major indices gained 19 – 27%. This level of performance made 2021 an above-average year for stocks during the past 30 years according to Bloomberg. In 2021 equities also avoided a major correction, which often occurs when high rates of gain occur. ( Source )
Economic growth in Canada and the U.S. measured as Gross Domestic Product and employment fueled stock market gains. Economic growth (and supply manipulations from OPEC, for example) drove the price of oil 55% higher than its value at the end of 2020. Gold is the only indicator in our grid (above) that lost value in 2021.
The Canadian dollar hit a trough on December 20th but finished the year strongly and based on last week’s increase of 1½%, climbed into positive territory for the year. Adding the small gain in foreign exchange value to the TSX’s overall performance has Canadian denominated equities returning more than 22%. For all the attention that the tech-heavy NASDAQ receives for its returns, the TSX outperformed it.

What’s ahead for this week?

In Canada, the Toronto Stock Exchange was closed on Monday to observe New Year’s Day. Industrial product and raw materials price indices, purchasing managers indices, automobile sales, and December’s employment report will be announced.
In the U.S., capital markets are open for five full trading days. The economic data scheduled for release includes construction spending, factory orders, purchasing managers indices from both ISM and Markit, vehicle sales, non-farm employment and the minutes of the Federal Reserve’s last monetary policy meeting.
Globally, purchasing managers indices for goods and services in the Eurozone, Japan, China and the U.K., Germany’s unemployment, factory orders, industrial production, inflation and retail sales, and France’s consumer inflation will be announced. OPEC+ will hold another meeting to discuss production limits.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

COVID-19 Programs

2022-01-03T21:16:09Z

Ward & Uptigrove is carefully monitoring the COVID-19 situation and as new relevant details become available, we will update this page and encourage you to check back frequently.

A short summary of small business support measures and programs is listed below. Click the program links for full program details, eligibility and application information. For a full list of measures, visit Canada's COVID-19 Economic Response Plan and Ontario's Help for Businesses .

Federal Subsidies & Grants

The Federal government has aligned emergency subsidy programs to support businesses negatively impacted by the COVID-19 pandemic. The programs' eligibility, subsidy rate structure and calculation of revenues mirror each other to be simpler for affected qualifying organizations.

Our Canada Emergency Subsidies page provides more information on eligibility, revenue decline, reference periods, and subsides rates for

The Canada Recovery Hiring Program (CRHP)
The Local Lockdown Benefit
The Tourism and Hospitality Recovery Program (THRP)
The Hardest-Hit Business Recovery Program (HHBRP)
The Canada Emergency Wage Subsidy (CEWS) , ended as of October 2021, the latest date to file a claim is April 21, 2022
The Canada Emergency Rent Subsidy (CERS) , ended as of October 2021, the latest date to file a claim is April 21, 2022

Federal Credit Programs

Business Credit Availability Program (BCAP)

$40 billion in direct lending and other types of financial support available through banks and credit unions to small and medium-sized businesses as follows:

Export Development Canada (EDC) BCAP - Operating Credit and Cash-Flow Loan Guarantee
Small & Medium Businesses: Up to $6.25 million, EDC guarantees 80%
Market i.e. revenues of between $50 million to $300 million: Between $16.75 million to a maximum of $80 million, EDC guarantee 75%
Business Development Canada (BDC) BCAP - Co-Lending Term Loans for Operational Cash Flow
Small & Medium Businesses: Differing maximum finance amounts based on business revenues, up to $6.25 million
Mid-Market i.e. companies with annual revenues in excess of approximately $100 million: Ranging between $12.5 million and $60 million to businesses whose credit needs exceed what is already available through the Business Credit Availability Program and other measures.

This program is available until December 31, 2021.

Highly Affected Sectors Credit Availability Program (HASCAP) Guarantee

Low-interest loans of $25,000 to $1 million guaranteed by the Government of Canada to cover operational cash flow needs for businesses that have experienced a minimum 50% year-over-year revenue decline for at least three of the months in the eight month period prior to the application. The business can be from any sector and must have previously applied for either the Canada Emergency Wage Subsidy or the Canada Emergency Rent Subsidy. Applications open February 1st at principal financial institutions and more widely by February 15. The guarantee is available until December 31, 2021.

Provincial Measures

Ontario Business Costs Rebate Program

Eligible businesses subject to capacity limits will receive rebate payments of their property tax and energy costs, equivalent to 50% for those subject to 50% capacity limits and 100% for those required to close for indoor activities. Online applications for this program will open in mid-January 2022, with payments to eligible businesses provided retroactive to December 19, 2021.

Ontario is also waiving interest and penalties between January 1, 2022 and July 1, 2022 for most provincially administered taxes including Employer Health Tax, Beer, Wine & Spirits Taxes, Tobacco Tax, Insurance Premium Tax, Fuel Tax, International Fuel Tax Agreement, Gas Tax, Retail Sales Tax on Insurance Contracts & Benefit Plans, Mining Tax and Race Tracks Tax.

Reopening Ontario

The Roadmap to Reopen is a three-step plan to reopen the province and gradually lift public health measures. Open businesses must have a safety plan prepared, conduct screening and follow protective health protocols including wearing a mask or face covering.

On January 3, 2022 Ontario strengthened public health measures in response to Omicron by Temporarily Moving to Modified Step Two of the Roadmap to Reopen effective Wednesday, January 5, 2022 at 12:01 a.m. for at least 21 days (until January 26, 2022).

Regional Opportunities Investment Tax Credit

To encourage business investment in certain regions of the province that have lagged in employment growth in the past, a refundable corporate income tax credit for Canadian-controlled private corporations that make qualifying capital investments between $50,000 and $500,000 in eligible regions (includes Perth, Huron, Grey and Bruce) of

20% if between March 23, 2021 and January 1, 2023 to a maximum credit of $90,000
10% if between March 25, 2020 and March 22, 2021 to a maximum credit of $45,000

To qualify for the tax credit, investments must be used to acquire, construct or renovate and meet the following eligibility

commercial or industrial buildings (or other structures) that are included in capital cost allowance classes 1 or 6 for income tax purposes, and
be located in a designated region (includes Huron, Perth, Grey, Bruce).

The credit is available in the taxation year when the building/structure is available for use in your business operations.

The tax credit will be claimed with the T2 Corporation Income Tax return using a separate CRA form Schedule 570, Ontario Regional Opportunities Investment Tax Credit and entering the amount of the credit on line 472 of Schedule 5, Tax Calculation Supplementary - Corporations.

Employee Leaves, Layoffs and Supports

Paid COVID-19 Leave

Ontario Bill 284 amend the Employment Standards Act, 2000 to provide eligible employees with up to 3 days of paid emergency leave for specific absences related to COVID-19. The Worker Income Protection Benefit or Paid Infectious Disease Emergency Leave (Paid IDEL), provides workers covered under the ESA are paid their regular wages up to a maximum of $200 per day for COVID-19 related absences between April 19, 2021 and July 31, 2022. These 3 days do not have to be taken consecutively. After the Paid IDEL is exhausted, the employee would be entitled to unpaid IDEL.

Employers may be reimbursed by the Workplace Safety and Insurance Board (WSIB) by submitting a claim .

Temporary Layoff Periods Extension

The Ontario government extended the temporary Infectious Disease Emergency Leave (IDEL) leave until December 31, 2021. Under the Employment Standards Act, 2000 (ESA), this provides temporary relief from the ESA’s termination and severance provisions for employers whose operations have been shut down or otherwise curtailed by COVID-19 O. Reg. 228/20, Infectious Disease Emergency Leave (IDEL Regulation ) .

This temporary relief covers most private sector employers in Ontario and deems certain employees not to be considered on layoff but rather the IDEL retroactive to March 1st, 2020, and some actions not to be considered constructive dismissal.
Any employees on the deemed IDEL will need to be recalled by the end date, switched to a layoff of 13 weeks (or 35 weeks if benefits continued) or terminated.

For businesses that are federally regulated, the Government of Canada has made amendments to the Canada Labour Standards Regulations to temporarily extend the layoff period by up to nine months . For employees laid off prior to March 31, 2020 and up until September 30, 2020, the time is extended by nine months or to March 31, 2021 unless a later recall date was provided in a written notice at the time of the layoff.

Canada Worker Lockdown Benefit

Provide $300 a week in income support to eligible workers should they be unable to work due to a local lockdown between October 24, 2021 and May 7, 2022. Between December 19, 2021 and February 12, 2022, this benefit will also be available for those impacted by capacity restrictions of 50% or more.

Canada Recovery Caregiving Benefit (CRCB)

$500 per week for up to 44 weeks per household, for eligible Canadians unable to work because they must care for a child under the age of 12 or family member because schools, day-cares or care facilities are closed due to COVID-19 or because the child or family member is sick and/or required to quarantine. This benefit is available between September 27, 2020 and May 7, 2022.

Canada Recovery Sickness Benefit (CRSB)

$500 per week for up to six weeks, for workers who are sick or must self-isolate for reasons related to COVID-19. This benefit is available between September 27, 2020 and May 7, 2022.

Canada Recovery Benefit (CRB)

Increased the maximum number of weeks available for the CRB, by an additional 4 weeks, to a total of 54 weeks, at a rate of $300 per week, to workers who are self-employed or are not eligible for EI, to support those who have not returned to work due to COVID-19 or whose income has dropped by at least 50%. The benefit is available between September 27, 2020 and October 23, 2021. Applicants must be available and looking for work, and must accept work where it is reasonable to do so.

Personal Taxes

Canadians working from home due to the pandemic, the government will extend the simplified rules for deducting home office expenses and increase the temporary flat rate to $500 annually. These rules will apply to the 2021 and 2022 tax years. For details on the simplified rules introduced in 2020, see our previous article which will be updated as the legislation becomes available.

Any government benefits received will need to be claimed on the individual's Personal Tax Return. Based on the annual income, additional taxes could be assessed on the 2020 personal tax return.

CRSB and CRCB withhold $50 for taxes per week, CRB withholds $60 for taxes per week.
If your taxable income is $75,000 or less and you received one or more of the eligible COVID-19 benefits (CERB, CESB, CRB, CRCB, CRSB or EI), you will have until April 30, 2022 to pay your taxes without being charged interest , though you must still file on time as late-filing penalty would still apply.
If you operate a business as a sole proprietor or partnership & received CEBA, the forgivable portion is taxable in the year the loan is received so if you received this loan in 2020, you need to claim the total forgivable amount as income.
If you have repaid CERB or other COVID-19 benefits, the amount repaid should be reflected on a T4A slip. There are instances where the repayment amount has been incorrectly applied by the CRA, and if you believe this is the case, please contact us.

Canada Emergency Subsidies

2021-12-22T16:52:27Z

All Emergency Subsidy Programs have ended, effective May 2022

As of October 2021, both CEWS and CERS have ended. The latest date to file a claim with these programs is April 21, 2022. In place of these subsidies the government has more targeted subsidies for hard hit business and businesses that operate in the tourism and hospitality industries, in addition to the Hiring Program. Below is a brief summary of each with links to the government's web page, followed by details and rates for each program.

The Canada Recovery Hiring Program (CRHP) reimburses eligible employers who have experienced a revenue decline of at least 10% a portion of incremental remuneration paid to employees who were newly hired, had increased hours or increased wages in the eligible claim period.
The Local Lockdown Benefit provides businesses that face temporary new local lockdowns up to the maximum amount available through the wage and rent subsidy programs. From December 19, 2021 to February 12, 2022 it is expanded to included businesses subject to capacity restrictions and with a monthly revenue decrease of at least 25%.
The Tourism and Hospitality Recovery Program (THRP) reimburses hotels, tour operators, travel agencies, and restaurants for eligible wage and rent costs if they have a 12 month average revenue drop from March 2020 to February 2021 of at least 40%, and have a claim period revenue drop of at least 40%. In addition, more than 50% of revenue must come from tourism, hospitality, arts, entertainment, or recreation activities.
The Hardest-Hit Business Recovery Program (HHBRP) reimburses employers for eligible wage and rent costs if they have a 12 month average revenue drop from March 2020 to February 2021 of at least 50%, and have a claim period revenue drop of at least 50%.
The Canada Emergency Wage Subsidy (CEWS) reimburses eligible employers a portion of employee wages from March 15, 2020 and until October 23, 2021. The program has been expanded and extended several times, with multiple phases. It is divided into periods of four weeks each and the deadline for application is 180 days after the end of the qualifying period.
* The higher of CEWS or CRHP could be claimed for a particular qualifying period, but not both.
The Canada Emergency Rent Subsidy (CERS) subsidizes a percentage of rent and property expenses from September 27, 2020 until October 23, 2021 for qualifying organizations. It is provided directly to tenants or landlords that either have non-arm’s length rental income or mortgage interest, property tax, and insurance costs of a property owned used in an active business in Canada.
If an organization has been temporarily shut down by a mandatory public health order issued by a qualifying public health authority, an additional Lockdown Support of 25% of rent and certain property expenses could be subsidized.

Applications are made through CRA My Business Account or Represent a Client.

Ward & Uptigrove has a team focused on helping our clients with their applications. For inquiries, please contact your Accountant or info@w-u.on.ca .

Eligibility

All employers, including trusts, are eligible, with the exception of public sector entities. Amalgamated corporations will be deemed the same corporation. For the CRHP, the corporation must be a Canadian controlled private corporation (CCPC) to be eligible.

For CEWS and CRHP , eligible businesses must be registered for payroll on March 15, 2020 with CRA in order to qualify.

For CERS , eligible businesses must be registered for payroll on March 15, 2020 with CRA in order to qualify OR have a business number as of September 27, 2020. Eligible expenses for a location would include commercial rent paid or payable, property taxes, property insurance and interest on commercial mortgages for a qualifying property under agreements in writing entered into before October 9, 2020, less any subleasing revenues. If you have not paid the amounts due for your eligible expenses yet, you must attest (confirm) that these amounts will be paid within 60 days of receiving your rent subsidy payment. Eligible expenses are capped at $75,000 per location and $300,000 among affiliated entities per claim period. Payments made between non-arm’s length entities are not eligible expenses.

Revenue Decline & Reference Periods

All entities (regardless of what they ordinarily used) may elect to use the cash method or accrual method to determine their monthly revenue. Not for profit organizations and charities will be able to choose to include or exclude government funding in their revenue reduction test.

An employer will have the option to choose the greater of the percentage revenue decline in the current period and that in the previous period. The revenue excludes non-arm’s length sources, extraordinary items and amounts on account of capital.

Period 21 is the final CEWS and CERS periods. CRHP begins in Period 17 and continues until May 7, 2022.

Canada Recovery Hiring Program

Current Periods

The Canada Recovery Hiring Program (CRHP) requirements and eligibility mirror the Canada Emergency Wage Subsidy (CEWS). If an employer is eligible for the CEWS they will also be eligible for the CRHP, and can choose to apply for the program that provides the greater overall subsidy.

Incremental remuneration paid to employees who were newly hired, had increased hours or increased wages is reimbursed to employers at the following rates:

50% of the incremental remuneration paid to eligible employees between June 6, 2021 and August 28, 2021 (Periods 17 -19)
40% of the incremental remuneration paid to eligible employees between August 29, 2021 and September 25, 2021 (Period 20)
30% of the incremental remuneration paid to eligible employees between September 26, 2021 and October 23, 2021 (Period 21)
50% of the incremental remuneration paid to eligible employees between October 24, 2021 and November 20, 2021 (Period 22) and all periods until period 28 (May 7, 2022)

For the qualifying period between June 6 and July 3, 2021 (Period 17), the decline of monthly revenue would have to be greater than 0%. For later periods, the decline of monthly revenue must be greater than 10%. The incremental remuneration paid in these periods is compared to the eligible remuneration paid between March 14 and April 10, 2021 (CEWS period 14) for all CRHP periods. This is considered the baseline period.

The CRHP is calculated as follows:

Total amount paid in the claim period to eligible employees, limited to $1,129 per employee per week
Less the amount paid in the baseline period of March 14 to April 10, 2021 to eligible employees, limited to $1,129 per employee per week
Multiplied by the CRHP subsidy rate, which is 50% for periods 17 to 19, 40% for period 20, 30% for period 21 and 20% for period 22.

The Canada Revenue Agency has released an online calculator or an excel spreadsheet to assist businesses with the calculations.

Local Lockdown Program

Program to provide businesses that face temporary new local lockdowns up to the maximum amount available through the wage and rent subsidy programs. This program is being temporarily expanded from December 19, 2021 to February 12, 2022 for businesses with a monthly revenue loss of at least 25% and to include

a business has one or more locations subject to public health order that reduces its capacity by 50% or more.
a business whose activities are restricted by the public health order accounted for at least 50% of its revenue during the reference period.

Wage and Rent Subsidy Rate Structure

Tourism and Hospitality Recovery Program

Hardest-Hit Business Recovery Program

Canada Emergency Wage Subsidy

Current Periods

July 4, 2021 through October 23, 2021

Periods 18 through 21

Benefits will begin to phase out in these periods, with only employers that have a revenue decline of greater than 10%.

The rates and limits for CEWS are as follows

For furloughed employees, the rate structure would continue to be aligned with the EI benefits available and available to eligible employers until August 28, 2021. For furloughed employees, the weekly wage subsidy will be the lesser of the amount of eligible remuneration paid in respect of the week and the greater of $500 and 55% of pre-crises remuneration, up to a maximum subsidy amount of $595.

Canada Emergency Rent Subsidy

Current Periods

July 4, 2021 through October 23, 2021

Periods 11 through 14

Benefits will phase out in these periods, with only employers that have more than a 10% revenue decline eligible.

The rates and limits are as follows:

Lockdown support applies for all CERS periods at a 25% rate. To qualify for the Lockdown support, the location must have been closed or significantly reduced due to a COVID-19 related public health order for 1 week or longer.

IAIC Market Update - December 20, 2021

2021-12-20T15:56:41Z

Last Week in the Markets: December 13th - 17th, 2021

(source: Bloomberg https://www.bloomberg.com/markets , MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

It was a difficult week for investors focused on equities with major indices losing between 1% to 3%. Canadians may have suffered the smallest loss in share values, but the Canadian dollar’s 1.3% fall dropped domestic investor losses down to the level experienced for American denominated investors. Inflation and monetary policy news, particularly from the U.S., drove last week’s markets.
The Canadian annual inflation rate in November equalled the consumer price increases of October at 4.7%. The month-to-month increase dropped to 0.2% from 0.7% experience a month earlier, which is encouraging news. Unfortunately, essentials that are difficult to economise, like food, shelter, energy (including electricity, gasoline, and natural gas), led the way on price increases. On December 8th, the Bank of Canada indicated in its monetary policy announcement that interest rate increases were anticipated in 2022 to combat inflation. ( Source1 , Source2 )
In the U.S., the Federal Reserve held meetings to discuss and announce their latest monetary policy measures. With Gross Domestic Product (GDP) approaching pre-pandemic levels, unemployment lowering again and nearing 4%, real wages increasing by more than 4% and consumer inflation running at 6.8%, the Fed is compelled to act. Of its dual mandates, maximizing employment and price stability, addressing the historically high consumer price increases is the priority. Jerome Powell, Fed Chair, announced on December 15th that it will lower the bond buying program more quickly than previously announced. Bond buying lowers long-term borrowing costs. He also indicated that short term rates could be increased as many as three times in 2022. ( Source1 , Source2 , Source3 )

What’s ahead for this week?

In Canada, October’s retail sales and real Gross Domestic Product will be released in a light week for economic announcements. The TSX will close early on December 24th and will reopen on December 29th.
In the U.S., the leading indicator, personal spending and income, durable goods orders, new and existing home sales for November, are scheduled, along with third quarter Gross Domestic Product. On Friday, December 24th, U.S. markets will be closed, and will reopen on Monday, December 27th.
Globally, the data of note includes the Eurozone and German consumer confidence, Japanese department store sales, machine tool orders and Consumer Price Index, in a light week for economic releases around the world.

For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca

Year End 2021 Newsletter

2021-12-17T00:10:10Z

Accounting

Human Resources Solutions

Wealth Management

Firm News

Please Note Our Christmas Shutdown

The offices of Ward & Uptigrove will be closed from 3:00 pm on Friday, December 24th and reopening in the New Year on Monday, January 3rd.

2021 Federal Fall Economic Statement

On December 14, 2021, the 2021 federal fall economic statement was presented. No changes were announced to personal or corporate income tax rates, but the economic statement did announce the following measures:

Introduce a 25% refundable tax credit for small businesses that incur expenses for air quality improvements in qualifying locations between September 1, 2021 and December 31, 2022
Enhance the home office expense deduction
Enhance the eligible educator school supply tax credit for teachers

Small Businesses Air Quality Improvement Tax Credit (“SMAQITC”)

To encourage small businesses to invest in better ventilation and air filtration to improve indoor air quality, the Government proposes to introduce a temporary SMAQITC. The tax credit would be available to eligible entities in respect of qualifying expenditures attributable to air quality improvements in qualifying locations incurred between September 1, 2021 and December 31, 2022.

The tax credit would be refundable and have a credit rate of 25% that would apply to an eligible entity’s qualification expenditures. An eligible entity would be limited to a maximum of $10,000 in qualifying expenditures per qualifying location and a maximum of $50,000 across all qualifying locations. The limits on qualifying expenditures would need to be shared among affiliated businesses.

Qualifying expenditures would include expenses directly attributable to the purchase, installation, upgrade, or conversion of mechanical heating, ventilation and air conditioning (HVAC) systems, as well as the purchase of devices designed to filter air using high efficiency particulate air (HEPA) filters, the primary purpose of which is to increase outdoor air intake or to improve air cleaning or air filtration.

Qualifying locations would include properties used by an eligible entity primarily in the course of its ordinary commercial activities in Canada (including rental activities), excluding self-contained domestic establishments (i.e., a place of residence in which a person generally sleeps or eats).

Home Office Expenses

To continue to support Canadians working from home due to the pandemic, the government will extend the simplified rules for deducting home office expenses and increase the temporary flat rate to $500 annually. These rules will apply to the 2021 and 2022 tax years. For details on the simplified rules introduced in 2020, see our previous article which will be updated as the legislation becomes available.

Enhanced Support for Teachers

The government proposes to expand and enrich the Eligible Educator School Supply Tax Credit to allow teachers and early childhood educators to claim a refundable tax credit worth 25 per cent (up from 15 per cent) of up to $1,000, and to ensure that purchased supplies may be eligible no matter where they are used.

The government also proposes to expand the list of eligible teaching supplies to include electronic devices such as graphing calculators, digital timers, and tools for remote learning. These enhancements would take effect starting with the 2021 tax year.

What We Didn’t See in the Economic Statement

Immediate Expensing Measure from the 2021 Federal Budget

As noted in our July 23, 2021 tax alert, the 2021 federal budget announced immediate expensing of many capital asset purchases with an effective date of April 19, 2021. There is still no draft legislation for this measure and no update was provided in the economic statement.

Given the government’s delay with introducing draft legislation for this measure, our recommendation is to assume this measure won’t be enacted in making capital asset purchase decisions until such time that we see draft legislation being introduced. If draft legislation is introduced and the effective date is retroactive, we will amend the prior tax returns to file a claim for immediate expensing at such time.

Proposed Amendments to Bill C-208 – Tax Changes for Intergeneration Share Transfers

As noted in our July 29, 2021 tax alert, amendments to Bill C-208 are expected to be released soon. Any amendments to Bill C-208 will apply as of the later of November 1, 2021 and the date of publication of the final draft legislation. As we have yet to receive draft legislation, Bill C-208 and its more flexible conditions is still law. No draft legislation or update was provided with the economic statement.

We will continue to monitor these and provide relevant updates to clients via email and social media.

New Compilation Engagement Report

Replacing Notice to Reader standards

Those that manage a business and engage an accountant to prepare financial statements under what you may have previously referred to as a “Notice to Reader” engagement will have increased consultations, acknowledgement of your responsibilities and a new report attached. These strengthened requirements are due to the new Canadian Standard on Related Services (CSRS) 4200 Compilation Engagements, which is beginning for year ends ending on or after December 14, 2021.

What Changes Can You Expect in a Compilation Engagement?

The changes you can expect in a compilation engagement under this new standard can be outlined as follows:

Your Accountant will ask you whether the compiled ﬁnancial information is intended to be used by a third party (e.g., your lender) and whether the third party is in a position to request and obtain further information from you, and has agreed with you on the basis of accounting, before we accept or continue this engagement.
A discussion about the expected basis of accounting (e.g. cash accounting with components on an accrual basis). Your accountant may help you select the basis of accounting; however, the basis of accounting is still your responsibility, and you will be asked to acknowledge this responsibility. The description of the basis of accounting will also be included in your compiled financial information.
A new engagement letter that will include the objective and scope of the compilation engagement, the intended use of the ﬁnancial information, the responsibilities of the practitioner, as well as your responsibilities and acknowledgments as speciﬁed in the new standard.
A discussion of your business operations and accounting system to ensure we are performing the engagement in accordance with the new standard.
A discussion about signiﬁcant judgments that your Accountant has assisted management within the preparation of the compiled ﬁnancial information (e.g. allowance for doubtful accounts) so that management understands their impact on the compiled ﬁnancial information and accepts responsibility for them.
Your Accountant may need to ask additional questions if they believe the compiled financial information appears misleading.
You will acknowledge that you take responsibility for the final version of the financial information.

A new report will be attached to your compiled ﬁnancial information that more clearly describes your responsibilities as management, the responsibilities of the Accountant and an explanation of the limitations of a compilation engagement.

As a result of the increased consultation and documentation, it is likely that the time required and fees will increase.

Is There Assurance Provided in a Compilation Engagement?

A Compilation Engagement under the new standard does not provide any form of assurance on the compiled ﬁnancial information. To understand the scope, it is useful to illustrate the nature of various engagements as outlined in the following diagram:

When determining the type of engagement required for your organization or company, your Accountant can discuss differences between each type of engagement.

Ontario’s Not-for-Profit Corporations Act, 2010

The Ontario government has announced that the Not-for-Profit Corporations Act (ONCA), which provides a modern legislative framework for Ontario’s not-for-profit corporations (which includes registered charities that are incorporated), came into force as of October 19, 2021.

The ONCA generally applies to all Ontario corporations incorporated under an Act of the Ontario legislature that do not issue ownership shares, with limited exceptions.

The ONCA is intended to:

simplify the incorporation process, making it easier and more efficient
clarify rules for governing a corporation and increase accountability*
clarify that not-for-profit corporations can earn a “profit” through commercial activities (e.g., selling T-shirts) as long as it is reinvested to support the corporation’s not-for-profit purposes
allow some corporations to use a "review engagement" in place of an audit
enhance members’ rights and outline actions they can take if they believe directors and officers are not acting in the corporation’s best interest
give members greater access to financial records

Existing not-for-profit corporations will have a three-year transition period to make any necessary changes to their incorporating and other legal documents to bring them into conformity with ONCA. Any other requirements under the ONCA come into effect on October 18, 2021.

For full details on all governance and reporting requirements, see Ontario’s Guide to the Not-for-Profit Corporations Act, 2010 .

Accounting Engagements

The ONCA specifies thresholds for a compilation, review, or audit engagement to be performed on a corporation’s financial statements as follows:

* Approval to waive an audit or to waive both an audit and review engagement requires an extraordinary resolution , which is approval from at least 80% of the votes cast at a special members' meeting where there are enough members to take a vote or if all voting members consent in writing.

There may be additional filing and reporting requirements under other statutes such as the Corporations Information Act and the Corporations Tax Act.

The Ontario government is expected to release more information regarding the ONCA.

Proposed New Trust Reporting Information Requirements

The Federal Government has proposed legislation that significantly expands trust reporting requirements. For taxation years ending on or after December 31, 2021, trusts that are required to file a T3 Trust Income Tax and Information Return will also be required to disclose the following information for each settlor, trustee, beneficiary and person who has the ability to exert influence over trustee decisions regarding appointment of income or capital of the trust:

Name
Address
Date of Birth (in case of an individual)
Jurisdiction of Residence
Taxpayer identification number (Social insurance number, business number, etc.)

This new information schedule must be filed with the trust’s T3 return. It cannot be filed on its own.

For all existing clients, we have reviewed your situation and have reached out to you to get this information before the filing deadline of March 31, 2022. The deadline to return this information to us is December 31, 2021. If you have any questions about these new filing requirements or about the T3 return, please contact Becca Newbigging .

Regional Opportunity Investment Tax Credit (ROITC)

Canadian-controlled private corporations are now eligible to receive a 10-20% refundable tax credit if they purchase, construct or renovate a building (included in Class 1 or 6) over $50,000 and up to $500,000. The max credit available for additions in the periods below are:

March 25, 2020 – March 24, 2021 - $45,000 tax credit
March 25, 2021 – January 1, 2023 - $90,000 tax credit

This credit is available for each fiscal year in the qualifying period.

The building investment must be made in a designated region to qualify for the tax credit. The credit is issued based on the building location not the location of the corporations head office. Please note that any investment in Wellington County WILL NOT qualify for this tax credit as it is not in the designated region. A full listing of the designated regions are located on Ontario's website .

Common Questions on the Principal Residence Exemption

How long do I need to live in a residence to claim it as a principal residence and qualify for PRE?

The CRA does not specify an exact duration of time an individual or their family members must reside in a dwelling for it to qualify as a principal residence for a given year. The tax rules refer to the residence being “ordinarily inhabited” within the calendar year. A more significant issue is whether a property held for a short period will produce an income gain (not eligible for the PRE) or a capital gain (usually eligible for the PRE) when sold.

The CRA will analyze evidence, such as length of time in the dwelling, sources of income and real estate buying patterns, to establish if the dwelling is indeed a principal residence or perhaps part of a business venture, such as real estate flipping.

If the CRA challenges your claim of exemption, they’re going to look at all the facts in the scenario. This could include looking into your intention of moving in and if something happen that forced you to sell.

Can other properties, such as a cottage, be designated a principal residence and eligible for PRE?

Most properties (home or cottage, for example) can be designated a principal residence – even those seasonal residences located outside of Canada, such as in the U.S. or Caribbean – as long as the owner or their family ordinarily inhabit it during each calendar year being claimed. Only one property per year, per family (spouse or common-law partner and children under 18), can be designated a principal residence.

Although it is becoming rare now, each spouse can designate a different property as a principal residence for years before 1982. Once sold, a property that isn’t deemed a principal residence will be subject to capital gains tax for the years it was not designated. A gain may also arise if the residence is designated for some, but not all, of the years of ownership.

There is also a restriction on land size that qualifies for the PRE. Property that exceeds one-half hectare (roughly 1.2 acres) will generally not qualify for the exemption. For example, if the property is a farm, only one-half of a hectare of land plus the home would qualify for the exemption, while the remaining acreage would be subject to capital gains tax based on value appreciation. If the excess land is required for the use and enjoyment of the property, then the land that qualifies can be larger. However, CRA is very restrictive when applying this rule.

When selling one of multiple properties owned, an owner can designate it as a principal residence for all or part of the years of ownership to take the best advantage of the exemption and minimize the amount of capital gains tax paid. Generally speaking, it makes sense to designate the property that has the highest average gain per year of ownership.

Can a property that generates income be deemed a principal residence and eligible for PRE?

The mandatory income tax reporting of a principal residence sale was introduced by the CRA to increase monitoring over foreign property ownership, “quick flips” or short holdings (on properties that may not qualify for principal residence status), properties that were not “ordinarily inhabited” every year by the owner, as well as serial builders who build and occupy a property before selling it.

Property that is used primarily to generate income or that is considered inventory does not qualify for PRE. This includes property that is solely rented out on a long- or short-term basis or one where the owner occupies one unit and rents out the others.

If an owner fails to report the selling of a principal residence, they could be subject to a late-filing penalty of $100 per month, up to a maximum of $8,000, according to the CRA. In addition, if an owner doesn’t report the sale on their tax return, the exemption may be denied and therefore the owner would be taxed on the capital gains.

If you have sold a property in the tax filing year, you should speak to your Accountant to assess how best to calculate and minimize your tax.

Bill 27 Working for Workers Act

On November 30, 2021 the Ontario legislature passed Bill 27. This bill amends various Ontario statutes. The two most significant changes are to the Employment Standards Act (ESA).

These changes are the right for employees to disconnect and limit on employers to include non-compete provisions in employment and other agreements.

Right to disconnect: This amendment to the ESA affects any employer with greater than 25 employees. It will be effective in mid-2022. Employers will be required to have a written policy allowing employees to disconnect from work after hours. Disconnecting from work is defined as “not engaging in any work-related communications so as to be free from the performance of work”.
L imit on use of non-compete provisions : This amendment to the ESA would prohibit any employer from entering into an agreement with an employee that includes a non-competition agreement. There are two exceptions when a business is sold and for an executive. This change to the ESA is effective October 25, 2021.

For more details on these two important changes to the ESA please contact HRresults@w-u.on.ca .

Hiring Virtually

Prepare your questions: Be slightly more pointed in the way you ask questions. Some people are great at interviews and without in person cues, you may need to challenge them more. One solution could be to try questions that put the candidate into unique or challenging job-related scenarios. By taking the person away from a script, you can observe how they behave. If the response feels uncomfortable or evasive, dig in a little bit with follow-up questions.
Connect creatively: Spend a few minutes getting to know the candidate and choose questions that showcase their personality, why they are interested in the role and organization. You need to listen very carefully, pay attention to facial expressions and tone, ensuring it comes across as comfortable.

Given that remote work is likely here to stay for many and that virtual hiring offers access to larger talent pools, we are likely to see more, rather than less, remote recruiting going forward.

Managing a Remote Workforce

Since the beginning of the pandemic, employers have been navigating the challenges of managing remote work. Virtual work, remote work, telework and work from home have now become the “norm” for many businesses. There are benefits and challenges to remote work for both employers and employees, as well as both Human Resources and Health and Safety considerations.

Challenges:

Effective Communication
Adequate Supervision
Performance Management
Technology needs and Information Security
Employee Engagement and Collaboration
Meeting Customer Needs
Motivation and avoiding Distractions

Benefits:

Reduced Overhead for the Employer
Ability to weather the storm; business continuity in emergency situations
Reduced Absenteeism when employees are sick, during inclement weather, etc.
Increased size of the hiring pool with employees working from all over the province, country, and globe; more diverse workforce in terms of location, skills, experience, etc.
Flexible hours for employees and better work/life balance to help with employee retention
Reduced distractions from other workers
Builds trust between the employer and employee and provides more autonomy to employees

The legal considerations for remote work are typically the same as the employer and employee obligations for work performed at the employer’s premises.

Generally, all employee rights under the Employment Standards Act (ESA) still apply including wages, leaves, paid time off, etc.
The Ontario Human Rights Code applies, especially in relation to accommodation and providing a workplace free from discrimination. Discrimination can take different forms including socioeconomic and family status relating to an employee’s ability to work from home.
The Occupational Health and Safety Act may also apply to different remote work situations. The definition of workplace is broad and could include anywhere the employee performs work or acts in the course of employment. Therefore, the same general duties apply, as reasonable, to protect workers from hazards; such as ergonomic, electrical, fire, and harassment hazards.
The Workplace Safety and Insurance Act applies to all duties performed in the course of and arising out of employment. This is determined based on the type of the activity and when and where it is performed; however, the tasks being performed is the primary factor. Injuries sustained that are related to work, while working remotely, may be covered by WSIB insurance.

When the pandemic started, employers rushed to arrange alternate arrangements for staff and may not have had time to consider all of the above factors or to prepare something in writing to clarify details of the remote working arrangements. Now that remote work has been ongoing and may have become permanent, having a written policy and agreement is an important step in managing remote employees. The policy should consider:

What roles in the workplace are eligible for remote work?
Will the arrangements be fully remote, hybrid, temporary, permanent…?
What are the hours of work and the expected responsiveness to co-workers and customers?
What technology is required and what will be supplied by the employer/employee?
How will employees communicate with each other, with management, with customers?
How will management oversee performance and what does success look like?
What is the duration, time frame, right to recall the employees back to the workplace?

Employers should be clear in their expectations and employees are still required to meet those job expectations; however, flexibility and adaptability are key to successful remote work situations.

Your FIN (Financial Independence Number)

You only need two pieces of information to determine your Financial Independence Number:

Your Basic Cost of Living
Draw Down Rate

Your Basic Cost of Living is the total of your non-discretionary expenses annually. Things like housing, transportation, utilities, taxes, and healthcare to name a few. Your Draw Down Rate is the percentage of your assets you can utilize without reducing your capital. It is generally agreed upon that 4% is a reasonable and realistic Draw Down Rate for retirees.

Example

John and Jane want to know the amount of wealth that they must accumulate in order to retire comfortably based on their annual expenses of $60,000. They are comfortable with the rule-of-thumb Draw Down Rate of 4%.

Their Financial Independence Number (FIN) is easily calculated as:

FIN = Annual Expenses ÷ Draw Down Rate

= $60,000 ÷ 0.04

= $1,500,000

John and Jane’s Financial Independence Number is $1.5 Million, which is the amount of invested capital that they will need to fund their retirement and maintain their capital. Understanding this number will allow their financial advisor to assemble a plan to achieve this number, not just “earn as much as possible”.

The sooner you determine your Financial Independence Number, the sooner a plan to reach that goal can be built.

A Financial Planner can work with you to determine a savings budget and investment strategy to attain your retirement goals.

Spousal RRSPs To Reduce Taxes

Reducing Taxes Now and in Retirement

The contributor to an RRSP or a Spousal RRSP, receives the initial tax benefit. The contributor’s taxable income is reduced by the amount of the contribution. A $5,200 contribution ($100/week) reduces taxable income by $5,200 for the contributor whether it goes into their RRSP or into a Spousal RRSP.

While on-deposit, the investments are treated equally, growing tax free in an RRSP or a Spousal RRSP until the funds are withdrawn. (This assumes that the money is held in the Spousal RRSP for 3 years, otherwise any withdrawals are taxed as income for the contributor, not the spouse.)

At retirement, the household will rely on their savings in their RRSPs to generate income to cover their living expenses now that employment has ended. Both spouses in the couple would begin to withdraw from their RRSPs (or RRIFs). If there is a large discrepancy in the amounts in their RRSPs, one spouse could have a significantly higher income than the other when withdrawals are made during retirement.

As an example of the effects of balancing income without the aid of income splitting, a couple with one spouse earning $75,000 and the other at $0, will pay $11,881 in income tax in 2020. A couple with each partner earning $37,500 for a total of $75,000 will pay $9,792. A savings of more than $2,000 each year!!

As couples review their taxes each year, if spouses are in different brackets, they should consider using this strategy to lessen future taxes by having the higher income spouse contribute to a Spousal RRSP for the lower income spouse.

By the Numbers

Reminders

Low-interest loans: The current family loan rate is 1%.
Home buyers’ amount: Claim up to $5,000 of the purchase of a qualifying home, and get a non-refundable tax credit of up to $750.

Introducing Ward & Uptigrove Transactional Services

With a long term focus and over 20 years of experience, we have and continue to assist many of our clients in facilitating successful buy or sell. Our team of advisors surrounds you and can guide you through the transaction or even just provide a second opinion. We’ve established relationships with trusted business valuators, corporate commercial lawyers and lending relationship managers.

Our knowledge and reputation, along with our ability to assist in negotiating a fair deal, help the process go smoothly. Buying or selling a business should be a rewarding experience that is positive and memorable. Learn more about our Transactional Services web page or talk to your Accountant.

Ward & Uptigrove Donates to Help Offset Negative Impact of COVID-19

One Time Contributions to Selected Community Organizations

For over 60 years, Ward & Uptigrove has been a member of and given back to the community. Many charitable and community organizations have struggled to hold fundraisers and networking events this year.

In 2021, the Partners of Ward & Uptigrove selected charitable organizations for a one time, large donation. Partners have personal connections to these charities that play an active role in helping to make our community a great place to work and live. Many of these organizations have connections to our staff, clients or our community.

Supporting organizations that improve our community

Listowel Memorial Hospital Foundation $40,000 in support of their ongoing contribution towards ensuring our community has first class medical facilities.
Atwood Lions $4,600 in support of their ongoing contribution to local individuals, community groups and initiatives, such as the Atwood Lions full-sized outdoor ice rink.

Supporting organizations that help people, many with increased needs due to the COVID-19 pandemic

Ward & Uptigrove continues to also support many other organizations. Our contribution is a demonstration of our gratitude for some of the many great organizations that support individuals and our community.

Carbon Footprint Initiative

Ward & Uptigrove has joined the Carbon Footprint Initiative to champion Maitland Conversation’s goal of reducing the local carbon footprint and helping to improve the health and resiliency of the watershed to deal with the growing effects of climate change.

We’ve created a sustainability committee that has raised awareness with our staff and assisted with programs to reduce our carbon emissions including

Transitioning office lighting to LED
Remote working
Transitioning to paperless
Reducing waste, encouraging garbage free lunches

In 2022, we plan to further our commitment by investing in nature planting natural vegetation that sequesters carbon, clean up projects and fundraising initiatives.

Through the Maitland Conservation Foundation, individuals and businesses can contribute to projects that protect and enhance watershed forests, rivers and soil. To learn more, visit their website .

Staff Updates

As we reflect on 2021, our 63rd year, we recognize another year of growth and progression with our staff.

We are proud to congratulate the following staff members on their development and progression into new roles this coming year.

Partner & Principal Announcements

Agriculture Department

Progressions

Business Department

Progressions

Bookkeeping Department Progressions

Human Resources Solutions Progressions

Wealth Management Progression

Congratulations on achieving your designation!

Congratulations to a few on their retirements!

After 35 years with Ward & Uptigrove, Paul Hak is retiring from the Partnership and the firm.

We are thankful for all of Paul’s contributions to the firm and wish him all the best in his retirement!

News

2025 Year End Newsletter

Accounting

Tax Updates

Agriculture Updates

Miscellaneous Updates

Human Resources Solutions

Wealth Management

Firm News

Accounting Updates

Key Highlights from the 2025 Federal Budget

Key Highlights from the 2025 Ontario Fall Economic Update

Canada Carbon Rebate for Small Businesses

Clean Technology Investment Tax Credit (ITC)

Tax Planning – Agriculture

Farm Succession

Advance Payment Program

AgriStability Program Updates for 2025

Deadlines - AgriStability & AgriInvest

AgriStability: Deadlines for the 2025 program year

AgriInvest: Deadlines for the 2025 program year

What Documentation is Required - Preparing for Tax Season

Automatic Filings

CRA Administrative Items

Common Corporate Tax CRA Communications

Audit Shield

Snowbirds Closer Connection Filings

Reporting Changes for Employees Regarding T4/T4A

Veterinary Advisory Group Updates

HR Updates

How the 2026-2028 Immigration Levels Plan Impacts Small Business Employers

The Living Wage and Small Businesses

New Job Posting Rules for 2026

Emerging Leaders Development Program

Wealth Management Updates

Estate Planning Refresh: A Valuable Year-End Habit

Cybersecurity & Fraud Prevention During the Holiday Season ﻿

By the Numbers

Firm News

Staff Updates

Partner Announcement

Agriculture Department

Progressions

Business Department

Progressions

Admin/Operations

Progressions

Years of Service

Congratulations to the following staff members on reaching these career milestones. We thank you for your contributions and loyalty to the firm:

5 Years of Service

10 Years of Service

15 Years of Service

25 Years of Service

Welcome!

We are thrilled to welcome the following new staff members to our team since July:

Happy Holidays

from the Partners and Staff of Ward & Uptigrove

2025 Fall Federal Budget Commentary

Some highlights include:

A. Personal Measures

B. Business Measures

C. International Measures

D. Sales and Excise Measures

E. Other Measures

F. Previously Announced Measures

A. Personal Measures

Automatic Federal Benefits for Lower-Income Individuals

Temporary Personal Support Workers Tax Credit

Top-Up Tax Credit

Qualified Investments for Registered Plans - Small Businesses

Home Accessibility Tax Credit Modification

Canada Carbon Rebate Payments to Individuals - Program Wind-up

Canada Disability Benefit - One-time Supplemental Payment

B. Business Measures

Accelerated Capital Cost Allowance (CCA)

Accelerated Investment Incentive (AII) Extended

Immediate Expensing for Manufacturing and Processing Buildings

Reinstatement of Accelerated CCA for Low-Carbon Liquefied Natural Gas Facilities

Productivity-Enhancing Assets

Dividend Refund – Tiered Corporate Structures

Cybersecurity & Fraud Prevention During the Holiday Season