Tax Freedom Day – For Canadian Corporations is Today, January 30th.

Corporate Tax Freedom Day, or the day that corporations will have paid their taxes to all levels of government, is today, January 30th, 2013.  But don’t feel left out, if you are not a corporation, because Personal Tax Freedom Day is also on its way – not as quickly mind you because Corporations have the ability to make much more money, much quicker than the average employee and the Corporate tax rates are considerably smaller than personal income tax rates.

From the CRA;

• 15% on the first $43,561 of taxable income, +
• 22% on the next $43,562 of taxable income (on the portion of taxable income over $43,561 up to $87,123), +
• 26% on the next $47,931 of taxable income (on the portion of taxable income over $87,123 up to $135,054), +
• 29% of taxable income over $135,054.

Then there are the Provincial tax rates;

Provincial/territorial tax rates (combined chart)

Provinces/territories	Rate(s)
Newfoundland and Labrador	7.7% on the first $33,748 of taxable income, + 12.5% on the next $33,748, + 13.3% on the amount over $67,496
Prince Edward Island	9.8% on the first $31,984 of taxable income, + 13.8% on the next $31,985, + 16.7% on the amount over $63,969
Nova Scotia	8.79% on the first $29,590 of taxable income, + 14.95% on the next $29,590, + 16.67% on the next $33,820, + 17.5% on the next $57,000, + 21% on the amount over $150,000
New Brunswick	9.1% on the first $38,954 of taxable income, + 12.1% on the next $38,954, + 12.4% on the next $48,754, + 14.3% on the amount over $126,662
Quebec	Go to Income tax rates (Revenu Québec Web site).
Ontario	5.05% on the first $39,723 of taxable income, + 9.15% on the next $39,725, + 11.16% on the next $429,552, + 13.16 % on the amount over $509,000
Manitoba	10.8% on the first $31,000 of taxable income, + 12.75% on the next $36,000, + 17.4% on the amount over $67,000
Saskatchewan	11% on the first $42,906 of taxable income, + 13% on the next $79,683, + 15% on the amount over $122,589
Alberta	10% of taxable income
British Columbia	5.06% on the first $37,568 of taxable income, + 7.7% on the next $37,570, + 10.5% on the next $11,130, + 12.29% on the next $18,486, + 14.7% on the amount over $104,754
Yukon	7.04% on the first $43,561 of taxable income, + 9.68% on the next $43,562, + 11.44% on the next $47,931, + 12.76% on the amount over $135,054
Northwest Territories	5.9% on the first $39,453 of taxable income, + 8.6% on the next $39,455, + 12.2% on the next $49,378, + 14.05% on the amount over $128,286
Nunavut	4% on the first $41,535 of taxable income, + 7% on the next $41,536, + 9% on the next $51,983, + 11.5% on the amount over $135,054

Canadian Corporate Tax rates for 2013 are;

The basic rate of Part I tax is 38% of taxable income, 28% after federal tax abatement.

For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11%.

For the other corporations, the net tax rate is decreased as follows:

• 19% effective January 1, 2009
• 18% effective January 1, 2010
• 16.5% effective January 1, 2011
• 15% effective January 1, 2012

Provincial or territorial rates

Generally, provinces and territories have two rates of income tax – a lower rate and a higher rate.

Lower rate

The lower rate applies to the income eligible for the federal small business deduction. One component of the small business deduction is the business limit. Some provinces or territories choose to use the federal business limit. Others establish their own business limit.

Higher rate

The higher rate applies to all other income.

Provincial and territorial tax rates (except Quebec and Alberta)

The following table shows the income tax rates for provinces and territories (except Quebec and Alberta, which do not have corporation tax collection agreements with the CRA).

These rates are in effect on January 1, 2012, and may change during 2012.

Province or territory	Lower rate	Higher rate
Newfoundland and Labrador	4%	14%
Nova Scotia	4%	16%
Prince Edward Island	1%	16%
New Brunswick	4.5%	10%
Ontario	4.5%	11.5%
Manitoba	nil	12%
Saskatchewan	2%	12%
British Columbia	2.5%	10%
Yukon	4%	15%
Northwest Territories	4%	11.5%
Nunavut	4%	12%

For more information, go to Dual tax rates.

Corporations also have to pay the CRA employer share of payroll source deductions for the year for employee pay and bonuses as well as any GST/HST if they are selling more than they are purchasing and also don’t forget the dividends Corporations pay out of earning to you, your friends, neighbours, parents and grandparents.

If you read some of the mainstream, err, left-leaning media tales of Corporate Tax Freedom Day you would think that we should be taxing these evil Corporations at 50% or more because all they do is pay out insane salaries and bonuses to their CEO’s and Board or Directors while giving little back to the community or the country.

For all that, I call bullshit, and not because I agree with insane salaries, bonuses, buyouts and golden handshakes – I hate them in sports and entertainment as well – but Corporations are free to operate in whichever town, city, province or country they choose to and a raise in Corporate tax rates increases the risk that corporations will back up their belongings and flee where rates are more favourable.

So while it’s great to call out Corporations for all their flaws, it would be nice once in a while if mainstream media reported on those cities and towns left with high unemployment and no jobs because a Corporation propping up their area closed up or left for a different location.

Now there are some legitimate arguments around how accountable Canadian Corporations should be and what they do with their reserves, especially in light of the recessionary times we currently live in, and by holding on to these reserves in case the economy worsens, Corporations are keeping a nest age they hope to not have to dip in to, but this “dead money” may never see the light of day when the economy picks back up and it gets swallowed up as profits or paid out as a bonus when it should be put to work right away to invest in Canada and create jobs.

Might there be other ways to increase government revenues so that the government will need to borrow less money to finance programs – driving up the debt and deficit - possibly.  One suggestion by the head of the Canadian Labour Congress (CLC), Ken Georgetti, suggested that “the government should target tax credits to companies that invest in  machinery and increase productivity.”

With Canadian Corporate taxes are already lower than (unconfirmed) elsewhere in the G7 nations, organizations like the CLC disregard the fact that business investment had increased by 6.2% since the official start of the recession, September 15th, 2008.  If consumer confidence remains weak or if a Liberal government were to take power in Canada, look for the vultures to circle looking to pick through the remains of any and all Canadian Corporations which remain here after an increase in the Corporate Tax Rate.

Related articles

• TurboTax – What are Income Tax Rates? (turbotax.intuit.com)
• Meet Five CEOs Who Prove That Lower Corporate Taxes Don’t Equal More Hiring (thenation.com)

2013 TFSA Annual Contribution Limit Increase

saving and spending (Photo credit: 401(K) 2012)

On November 26th, 2012, The Canadian government announced that it had boosted the limit on its popular Tax-Free Savings Account (TFSA), by $500.

Beginning next year, the ceiling will be $5,500 a year.

When it introduced the savings vehicle in 2009, the government said the $5,000 limit would move in $500 increments tied to inflation. This is the first year that’s happening.

“An additional $500 in annual TFSA contribution room can have an important impact on the amount of tax-free savings an individual can earn,” the government said.

“Over a 20-year period, an individual can accumulate significantly more in TFSA savings than under the original $5,000 annual contribution limit. For example … a middle-income saver could accumulate about $2,340 more in tax savings on their investments than if the additional investment had been made in a taxable savings vehicle (unregistered account).”

The TFSA has been popular since it was introduced, though recent surveys suggest Canadians still need more education.

The latest survey by Bank of Montreal showed less than 50% of savers are putting in the maximum of $5,000 a year, though 57% say they will go to ceiling within the next five years.

But while 60% of those polled claim to be “knowledgeable” about the savings vehicle, only 44% knew the contribution limit and 37% didn’t know what TFSAs can hold, such as stocks and bonds.

See the government’s calculations, here.

For more TFSA information, please go to the CRA website, here.

Taxation Post: FATCA for Americans Living In Canada. It’s Time to Prepare.

Copied in whole, with permission, from www.intaxicating.wordpress.com.

In case you have just starting to catch wind of FATCA and you are wondering if you are going to get caught up in its web, you might find this post very useful.  I have gone to the Internal Revenue service (IRS) website and pulled out their passages on American’s living in Canada and the expectations on how they will be handled under FATCA – coming globally January 1st, 2013.

The IRS has clearly stated that “All persons born in the United States are US citizens.  This is the case regardless of the tax or immigration status of a persons parents.  Furthermore, a person born outside the United States may also be a US citizen at birth if at least one parent is a US citizen and has lived in the United States for a period of time.”

This is the link to that information from the IRS website; http://www.irs.gov/businesses/small/international/article/0,,id=244868,00.html

If you are of the belief that as an American living in Canada that you do not need to file a US tax return because you do not generate any US source income in any way, that is also incorrect;  “The IRS reminds you to report your worldwide income on your US tax return and lists the possible consequences of hiding income overseas.”

More information on consequences of hiding income overseas (including Canada) in this link.  I have broken out some key facts below; http://www.irs.gov/businesses/article/0,,id=180946,00.html

As a US citizen living in Canada, the rules for filing income, estate and gift tax returns and for paying estimated tax are generally the same whether you are living in the US or not.

Not reporting income from foreign (including Canadian) sources may be a crime.  The IRS and its international partners (including the CRA) are pursuing those who hide income or assets offshore to evade taxes.  Specially trained IRS examiners focus on aggressive international tax planning, including the abusive use of entities and structures established in foreign jurisdictions.  The goal is to ensure US citizens and residents are accurately reporting their income and paying the correct tax. 

In addition to reporting your worldwide income, you must also report on your US tax return whether you have any foreign (Canadian or international) bank or investment accounts.  The Bank Secrecy Act requires you to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if:

• You have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and
• The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

More information on foreign financial account reporting requirements is in News Release FS-2007-15, Foreign Financial Accounts Reporting Requirements and Publication 4261, Do You have a Foreign Financial Account?

This link below outlines the filing expectations for US Citizens and resident aliens abroad.  You have until June 15th to file your US tax returns each year:

http://www.irs.gov/businesses/small/international/article/0,,id=97324,00.html

Most common question I have been asked:

“I am a U.S. citizen who moved to Canada to live and work there as a Canadian permanent resident, do I pay both U.S. and Canadian Taxes?

Answer: As a U. S. citizen living in Canada you:

Are required to file annual U.S. income tax returns and may be required to file certain information returns if applicable (e.g. Form 8891, U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans; Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts; TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR)).

You must report your worldwide income on your US income tax return if you meet the minimum income filing requirements for your filing status and age.

You must contact the Canadian Government to determine whether you must file a Canadian tax return and pay Canadian taxes – unless you are already filing tax returns here in Canada, then this step is obvious.

You may be able to elect to exclude some or all of your foreign earned income, if certain requirements are met, or to claim a foreign tax credit if Canadian income taxes are paid.

Behind on your filing to the IRS, are you?

The IRS began an open-ended offshore voluntary disclosure program (OVDP) in January 2012, on the heels of strong interest in the 2011 and 2009 programs, which may end at any time.  The intent of this program is to offer people with undisclosed income from offshore accounts another opportunity to get current with their US tax returns.  The 2012 OVDP has a higher penalty rate than the previous program but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk detection by the IRS and possible criminal prosecution.

Rumour has it that in September, the IRS will be releasing some new documents (besides the final regulations) aimed at helping Canadians file their US tax returns up to date – the IRS wants the most recent 3 years and 6 years of FBAR information from Canadians.

My thoughts here are that the IRS thinks all Americans living in Canada are not paying taxes so that anyone with over $1500 owing will still be penalized.  Once these US persons provide proof of their filing of Canadian tax returns at a higher rate, then the best the IRS can get from these residents if valid certifications and by adding them to the database, another potential income source to track.

FAQ Offshore voluntary disclosure program:

http://www.irs.gov/businesses/small/international/article/0,,id=256774,00.html

So if after all this you are unsure if you need to file you might want to seek out an accountant or lawyer which a strong US presence to advise you.  Remember if you are a US person and you let your bank know, they are required under FATCA to notify the IRS.

At the very least you should prepare your US tax returns for the previous 3 years and include the Canadian taxes paid under “foreign tax paid” to see where you fall under FATCA.  Then take them to an accountant with a strong knowledge of US tax in order for them to ensure the US return is correct and have them advise you on where they feel you fall under FATCA.  From there… It’s up to you.

There is no hiding from FATCA, so prepare now and prepare for the future before the IRS gets to you first.

Was this what the IRS was thinking when they pushed FATCA forward? Doubt it.

I have been all over FATCA since March 18th, 2010 when President Obama passed the Hires Act through Congress, aimed at getting Americans working and taxing the wealthy (isn’t that what all socialist and democratic governments do?) Out of this Act comes FATCA, the Foreign Account Tax Compliance Act which is set to become law January 1st, 2013 and unlike most new taxes, FATCA changes the way taxation is administered globally.I’m going to outline why FATCA was brought in, what the US government is trying to do, and why there have been a couple of events in the past 2 weeks which have come to light which leads me to believe that this was not what the US government was thinking when they pushed the Hires Act through Congress.

So FATCA, in case you are unaware, is on its way to becoming the world’s first global tax on Americans, administered by financials institutions and non-financial entities around the world… OR else. Can the IRS do this, you ask? Apparently yes they can. Why do they need to do this you are wondering? Because US investors have been evading taxes by hiding their identities from the IRS or they have created offshore companies to hold their investments out of sight and out of reach of the IRS. The net result here is that the IRS needed to find a way to track down all these US persons who should be filing US tax returns disclosing all their worldwide income but are either not filing, nor including these items.

The estimated lost tax revenues from these US taxpayers using offshore schemes to evade US income taxes is in excess of $100 billion dollars per year. Think the US could use these funds? Yeah, I thought so too. Say hello to FATCA.

So how can the US crack down on these US persons who are hiding their funds? Well first they tried asking some foreign banks for a list of Americans who they had on their registry. That did not go over well at all. The banks said, you have a specific person you want information on, we will give you details, however the IRS didn’t know, they wanted everyone and the foreign banks we not going to give us their revenue sources. So the US government sued beginning with Switzerland. Not the best way to win friends, globally, by suing them, so the US government and the IRS them began pushing FATCA on everyone.

In a nutshell, it requires all foreign banks and foreign institutions to provide information to the IRS as soon as they find a US person on their system / in their bank. The IRS intends on using this information to locate, audit and potentially prosecute US persons who are evading the paying of their fair share of taxes. The scope of FATCA is global. The complexity of FATCA is massive.

The IRS figures through FATCA that every organization globally will opt in to FATCA and will become agents of the IRS and within 5 years will have flushed out every US person to the IRS – both those who are complying and those and those who are not (those who are not have a catchy new name: recalcitrant).

The IRS even offers a way out of FATCA if you are an US person… Just give the IRS 1/3rd of your worldwide income and renounce your US citizenship and you’re out. For good.

Recently, however, I came across two fantastic articles through my FATCA research which clearly shows me that the IRS and the US government may not have thought through the full implications of FATCA.

So here is problem number 1, in a great article from Bloomberg;

http://www.bloomberg.com/news/2012-05-08/u-s-millionaires-told-go-away-as-tax-evasion-rule-looms.html. This article outlines the international response to FATCA as the deadline to sign up with the IRS gets closer and closer. Instead of gearing up systems to flush out these US investors who have been hiding millions and millions of dollars (the FATCATs), these foreign financial institutions (FFI’s) and non-financial foreign entities (NFFE’s) are going through their foreign policies to find ways to instead remove Americans from their business. The costs associated with complying with FATCA outweighs the benefit of US monies. Oh oh.

Does the IRS and US government really want to prohibit US persons from investing outside of the US?

Problem number 2 came recently when Brazilian-born Eduardo Saverin, the billionaire Facebook co-founder, renounced his US citizenship he gained as a teenager in advance of the company’s impending IPO and moved to Singapore to avoid paying capital gains taxes on his approximately $3 billion stake in Facebook.

This is FATCA response #2. Renounce your citizenship and you’re out. So instead of staying in the US and paying taxes, the very rich do not appreciate carrying the taxation burden for a tax and spend government and they take their wealth to another country where it will be appreciated.

Caught red-faced the US government needed to respond so they looked to do to Saverin what they did to the foreign banks who had US persons on their registry. They threatened to sue. Then they changed the law. The US senate introduced a bill under which any expatriate with either a net worth of $2 million, or an average income tax liability of at least $148,000, will be automatically presumed to be leaving the country for tax purposes — enabling the IRS to impose a tax on any investment gains that person makes in the future. Crazy. Greedy.

Apparently Saverin filed to give up his US citizenship in January of 2011, but the news didn’t surface until the federal government released the information in a routine report. Saverin may be barred from re-entering the US if authorities decide he left the country for tax reasons because you don’t want a super-rich guy coming into your country and buying things! That will show him.

Singapore doesn’t have a capital gains tax. It does tax income earned in that nation, as well as “certain foreign- sourced income.” Saverin won’t escape all US taxes because Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from stock holdings.

Saverin maintains that his renunciation of American citizenship, which actually took place last September, wasn’t a ploy to skip out on American taxes, but rather an attempt to free himself from FATCA, which he described as a burdensome restrictions on American investors abroad. US citizens are severely restricted as to what they can invest in and where they can maintain accounts. Many foreign funds and banks won’t accept Americans so it was for financial reasons and not tax related.

It’s true that FATCA is making life more difficult for US persons, including the IRS’ global reach (many countries tax based on residency); foreign bank account reporting rules; and FATCA. As a result of all the regulations, some foreign banks are dumping more U.S. customers.

Saverin is hardly the only one taking this particular route to big tax savings. The number of those renouncing US citizenship stands at around 1,800 last year.

While I cannot see the US government pulling back on FATCA I think they need to look again at what they are trying to accomplish and how they plan on getting there before all their high-income earners not in the US disappear from the radar within 5-10 years of FATCA being in force. So the tax pool will grow, then diminish and the IRS will be looking for newer ways to increase tax revenues.

Related articles

• FATCA Fallout: This was NOT what the IRS intended with the upcoming FATCA Regulations (intaxicating.wordpress.com)

Thursday Thirteen – Ontario Election Edition

Hey, an Ontario election is coming and while the media is predicting a Conservative majority (YAY) and have to come clean that I actually like Dalton McGuinty. He looks and talks like a leader. His policies… Not so great, however. He came in as Premier in a Liberal landslide in a province that only sees (saw) Liberal red and loved the fact that he ran the Daily Bread Food Bank or something like that. At the time I’m sure I made some sort of comment about electing a leader who spends their career taking from the rich and giving to the less fortunate. That got us Mayor David Miller and tons of taxes and it got us 7 years of scandal / high taxes and disrespect for the money you and I give in taxes to the province.
So this week’s Thursday Thirteen are the 13 things that will cause the defeat of the Ontario Liberal Party and get Dalton on the road to an awesome pension…

1. The HST – I was at the Canadian Tax Federation annual meeting and the lunch time speaker was Finance Minister Dwight Duncan and he explained to the group of us that even in a recession bringing in the HST Was necessary to keep Ontario competitive. I didn’t understand his motive then and I still don’t understand it now. Minister Duncan also said something to the effect of “no other party has the guts” to merge the GST and PST but he did. Errr, okay. Thanks Mr. Duncan. The HST added additional taxes to such items as Cigarettes, fast food and which was good, but there were way too many bad, such as home heating costs, gas, electricity, new homes (over $400,000 – after June 30, 2010 which was why we closed June 29th, 2010 on our new house), airfare, TTC / Go Transit / Via services, real estate agent commissions.

2. The Delisting of OHIP Covered Necessary Health Services – When McGuinty’s Liberals promised not to decrease any health services covered by OHIP, and not to raise taxes, some people bought in to it and others, like myself, raised their eyebrows in skepticism, McGuinty did not disappoint and did both by implementing the Ontario Health Premium (recall that “fee” we have to pay each year to the doctor) and the delisting coverage of Optometry, Chiropractic and Physiotherapy Services for Ontarians.

3. The Ontario Health Premium – Mentioned above, this “fee” turned out to be the highest tax increase in Ontario’s history, and it was implemented not too long after McGuinty’s Liberals took power in 2003.  I even remember him signing a contract with the Canadian Taxpayers Federation – because I was working at the CRA at the time - to not increase taxes).

4. eHealth - This program never got off the ground and cost Ontario taxpayers billions of dollars and opened our eyes to the notion of sole-sourcing and untendered contracts and how to get the best price sometimes you have to get quotes for other service providers than to Liberal friends.  Consultants were hired and even they spent money like there was no tomorrow, billing Ontarians hundreds of thousands of dollars per year while having the balls to expense a chocolate bar or a Tim Horton’s coffee.  Shame.

5. The Tire “fee” – Just another “tax” that the Liberals brought in while in power.

6. I don’t blame just the Ontario Liberals for this one, I also blame the Federal Liberal party (or what’s left of it) but when the provincial HST merged with the federal GST, instead of firing all the provincial collectors, the Liberals thought it would be a good idea to given each collector a “severance package” of $45,000 each, then given them a job with the HST department. 

7. Caledonia – Still a hotbed of criminal activity where Natives and citizens are battling for space and peace and quiet.  Last time I heard from Caledonia, militant natives had blockaded the street and neither Police or RCMP were allowed to go in and break it up.  Dalton… Everyone has right here and the people of Caledonia deserve to live in peace and quiet.  Instead you turned your back on them instead of making tough decisions.

8. Under the Liberal party, University fees in Ontario have skyrocketed to the highest in Canada.

9. Don’t even talk about auto insurance in Ontario under the Liberals.  I remember the Liberals promising to reduce auto insurance rates by 10% to be fair to families, but you know what happened here… Insurance rates in Ontario have skyrocketed.

10. The Eco-Fee - You may not have heard much about this “fee / tax” because the Liberals snuck it in with the HST but this fee was supposed to cover the cost of disposing of items that needed to be recycled but instead it never got off the ground and has cost tax payers a ton of money.

11. Let’s look at the next few items as groups relating to green initiatives; Smart meters – time of use rates, Wind turbines, hydro rates. All colossal failures. Smart meters work for my family because we do our laundry, use the dishwasher, etc. after 7pm to get the lowest rate and we have seen the benefit but from what I understand there are some people, like seniors who cannot wait for the reduced rates and them – on fixed incomes – have their energy rates go up (and HST on it too). Wind turbines, on the other hand, were an epic failure. There were grants given out for them that were much higher than the expected rate of return, they are unsafe and noisy.

12. The Federal Liberal Party was decimated. Ontario is next. The Conservatives care about your money and the NDP are just plain entertaining. That leaves no room for the Libs… Well, that and former Ontario Premier Bob Rae is their interim leader for the next 2 years. I shudder when I think about how bad the province was after Bob was forced out.

13. Sheer arrogance. I’ve heard the moniker “Teflon Dalton” go by and I think he actually believes he is unbeatable… I think the Federal Liberals felt that way too as did the Liberal who ran for mayor, George Smitherman.  Their time is up.  Time for a change.

Some blog updates

I’ve made some blog updates while taking a break from all the taxation work I’ve been doing night and day since December 1st.

Slowly but surely I have updated all my blogroll so if you are looking for a good read, check out any of the links. They are all great.

I’ve changed my layout, so for those of you who read me in a blog reader or through Facebook, come on by the URL and see the changes.

In this period of lack of creativity, you may want to check out my twitter feed which is on this blog on the right side, or you can follow me @urbandaddyblog

Also this time of year I tend to spend more time on my tax blog; http://www.intaxicating.wordpress.com / http://www.intaxicating.ca as I spend a lot of time, this time of year, answering technical tax questions and in researching the answers, I put all that information on up on my blog for future reference.

So if you think of any other blogs that I might be interested in, please post a comment with that information and thank you again for dropping by.

Where are the Rob Ford haters now?

As 2011 rolls along (project 365, as someone called it) I’m wondering where all the Rob Ford haters are right now. They sure have been quiet since the kerfuffle over Don Cherry calling them “pinkos”. I hope they were not actually offended?!?

I gather they are quiet because since Ford took power he has;

Made the TTC an essential service.
Put Councillor (future mayor and my old City Councillor) Karen Stintz in charge of the TTC
Removed the $60.00 “fee” (I prefer to call it a tax) on registering a vehicle in Toronto
Moving to remove the Land Transfer Tax
Announced he is moving to remove the bag tax of $0.05 for plastic bags purchased in Toronto (if council wants to)
Stopped sending our garbage to Michigan.
Cut Councillors expense accounts from $52,000 a year to $30,000 a year(the taxpayers money councillors spend on stuff)

And he announced that he is not anti-bike and will be unveiling more and safer bike routes for the biking community in Toronto.
He is not done considering a light-rail / subway for Eglinton connecting Scarborough to the airport
and his resolution for 2011 is to lose sme weight.

Not bad.
Saving us taxpayers some money and removing stupid hidden taxes put in place by David Miller.
How awful of him…
I remember the night of his election people tweeting that they were going to move out of Toronto because this was going to destroy the city… Yup.

So I’m going to take a moment and put on my left-wing hat, and figure out how I would reply to this post.
I would probably reply with this comment, saving you all the time to have to type it for yourself;

“Yes Urban Daddy, you right-wing capitalist bastard, he’s cutting taxes but how is he going to pay for services? I’ll tell you… He’s going to cut services and apply userfees!”

Well, Lefties (and I am left-handed so do be offended) I would like present this case in my defense of not wanting to tax the rich to give to the poor… Your hero, David Miller put in place all these taxes and fees because he wanted to point out how poorly the previous mayor treated the city and to pay for all his giving to make every Torontonion equal… Then upon stepping down from being mayor, in order to preserve his “legacy” he announced that he left the city better than it was when he took over, with a surplus! Pardon me.
surplus would mean his additional taxes needed to run the city were either a cruel joke or a huge miscalculation of the debits and credits at City Hall.

That’s like me running a free swimming pool, then suddenly charging users $10.00 a visit because without it the pool will have to close, then after doing this for 5 years saying, Look everyone, I have $2 million extra dollars in the bank”… Not nice!

So I for one am happy that for dinner last night there was no gravy. Staying away from that stuff can help me shed some pounds… That and not wearing pink!

BEAUTY!

Still on politics: 10 Reasons to Vote for Rob Ford for Mayor of Toronto

I’ve been challenged by those leaning to the left (maybe a little too far to the left to make a difference) and those standing in the centre to give them 10 good reasons why I am voting for the right-leaning Fiscally Conservative, Rob Ford, for Mayor of Toronto on October 25, 2010. 

Here is my list: 

10. Once elected, Ford pledges to cut waste at City Hall, and that means no councillors will be given free passes to anything, or free parking or free TTC passes…  I know even those on the left can feel my frustration when reports come out that councillors without cars were passing off their free parking pass to others. 

9.  Reduce spending – It makes sense after cutting waste, to reduce spending.  This goes right in the face of George Smitherman’s campaign promises as this is a big part of Ford’s campaign.  He’s going to reduce spending on salaries, on unionized garbage workers, on building middle of the road streetcar only lanes that mess up streets.   

8. Eliminate the hated city vehicle registration tax – Toronto residents have to pay $60 every year to register their vehicle. It’s a cash grab that hits families hard.  Rob Ford will push to eliminate the Vehicle Registration Tax at the first City Council meeting after becoming Mayor.  Too bad I just renewed my vehicle for 2 years and paid $120.00 extra.   

7. Eliminate the land-transfer tax – This tax almost killed us when we bought and sold our house.  The land transfer tax on a million dollar house in Toronto costs the seller over $10,000.00.   

6. Garbage and other solid wastes must be collected on schedule, without fail. The strike during the summer of 2009 put the health of people and families in Toronto at risk.  Etobicoke, for example, uses contracted providers and saves the city $2 million each year. By adopting the same approach for the whole city, taxpayers will save about $20 million each year and can have the confidence their garbage collectors won’t go on unnecessary strikes. 

5. People and businesses in Toronto depend on the TTC to get them from home to work, or school. When the TTC isn’t running, the city grinds to a halt and commuters and businesses suffer. TTC service is essential and it must be designated this way in order to prevent costly strikes. 

4. For seven years, City Hall has tackled Gridlock by declaring war on cars in Toronto. Toronto has eliminated lanes from busy roadways, increased parking charges, ignored roadway repairs and generally made life miserable for drivers  

3. I often wondered why it takes my 20 minutes during rush hour to go north on Bathurst street considering all the lights should be synchronized, right  Well they’re not.  I no sooner leave on light and the next one is red… Very frustrating.  Once elected, Ford, will synchronize the city’s traffic signals to improve traffic flow.

2. We will keep and maintain our Expressways.  The Gardiner Expressway, Don Valley Parkway and Allen Road/Expressway will be maintained, without tolls, as key components of our transportation infrastructure. 

1. Build a comprehensive network of off-road paved, illuminated, bicycle trails with street lamps across the city.  In addition, 100 km of pedestrian paths alongside the bicycle trails.

 Not bad, eh?  But in case you are still not convinced, I have more reasons…

• Introduction of Smart Card technology for fare payment on TTC
• Streetcars are not the answer to Toronto’s transit needs – To attract drivers into transit, it must be comfortable, convenient, affordable, reliable and rapid. Streetcars are none of these things. Streetcars are slow (average speed: 17km/h) and take hours to travel across town. This limits your ability to live in one part of the city and work in another. Streetcar construction destroys streets and interrupts businesses. Streetcar lines down the centre of arterial roads increase gridlock and create pollution.
•  Hiring of 100 additional frontline police officers giving Toronto Police enough new officers to
  • Protect Children in Schools. 30 additional School Resource Officers will double the number of schools protected by this successful program. By introducing police officers to youth in a positive environment, students are less likely to take a negative view of police and more likely to seek help for issues before they reach a violent stage
  • Target Gangs, Guns & Violence in More Communities. 70 additional frontline officers will support an expansion of the successful Toronto Anti-Violence Intervention Strategy (TAVIS) targeting gangs and violence in priority neighborhoods year-round.

Still not convinced?  Still can’t move past the way Ford looks?

Then let’s look at the very poor #2 choice, George Smitherman and his “plan” for Toronto.  

 George has a three-point plan to get Toronto working again:

1. Get City Hall’s books in order.  How?  Freeze taxes and hiring for one year.  Freeze spending for 100 days so he can review “every dollar the city spends”
2. Get Toronto moving again by expanding transit to every corner of our city, ensuring faster, round-the-clock road repairs and separating bikes from cars to improve safety for both.  How?  Where is this money going to come from?
3. Create jobs – especially for young people – by telling the world we’re open for business.  Really?  LOL.  Yikes!!! 

Even though George will not talk about the eHealth scandal – he has walked out of a debate when it came up – stating that he had nothing to do with that scandal.   So I guess as a deputy premier for the province of Ontario, he had no power to stop this from happening.  He does, however, say this; “I have the experience of being a senior cabinet minister – and have the scars to prove it. I know what it takes to run an organization as complex as the City of Toronto”. 

So how is George going to pay for all this?  It’s on his website.  Go see it for yourself.  But I have taken these figures right from his sight and made it nice and clear.

Revenue: 

$100 million from the province 

$100 million from the sale of Enwave 

$65 million from selling off “unused city land” 

$33 million from growth in property tax payers. 

So he’s going to sell of city assets and use property taxes to pay for his plan.  Hope you like paying $20,000 a year on property tax.

But George is going to find cost savings too… So what are in his plan?!?

Well, George is going to save $61 million by only re-hiring 2/3rds of city staff that  retire 

Save $50 million by spending less and;

Save $150 million by being smarter and buying all of Toronto’s items together, a la Rob Ford… 

So there are some might big assumptions here… One that the province is going to give the city $100 million dollars, and that there will be enough city assets left for George to sell to pay for his plan.  Once an asset is sold, it’s gone forever.

By this rate he’ll burn through the 1 billion that was wasted while he was deputy premier of Ontario in 4 years as Mayor of Toronto. 

But what about the re-hiring of only 2/3rds of retiring city staffers.  Well anyone involved in city politics knows that retiring city workers are at the top of their pay-scales and a majority of them are probably pulling in over $100K/year.   Basically Smitherman is going to rely on attrition and not rehire the 6% that retire each year, but he’ll re-hire the fat cats with their pensions and seniority.  Nice…

So what is this $100 million dollars Smitherman is going to net by selling Enwave?!?  Well the city of Toronto has a 43% stake in Enwave Energy Corp. and after 7 years of spend-first, tax the rich leadership, the city faces a budget shortfall of as much as $500 million.

Working in the Trenches: A tale of a CRA field officer

This post is yet another post that I was encouraged to write by Elliott of Supernova.com, after telling him this tale while our boys were in karate class.

I was spouting off about my days working for the Canadian Tax Authority, when my responsibilities afforded me the opportunity to leave the office and visit clients to discuss their tax debts / compliance issues.

Unlike others who “may” have abused that authority, I loved getting out to visit clients. I’m a social guy, and it was always in my best interest to leave a good impression on them and help them resolve their issues, while also promoting the CRA.

I would always set up a full schedule of visits, and spend the entire day seeing as many as I could. When I first started with this role, I would wear a tie, but as I became comfortable with the role and spoke to many clients I realized the tie made me appears like I was a salesman, or worse, Jehovah’s Witness, so people refused to open their doors for me.

So I kept the nice clothes, but lost the tie.

One fine spring day, I found myself assigned to a business quite far north of the city who had been filing for the GST (now HST) for around 5 years, but they had been getting quite a lot of money in credits and for some reason had stopped filing, and their account had credits sitting there, un-issued.

Over the months proceeding this visit, I had called and left many messages and sent several letters, but there was no response, so I set up a visit during the day to initiate contact.

Upon arriving at the address I located in my Perlies, I realized I was in a very secluded, run down, commercial area which appeared to be pretty vacant – really odd for a weekday.

I approached the unit, the door was open, so I walked in and yelled, “hello, anyone here”.

I heard a voice respond back to me that I should enter the warehouse – that he were back there with another employee.  The front foyer of this unit had some electronics and other electrical gadgets so I briefly stopped to make some quick notes as to what I thought this company did, as I made my way to the back.

Once in the warehouse, I was shocked…

In front of me was this huge dark, empty warehouse with a desk at the back of it.  At the desk were 2 males, and there was one light on in the warehouse and it was just above the desk, like you would see on TV.

I stopped dead in my tracks.

“You can come closer”, the man sitting down calmly said to me.

“No thank you, I’d rather stay here”, I replied surveying the situation.

“What can I do for you?” said the other man, standing to the right of the man sitting at the desk, his arms crossed.

“I’m here from Revenue Canada, it would appear that there were some errors on your GST reports and I had left several messages but no one called me back, so I came to visit to see if we could resolve this in person”.

The response I got shocked me…

The man sitting down said to me; “Do you see that baseball bat behind the door?!?  We use that to take care of people like you!”  He then stood up.

I looked at the 2 of them and said; “The CRA owes you guys money, however I do not feel welcomed here so I am leaving.”

I turned around and left, hoping not to hear them come running after me.  I must say thinking about it now that I must have raced out of there, and I remember my heart pounding – thinking about my family.

I had parked across the parking lot facing the unit so that when I arrived I could take notes in my car about the business – like traffic, registered names, condition of the building…  I opened my door, sat down, locked my door and called my team leader.  As the phone was ringing the 2 guys rushed out of the unit and came towards my car.  I rolled down my window very slightly and told them I was talking to my boss and they should stay back from my car.  I turned it on.

They asked me to hang up – said it was a misunderstanding, that they were expecting a “bill collector” and they had been harassed.  They wanted the money owed to them as it might be enough to get this debt off their books.  My TL answered the phone and I told him briefly the situation.  I told the guys I would not leave my car, and have to come back with my TL, possibly tomorrow.  I handed them both the information they needed including the missing returns and the amount of the credit on file with the CRA.

They stood there looking at me…

My TL told me to leave.

I did.

One week later we returned with the RCMP.

The place was raided, the men arrested and a bunch of weapons seized.  All the electronics were stolen goods.  The credit on the GST account was seized by the RCMP as having been proceeds from crime.

I closed the GST account.

From that day forth I realized some people are intimidated when they receive a visit from the tax department.  I used this to my advantage, but never entered a building which made my spidy-sense tingle.  From that day on I clearly identified myself and my intentions up front before I would enter a building or house.   If it looked shady I would come back with another person bigger than myself (I’m 5 foot 11, 225 pounds).  We looked like thugs there to break some legs. 

So now you know.

Thursday Thirteen

It came to me last night during a conversation with a friend that a lot of people may not know much about me other than the tidbits I choose to share.

Case in point… This friend thought I was “left wing” (shudder). 

I tried explaining my views.  Then I thought about the image I have been portraying through my posts.

So I thought this Thursday Thirteen could discuss a little about me.

1) I’m right-wing conservative.  Always have been, always will be.  Not radical / extremist as I hate extremists.  They ruin everything.  I’m for big business and capitalism.  I believe that people have choices to make in their lives and they should live by those choices.  If you decide to skip school as a kid and not graduate then you stand a much greater chance of being a drain on the system.  Your choice.  Don’t make me pay more for your welfare because you thought smoking up and drinking were more important than school.  I chose to trudge through school and fight and claw to 2 other degrees, graduate and post-graduate.  I don’t need, nor do I want the government to prop me up.

2) I am environmental to the core.  Don’t like pollution, waste or what is happening to the planet.  I’ll hold “garbage” which can be recycled with me until I can.  I feel bad for birds covered in oil from toxic spills and I have boycotted companies for polluting.  Geez. I drive a hybrid.

3) I love sports.  Prefer playing them, but like watching them too.  Hockey, Baseball, basketball and lacrosse.  Love them all.  Also fiercely patriotic, so that ties in sports-wise. 

4) A good time to me involves my family.  If I’m doing something I want them with me. 

5) I have never taken or been offered drugs and in a sheltered sort of way I judge people who do.  Sorry.  I just do.

6) I’m ok with my lack of hair but my expanding physique really bugs me to the point that the stress causes me to eat.  Stupid, eh?  Nothing relaxes me more than a great sweaty workout.  I recently hired a personal trainer to help me get through this difficult issue I have with my body.

7) I hate conflict.  But if I have to  will fight to win in the most ruthless manner.  My morals go out the window if I’ve been wronged.

8) I love loud aggressive music.  Saliva, STP, Marilyn Manson, Nirvana, Disturbed, Theory of a Deadman… The louder the better.  But I cannot listen to anything that sounds like my kids banging on pots and pans, nor rap.  That shit makes me sick.  And no, rap and that horrible lip syncing stuff is not music.  Real music dies when sampling begins.

9) I am educated and continue to expand my knowledge on a daily basis.  Looking at courses right now.

10) I love gardening.  Love it!  Also like painting (houses, but not the taping part), enjoyed running (until injured).

11) Hate stupidity.  My patience over the years has declined and while I can still hold back I try. 

12) I have a wicked temper.  I seem to have less and less control of it when it comes to the stupidity of others.  I believe it is called speaking up.

13) I am a blogger.  As I approach 500 posts on this blog and as I try to re-brand my professional tax blog I have come to the conclusion that I enjoy blogging – way more than “tweeting” – and I can see this expanding for me as more and more people become familiar with my writings (on the tax side, not this one).

There.  A little more about me.