Starbucks Prices Going Up in Canada and the US on July 12th, 2016.


Word broke a couple of days ago that Starbucks is planning to increase the price on select drinks, upwards of $0.30 per drink on July 12th, saying only that the increase would impact “select beverages.”

Starbucks raised its prices by 5 to 20 cents for some of its drinks in July 2015. That increase mostly impacted hot beverages.

Since 2013, Starbucks have been increasing prices every summer, including last summer’s increase of between $0.05-$0.20 on hot drinks.

Heck, they even changed their rewards program to make it a longer timeframe for purchasers of the cheapest drinks to reach their free coffee.

And, they posted a revenue of nearly $5 billion last year!

What a business model!

According to the Canadian operations, the price of a Venti coffee will increase by $0.10 in some but not all provinces, and the price of their lattes in Grande and Venti sizes will increase $0.20, again in some provinces.

In the US, Starbucks announced that their Tall, Grande and Venti-sized coffees will see a price increase of $0.10 each in most States in the country.

At this time of declining coffee prices, we can clearly see that Starbucks coffee prices are not closely tied to the price of the bean alone, but also tied to the other costs, including the stores, employment, and other items which comes with a Starbucks drink.

Target Corporation Announces Plans to Discontinue Canadian Operations… Immediately!


MINNEAPOLIS — January 15, 2015target

Today Target Corporation announced that it plans to discontinue operating stores in Canada through its indirect wholly-owned subsidiary, Target Canada Co. and an application for protection under the Companies’ Creditors Arrangement Act (CCAA) has been made to protect Target Canada from it’s creditors.

I’m shocked, and sad.

With 133 stores across the country and around 18,000 employees many saw this news coming, and now that it has arrived, it’s still left many with their mouths open in shock.

According to Target’s press release, and to ensure fair treatment of their Canadian employees, Target Corporation has asked the courts to approve a contribution of $70 million (Canadian) into an Employee Trust which would provide nearly all Target Canada-based employees a minimum of 16 weeks of compensation, including wages and benefits coverage for employees who are not required for the full wind-down period.

Target Canada stores will remain open during the liquidation process, which is expected to begin immediately.  Speculation is that as stock is sold, stores will continue to close until there are few left with merchandise which will be either sold off or returned to Target’s inventory.

One of the leading factors behind this decision is the $5.4 billion of pre-tax losses in the fourth quarter of 2014 alone.

Additional factors leading to this decision include the poor introduction into the Canadian market after much excitement, when locations chosen were poor, shelves empty and prices much higher than prices in US Target locations or in rival Wal-Mart stores (which entered Canada nearly 20 years ago).

It will cost Target Corporation between $500 million to $600 million to leave Canada (less the sale of any real estate assets) and this is not expected to have any impact on US operations nor should any customers south of the border see an increase in prices to cover these costs.

With the departure of this big box brand, it will be difficult to see what could replace Target in the locations it held.  With K-Mart and Zellers, Simpsons, Woolco, Eatons and Sears leaving Canada it could spell the end of the this business model.  I did, however, notice on a recent trip through Western New York, that many malls had replaced their big box retailers with activities like mini-golfing and go-karting and they were packed with people.

Having had the opportunity to meet and become friends with some of Target Canada’s management team, I can say that this is a very sad day for us not only having to say goodbye to a business which failed in Canada, but to some really great people who tried their hardest to make it work.

See you in Minny!

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.

Hiring a Nanny in the US: Not an Easy Task.


English: Seal of the United States Department ...
English: Seal of the United States Department of Homeland Security. (Photo credit: Wikipedia)

The kind folks at www.nannypro.com brought this article to my attention, as a Canadian, in order to help shed some light on the requirements and obstacles around hiring nannies in the US.  The article link is below;

http://www.nannypro.com/blog/why-it%e2%80%99s-not-so-easy-to-hire-a-nanny-from-overseas/

Once you get through this informative post you will come to the same conclusion that they did, and that it is a long, complicated process to hire a nanny from overseas to work in the US.

Some of the delays include;

Potential nanny employers in the US are legally required to verify a nanny candidate’s employment eligibility using form I-9 from the Department of Homeland Security, U.S. Citizens and Immigration Services.

The purpose of the form is for all U.S. employers to complete and retain a Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. On the form, the employer must examine the employment eligibility and identity document(s) an employee presents to determine whether the document(s) reasonably appear to be genuine and relate to the individual and record the document information on the Form I-9. The list of acceptable documents can be found on the last page of the form.

The form can be found here;

http://www.uscis.gov/files/form/i-9.pdf

The handbook for the form is here;

http://www.uscis.gov/files/form/m-274.pdf

The other key concern here is that in order for a nanny to legally accept work in the United States, she must be a citizen of the United States, a noncitizen national of the United States, a lawful permanent resident, or an alien authorized to work in the United States.  As a result of this language and strict criteria, most nannies outside of the United States aren’t able to legally accept work in the United States.

Hmmm.  Great law, eh?

As a result, many parents turn their attention to Au Pairs since the U.S. Department of State, Bureau of Educational & Cultural Affairs has a visa progran to bring over foreign nationals between the ages of 18 and 26 years of age who are a secondary school graduate or equivalent and who are proficient in English to continue their education and experience American life with a host family.  Here is where it gets interesting… They can do this in exchange for room, board, and a stipend, Au Pairs provide limited child care.

This is unfortunately a short-term solution.

On the horizon, the U.S. Department of Immigration recently reclassified live-in nannies from unskilled to skilled workers, meaning some nannies in some countries may be eligible to secure a visa to work in the United States as a live-in nanny.   Emphasis on the word “some”.

But if this appeals to you, this article recommends that these parents seek the services of an immigration attorney who specializes in securing visas for nannies, which makes sense.

So after all this if you are still interested in looking for a live-in caregiver, I wish you the best of luck and I encourage you to get moving on this process early.

Some parents register their kids for school while pregnant with that child and unless the rules and regulations lessen, hiring a caregiver in the US will be the next task.

What is on your radar?


Here are some items on my radar right now which may or may not make their way into a real blog post down the road;

1. I understand there was a shooting at the Caribbean Carnival (formerly Caribana). Some idiot shot one of the dancers then fired into the crowd while ignoring the police telling him to drop his gun so they shot him.

WOW.

I think he set back the carnival 10 years.

I’m not sure if the police killed him or not, but if they didn’t he should pay the organizers a lot of money for ruining what looked like a great event.

2. Rob Ford went to this event. He didn’t go to the Gay Pride parade but he came here. Oh boy… This is going to be a wonderful Ford-bashing week by the lefties.

3. Roberto Alomar was elected into the Major League Baseball Hall of Fame last weekend and today in Toronto at the Blue Jays game the team held an on-field celebration to honour him.  I remember Alomar for the game-tying home run in the playoffs off of Oakland A’s ace relief pitcher and a player I detested growing up, Dennis Eckersly. I also remember Alomar for spitting in the face of an umpire. What I didn’t remember was that he was only a Blue Jay for 5 years. I thought it was much longer and when I searched his stats on the net I was surprised to know that he played for the Orioles for 4 years with Cal Ripken Jr, and then with the Indians, Mets, White Sox and finally retiring after signing with the D’Bax. I knew he came from the Padres to the Jays but the rest I could not recall. Odd.

4. Is it just me or do watermelons suck this year? I recall reading and blogging about a field of exploding watermelons from China – the result of too much water and genetically modified melons with thinner rinds – and I think about every melon we’ve had this year which has been over ripe and lacking of any real flavour. Maybe the melon farmers should go back to the real melon seeds and sell a tasty product and not mass produce garbage.

If I took back every crappy melon to the store I bought it, I would not have paid for any this year.

5.  Hey, look at that!  It’s August 1st today, and that means we’re in the stretch run for back to school… Already. Man do Toronto summers go fast, especially when the first month is all rain, and the previous month no rain and a ton of heat. 

With the fall coming that tells me it’s time for;

  • vacation
  • taking the kids apple picking
  • taking the family to see beautiful fall colours
  • back to school shopping
  • the CNE!

6.  In what I feel is a mistake that could happen in Toronto if the “Downtown Elite” got their way, the President of the US agreed to raise the debt ceiling for the states.  What that means???  It means they are prepared to take on more debt without going bankrupt.  This ostrich like behaviour is going to come back and bite them in the ass big time and will for sure prolong the recession. 

Until both the republicans and the democrats agree that lavish spending and ridiculous compensation for CEO’s and professional athletes are brought back down to earth, the recession will not end.  Since a recession is essentially a view of public confidence in the economy the government has to appear to be doing something to equal the playing field before we can see the light at the end of the tunnel.

Case in point… HSBC.  Last week they cut 10,000 jobs, and this week 25,000 more.  I can’t see a company as well run as that shedding 35,000 jobs and then suffering, so that tells me they have 35,000 more positions than they needed.  WOW.  That’s a huge hit to the workforce no matter where the jobs are located.  And this is just one example.

7.   Ford recalled 1 million trucks due to faulty gas tanks and socialists everywhere are prepared to descend on Toronto City Hall looking to blame either Rob or Doug…

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