News

Deficit Elimination Critical For Job Creation And Economic Growth

January 24, 2012 By admin Leave a Comment

The McGuinty government remains focused on jobs and the economy. Despite uncertainty around the world, Ontario’s real Gross Domestic Product (GDP) rose 0.7 per cent (2.7 per cent annualized) in the third quarter (July to September 2011).

Provincial GDP has now increased 5.8 per cent over the past nine quarters, putting it one per cent above its pre-recession level. Growth in the third quarter was driven by increases in exports and Ontario’s manufacturing output. Modest gains in total investment and consumer spending also contributed.

As of December 2011, employment was 42,300 jobs above the pre-recession peak in September 2008. Ontario’s employment has increased by 299,100 net jobs from the recessionary low in May 2009, with full-time employment up by 268,000 net jobs.

The McGuinty government’s plan to make Ontario more competitive and create the right climate for job creation is working. The plan — including Ontario’s Tax Plan for Jobs and Growth — helped stabilize the province’s economy by lowering income taxes for families and businesses and introducing tax changes — including the HST — to help ensure Ontario’s future prosperity.

Annual Tax Expenditures & Evaluations Report

January 20, 2012 By admin Leave a Comment

This report provides estimates and projections of the revenue impacts of federal tax measures designed to support the economic and social priorities of the Government of Canada.

The publication reflects tax relief measures from the Next Phase of Canada’s Economic Action Plan, the Harper Government’s low-tax plan for jobs and growth.

“In an uncertain global economy, our Government will stay the course with our low-tax plan for jobs and growth—a plan that has worked and served Canadians well,” said the Honourable Jim Flaherty, Minister of Finance.

“Our economic leadership will continue as we stick to our plan to return to fiscal balance in the medium term, implement our deficit reduction action plan to find savings within government spending, and take targeted actions when necessary to support the recovery.”

For more information visit the Department of Finance website.

We’re Moving

January 10, 2012 By admin Leave a Comment

On February 6th 2012, Padgett Business Services will be moving to our new offices in Kanata South on 160 D Terence Matthews Crescent Suite 2.

“We are really going to enjoy this new location,” said Karen Jerome, CMA, “it will facilitate our continued growth and I think clients and prospective clients will find it more convenient. We’re all looking forward to the new office; the office is situated close to other businesses, fitness facilities, and restaurants.”

Our new address effective February 6 will be:

160 D Terence Matthews Crescent

Suite 2

Kanata, Ontario

K2M 0B2

For more information please contact via email

Padgett Nominated for Professional Services Business of the Year

January 10, 2012 By admin Leave a Comment

KANATA, Ontario – Padgett Business Services® was recently nominated for Professional Services Business of the Year through the Kanata Chamber of Commerce. Padgett is a financial reporting, tax consulting, and payroll business that specializes in servicing independent businesses with less than 20 employees. Karen Jerome opened her office in 2007, which is located in the Beaverbrook Mall in Kanata.

“It is an honour to have been nominated for this award with the Kanata Chamber of Commerce. Our specialized advice and personalized service will always be the strength behind what we do for small business owners,” said Karen. “These are the tools that have taken our Kanata office to the forefront of our company and Padgett to the forefront of our industry.”

The Kanata Chamber of Commerce will be holding its People’s Choice Awards on February 23rd, 2012 at the Brookstreet Hotel.

For those interested, you can place your votes through the Kanata Chamber of Commerce website at www.kanatachamber.com . Voting will remain open until February 3, 2012.

Since 1966, Padgett has provided financial reporting and tax consulting services to independent business owners throughout North America. Padgett has been ranked as a #1 small business accounting firm by Entrepreneur, Success, and Income Opportunities magazines, as well as being ranked in Accounting Today’s Top 100. The local operation is part of a network of over 400 independently owned and operated Padgett offices throughout North America.

Form T2200 – Declaration of Conditions of Employment

January 9, 2012 By karen Leave a Comment

Canada Revenue Agency (CRA) expects employers to complete Form T2200 for employees that have reasonable grounds to make expense claims against employment income. If there is some doubt, CRA will provide interpretive assistance.

For more information about the T2200 visit the CRA website.

Remitting GST/HST on Taxable Benefits

January 9, 2012 By karen Leave a Comment

Did you know that GST/HST must be remitted on a taxable benefit unless the benefit is tax exempt or zero-rated, for example the benefit on low-interest loans? An example of a tax benefit that is not exempt includes the automobile standby charge and operating expense benefit. GST/HST must be remitted on shareholder benefits if they fall into Subsection 15(1) and are not tax zero-rated or tax exempt.

Automobile operating expense benefit

If your employee ordinarily worked in, or the location to which he or she ordinarily reported to, is located in a p a r t i c i p a t i n g province (British C o l u m b i a , New Brunswick, Newfoundland and Labrador, Nova Scotia, or Ontario), you are considered to have collected an amount equal to a percentage of the value of the benefit for GST/HST purposes, based on one of the following rates:

5% for British Columbia;
11% for Nova Scotia;
9% for New Brunswick, Newfoundland and Labrador;
9% for Ontario, or 6% if the registrant is a large business for the purpose of the recapture of input tax credits for the provincial part of the HST.

If your employee ordinarily worked in, or he or she ordinarily reported to, a location in a non-participating province or territory (the rest of Canada), you are considered to have collected 3% of the value of the benefit for GST/HST purposes as calculated above.

Other Than Automobile Operating Expense Benefits

If the last establishment where your employee ordinarily worked, or to which he or she ordinarily reported in the year, is located in a participating province (British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, or Ontario), you are considered to have collected the GST/HST as a percentage of the value of the benefit as follows:

11/111 for British Columbia;
14/114 for Nova Scotia;
12/112 for Ontario, or 4/104 for benefits relating to a motor vehicle that is subject to the recapture of the input tax credits for the provincial part of the HST, if the registrant is a large business;
12/112 for all other participating provinces.

If the last establishment where your employee ordinarily worked or to which he or she ordinarily reported in the year is located in a non-participating province or territory (the rest of Canada), you are considered to have collected 4/104 of the value of the benefit for GST/HST purposes as calculated above.

Get Out of Debt Now!

December 22, 2011 By karen Leave a Comment

Most developed countries in the world are increasing their spending and debt. Most governments will not stop their excessive spending until they are forced to do so. This happens because they cannot sell their debt (e.g., Canada Savings Bonds, Government of Canada bonds, provincial government bonds, crown corporation bonds, t-bills) without paying substantially higher interest rates. Once they are required to pay higher interest rates they can no longer afford the interest on the debt. Therefore, they will have to slash spending, raise taxes, or both.

Western Europe, Japan, United States and Canada are in imminent danger of having to pay higher interest rates on their debt. This will start a downward spiral of their economies, which will lead to a recession. Some people think parts of these economies have been in a recession since 2008. A recession is falling Gross Domestic Product (GDP) and higher unemployment. Governments usually try to counteract this by increasing spending and lowering short term interest rates. Unfortunately (or fortunately), the governments will not be able to increase spending because of the debt, and interest rates can’t really go much lower. Canada and the rest of the developed countries are going down the same road as Greece, Ireland, and Portugal. See our article on Debt in Selected Countries.

Recessions are a normal part of the business cycle, but if we go into a recession now because of sovereign debt, it may be long and nasty. You can’t really tell when a recession begins or ends until probably five years after it’s over. We entered a recession in 2008, but at this point we can’t really tell if the recession ended in 2010, or if it is a double-dip recession that we are still in.

What can you do?

The most important thing you can do is reduce your debt, especially debt on which the interest is not tax-deductible. You can also lobby your governments (federal, provincial and local) to eliminate the deficit, reduce debt, and become better managers of your money. You can do this by contacting your Member of Parliament (MP), provincial and local government representatives. For a limited time, you can provide input to the Federal government through the online pre-budget consultations. You could also sign petitions that are on the Canadian Taxpayers Federation website.

Rollover of RRSP, RRIF or RPP to RDSP

December 22, 2011 By karen Leave a Comment

Budget 2010 proposed to allow a tax-deferred rollover of a deceased individual’s RRSP/RRIF or RPP proceeds to the Registered Disability Savings Plan (RDSP) of a financially dependent infirm child or grandchild. This is effective for deaths occurring on or after March 4, 2010. The actual transfer to the RDSP, however, cannot be made until after June 2011. Previously, the proceeds could only be received on a tax-deferred basis by a financially dependent infirm child or grandchild under 18 years of age by a transfer to the RRSP, RRIF or eligible annuity of the child or grandchild.

The Sustaining Canada’s Economic Recovery Act, Bill C-47, was introduced in the House of Commons on September 30, 2010, including the legislation for the rollover to RDSPs, and received Royal Assent (became law) on December 15, 2010.

Who is eligible?

An eligible individual:

is a child or grandchild of a

deceased RRSP or RRIF annuitant, or

deceased RPP member

was financially dependent on the deceased, at the time of the deceased’s death, by reason of infirmity of the dependent.

What proceeds are eligible?

Eligible proceeds means any of

	a refund of premiums from an RRSP
	an eligible amount paid from a RRIF, or
	a lump sump payment (other than from actuarial surplus) from an RPP

that is received by an eligible individual as a result of the death, after March 3, 2010, of a parent or grandparent of the eligible individual.

Specified RDSP payment

A specified RDSP payment:

is an amount paid after June 2011 to an RDSP under which an eligible individual is the beneficiary

must be designated as a specified RDSP payment by the eligible individual

will be included in the income of the recipient on withdrawal from the RDSP

complies with the following RDSP contribution conditions:

contributions may not be made to the RDSP in any year in which the beneficiary is not eligible for the disability amount tax credit, or after the death of the beneficiary

contributions may not be made if the beneficiary is not a resident of Canada

contributions may not be made after the end of the year in which the beneficiary turns 59

contributions must not exceed the lifetime maximum of $200,000

the holder of the plan must provide written consent for the contribution

Transitional eligible proceeds

Where the death of the RRSP or RRIF annuitant or RPP member occurred after 2007 and before 2011, transitional rules apply that recognize that individual estate plans may not have been amended to reflect the new rules.

Transitional eligible proceeds include an amount received as a result of the death after 2007 and before 2011 that is:

	any of a refund of premiums from an RRSP, an eligible amount paid from a RRIF or a lump sum payment (other than an amount of actuarial surplus) from an RPP; or
	any amount that had been rolled-over under s. 60(l) of the Income Tax Act to the taxpayer’s RRSP or RRIF (i.e., the taxpayer claimed a 60(l) deduction for the amount), and which is subsequently withdrawn from the RRSP or RRIF in order to make a “specified RDSP payment”.

These transitional rules apply where the deceased individual may have provided a bequest directly to the eligible individual, to the spouse or common-law partner of the deceased, or to another beneficiary. These rules allow this beneficiary to contribute to the RDSP of an eligible individual. If the bequest had been included in the income of a taxpayer, for instance the recipient or the deceased, then a deduction will be allowed for the contribution of the transitional eligible proceeds to the RDSP. Where the death occurred after 2007 and before 2011, the contribution to the RDSP must be made before 2012.

Government Wraps-Up Year With Focus On Creating Jobs

December 12, 2011 By karen Leave a Comment

Ontario is moving forward to address the most important priority for Ontario families: jobs and the economy. The fall session of the Ontario Legislature wrapped up yesterday with a number of important initiatives and bills being introduced including:

The Healthy Homes Renovation Tax Credit that will, if passed, help seniors stay in their homes longer and help create jobs.
The Accepting Schools Act that will, if passed, help make Ontario schools safer and more accepting places to learn by requiring all school boards to create policies for bullying prevention and intervention, progressive discipline, and equity and inclusive education.
The Attracting Investment and Creating Jobs Act that will, if passed, create new opportunities with a proposed development fund for southwestern Ontario and make the Eastern Ontario Development Fund permanent.
The Family Caregiver Leave Act that will, if passed, build on the existing Family Medical Leave to expand protected leave from work for caregivers so they can spend more time with family members who cannot care for themselves because of serious injury or illness.
An amendment to the Residential Tenancies Act that will, if passed, set Ontario’s annual Rent Increase Guideline between one and 2.5 per cent beginning in 2013 to ensure affordable rent increases for tenants and fair return for landlords.

The Speech from the Throne was passed earlier this week providing a road map to creating a stronger, more competitive economy that protects and creates jobs for families. Working together, Ontarians are moving the province forward in a number of areas including:

Education — Our students are ranked among the best in the world. Results from the 2010 Pan-Canadian Assessment Program Report show our Grade 8 students are among the highest achievers in the country. Ontario students scored significantly higher than the Canadian average in all three subjects — math, science and reading — and were number one in reading.

Tax Reform — Ontario’s Tax Plan for Jobs and Growth is lowering income taxes for families and businesses. Tax changes are making the province an attractive place for businesses to invest. Since the Tax Plan for Jobs and Growth was introduced in July 2010, investment in machinery and equipment has increased by 22 per cent or $9 billion.

Infrastructure — The province’s long-term infrastructure plan, Building Together, will create and preserve 300,000 jobs, strengthen the economy and help meet the needs of local families.

2012 Federal Budget – Pre-Budget Consultations