Monday, December 7, 2015

Pay online and improve your bottom line!

Did you know?
With My Business Account, you can choose to make your tax payments online directly from your bank using the pre-authorized debit (PAD) service. Stop worrying about forgotten installment deadlines and being charged for late payments. You choose the bank account, the amount of the payment, and the specific date or dates. The service puts you in complete control.

Here’s how to get started:
-If you are already registered with My Business Account, set up a PAD a minimum of five business days before your payment deadline.
-If you are not already registered with My Business Account, you will need to register first and allow five to 10 business days for your security code to arrive in the mail. Then you can access it and set up a PAD.
-Once you have set up a payment, you can change it up until five business days before the payment date.

The PAD system is secure and the Canada Revenue Agency (CRA) only makes withdrawals that you have authorized. Your online payments are as official as any paper record, each one is confirmed right away - and the CRA does not charge a fee for the service.

Watch this video: Pay your business taxes online. If you need more information, go to

Tuesday, November 3, 2009

'Special' EI benefits for self-employed to begin in 2011

Small business owners, read this good news!

The federal government has introduced legislation to extend some Employment Insurance benefits to the self-employed, human resources and skills development minister Diane Finley said Tuesday morning.

At a press conference in Toronto, Finley said the Conservatives are introducing the Fairness for the Self-Employed Act, which would extend Employment Insurance "special benefits, including maternity, parental, sickness and compassionate care benefits, to the self-employed."

That means everyone from small business owners to farmers can now access maternity leave, parental and adoptive benefits, and sickness and compassionate care benefits for the first time, though they will not get EI's regular weekly income replacement should they become unemployed.

Opting in would be voluntary, Finley said, and the government expects the program to be largely self-financing, though she was unable to give numbers or predictions based on expected demand.

Canadians could start paying premiums as early as January, at rates essentially frozen at 2009 levels. However, claims wouldn't be able to be paid out until January 2011, well into the recovery and after what many expect to be a record dip in unemployment in2010.

The act follows up on previous Conservative promises to protect the self-employed from the devastation of the current recession.

"About 2.6 million Canadians are self-employed," Finley said in a release. "The self-employed have had little or no income protection to cope with major life events, such as giving birth, caring for a newborn or newly adopted child, being sick or injured, or caring for a gravely ill family member."

The new legislation, if passed, would provide maternity benefits (up to 15 weeks), parental and adoptive benefits (up to 35 weeks), sickness benefits (up to 15 weeks), and compassionate care benefits (up to 6 weeks). These are the same benefits available to working Canadians.

"Farmers will be happy to hear this," said Richard Phillips, executive director of the Grain Growers of Canada, who was present, noting that farmers and their spouses are considered self-employed

Monday, October 19, 2009

Tipping the scales in favour of small business

Interesting article on Toronto Star:
Two experts weigh in on how you can get financing during a recession and what are the biggest mistakes owners often make

Catarina von Maydell, director of the Innovation Synergy Centre in Markham, explains how a small business can secure financing in a recession:
1- Know the best financing source for your company: Consider what stage of development you're at and what type of investor would be suitable for you and what expertise you are looking for.
2- Make a strong business case: A lot of times people build a product or service because they feel they need it, but they haven't really stopped to think about who's really going to pay for this. If you're not marketing to the right audience in the right way, it's not going to sell.
3- Focus on building the company vs. the product: A lot of entrepreneurs think they have a great product and it should sell itself. This is where many entrepreneurs get lost in the woods. They're overly focused on the product and product development.
4- Be prepared for the investment process: It's much more involved and will take longer than you think. It can take about six months just to become investment-ready. That means having a good business plan, a good pitch and a lot of documents ready for the due diligence process. Once you're investment-ready, it takes at least six months to get the cheque in the bank.
5- Having an open attitude: Too often the entrepreneur is so focused on getting cash they ignore some very valuable advice they may be getting through the investment process. Sometimes the value of the advice might be worth more than the monetary investment.

Jim Stewart, a mentor with the Innovation Synergy Centre, reviews the five biggest mistakes a small business can make during a recession, and how to steer clear of them:
1- Lack of planning: It's hard to make planning part of your culture when you're busy reacting. We advise businesses to take time once a year to figure out where they see the company in three years' time, and what do they have to do to get the company there. At the end of each quarter, compare what you thought would happen to what actually happened and adjust your planning accordingly.
2- Confusing profits with cash flow: You can't spend profits. You have to bring in cash faster than you spend it, or you have to have some in reserve. In a recession, people typically don't pay invoices as quickly. That stretches out your cash receivables. Watch your expenses, also.
3- Hiring people who you think can do the job, rather than someone who has already done the job: When you're trying to keep up with explosive growth, or fighting your way through a recession, there's really no time to train anybody. Hire someone who has been through the growth you want to take your company through, or someone who has managed through a recession.
4- Looking for a quick marketing fix: Business owners tend to have unrealistic expectations; they expect a marketing campaign to work perfectly the first time. It often doesn't. A first-time direct mail campaign, for instance, may be only 1 or 2 per cent. It may have to be sent out a couple of times, it may have to be followed up with a phone call. The list or the content may have to be changed.
5- Cutting marketing or promotion expenses in a downturn: When cash gets tight, it's easy to just to cut these programs. In fact, it's the worst time to do that. Your competitors are doing the same thing. If you keep up your marketing campaign, you continue to attract attention where your rivals may have backed off.

Monday, September 21, 2009


The most common deductions that apply to students are moving expenses and child care expenses.

Moving Expenses
You can deduct moving expenses if you move to attend courses as a full-time student or if you moved to start a new job, including summer employment, or to start a business. Your new home must be at least 40 kilometres closer to the new school or place of work than the previous home. Moving expenses can only be deducted against awards, employment or self-employment income.

Child-Care Expenses
Parents who are full-time students, or single parents who study full-time, can deduct childcare expenses on their tax returns. Part-time students may qualify for partial deductions.

The most common post-secondary non-refundable tax credits that apply to students are interest paid on student loans and the tuition, education and textbook amounts.

Interest on Student Loans
To be eligible for the credit, interest must, in fact, have been paid. The interest must be on a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or a law of the province, which governs the granting of financial assistance to students at the post-secondary level. Personal or family loans will not qualify. Credits that are not needed to offset income taxes are available for carry forward for up to five years.
You can only claim interest you have not previously claimed and you cannot claim interest that relates to a judgment obtained after you failed to pay back a student loan.

Education, Tuition and Textbook Tax Credit
You can claim the education credit for each whole or partial month in which you were enrolled in a qualifying education program. Part time students can qualify at reduced rates. Disabled part-timers can receive the full credit. In addition to obtaining a tax credit for tuition fees paid, this tax credit also covers mandatory fees such as student services, library and lab charges, athletics, computer services, exams, certificates and diplomas. Post-secondary students can claim a textbook tax credit of $65 per month for full-time and $20 per month for part-time studies.

Transferable Credits
The student has the option of also transferring this credit to a parent, spouse, common law partner or grandparent if it is not fully absorbed on his or her income tax return.
But if the student carries them forward, the transferability will be lost. The amount of education, tuition and textbook tax credits that can be transferred is limited to a maximum amount of $5,000 (or $850 in tax credits) per year.

Wednesday, June 17, 2009

Contract Doesn’t Determine Worker Status

Chances are, your business has independent contractors as well as employees. If so, it’s important to be aware that the Canada Revenue Agency (CRA) will determine whether a worker is an employee or independent contractor based on the facts and circumstances, not the wording of any contract you may have with theworker. A contract can help, but it won't override other factors.

The CRA will provide a ruling to determine whether a worker is an employee. The CRA looks at the control the employer has over the work - the more control, the more the worker will look like an employee.

The CRA will examine the facts that fall into three additional categories:
• Ownership of tools. What is the amount invested? What is the value of the tools and equipment? Who pays for the maintenance and rental of the tools and equipment? In an employer-employee relationship, the employer generally supplies the tools and equipment
required by the employee.
• Chance of profit or risk of loss. What is the worker’s financial involvement? Does the worker have the chance to make a profit? Does the worker risk incurring losses due to bad debts, damage to equipment or materials, or unforeseen delivery delays? Does the worker cover operating costs? In an employer-employee relationship, the employer alone assumes the risk of loss.
• Integration. This final factor is analyzed from the point of view of the worker not the payer. What is the relationship of the parties, evidenced by the parties' agreements and actions with respect to each other? Where the worker integrates his activities to the commercial activities of the payer, an employer-employee relationship probably exists.

A well-drafted independent contractor agreement supports your company’s position and serves as a blueprint of the working relationship between your business and the independent contractor. The agreement should include factors that support the classification of the worker as an independent contractor. In addition, it should specifically mention that the worker will not be treated as an employee for federal tax purposes.

Monday, June 1, 2009

Recession officially here, but worst may be over

It's official. We're in a recession.

Confirming what Canadians have known intuitively for months, Statistics Canada announced today the national economy contracted at an annualized rate of 5.4 per cent in the first quarter.

That follows a 3.7 per cent annualized drop in the fourth quarter of 2008 – formally meeting the technical definition of a recession with two consecutive quarters of declining real gross domestic product.

The declaration may finally be on the books but economists have shifted gears. Some are even suggesting the worst of the crisis could be over.

"Now that we do have two quarterly declines in GDP, it is completely official. But I don't think there was a shadow of a doubt as far back as the turn of the year," said Douglas Porter, deputy chief economist at BMO Capital Markets.

If fact, he believes there is reason for hope because the first-quarter decline was less dire than originally feared. Economists had expected a 6.4 per cent drop, while the Bank of Canada had forecast a much sharper decline of 7.3 per cent.

While a 5.4 per cent annualized drop is still nasty by any definition, Canada's economy appears to be faring better than most G7 countries during the global downturn. For instance, the U.S. economy contracted by 5.7 per cent during the same period, while Japan and Germany both recorded double-digit drops, Porter said.

So far, the Canadian downturn appears on par with the last major recession in the early 1990s. That's encouraging given "loose talk" from some experts earlier this year about the potential for a second Great Depression, Porter said. "I think there is reasonable grounds for optimism that it won't end up being as deep as the downturn in the early 1980s," he added.

Economists are now focusing on the timing of the impending recovery even though many are taking a prudent view of its potential strength. Porter is forecasting that second-quarter GDP will also decline but the drop will be "much, much less severe," coming in an annualized rate of 2.4 per cent.

The third-quarter reading could go either way, he said. There could be early signs of mild growth in Canada starting in July or August, but the global economy remains the wild card.
At first blush, the global backdrop appears favourable. Countries around the world have slashed key interest rates to record lows, while earmarking billions upon billions for fiscal stimulus. Some central banks have even embarked on quantitative easing, a radical measure to jump-start economic growth. While there are no guarantees, economists are hoping those drastic measures will begin reaping more favourable results by the end of this year.

For its part, the Bank of Canada has slashed its trendsetting interest rate to 0.25 per cent and has signalled plans to keep it there well into next year. The central bank makes its next interest rate announcement on Thursday. While no change is expected on rates, economists are eagerly awaiting details of the bank's economic commentary, including its views on the Canadian dollar.

By midday, the loonie was up another 0.32 of a cent to 91.92 cents (U.S.). Its rapid ascent in recent weeks could be a stumbling block for the economy as businesses, particularly exporters, grapple with lacklustre demand for goods and services.

Diana Petramala, an economist with Toronto-Dominion Bank, believes the Canadian economy will continue to decline through the second and third quarters of 2009 but is among those arguing "the worst of the recession is now behind us."

"We have seen some signs of hope that a recovery may be near – due to an easing in credit conditions, a possible bottom in the U.S. downturn, and a nice rally in stock markets since March," she said in a research note to clients. "We continue to look for a recovery in the last quarter of 2009."

Even if there is a recovery of GDP, there still could be an extended period of high unemployment, warned Erin Weir, an economist with the United Steelworkers union. That has been the pattern in previous recessions, he said, suggesting ordinary Canadians will continue to face tremendous challenges on the jobs front for some time to come.

"While I think there is room to be optimistic that the worst might be over in terms of gross domestic product, I still fear that we are going to see 10 per cent unemployment in Canada," he said.

"Employers initially start ramping up output again by getting their existing employees to work more hours and by taking advantage of whatever productivity improvements are available. And you need enough economic growth to exhaust both of those avenues before employers return to a state of wanting to hire more workers."

That means Canada's job market may not recover until the economy has seen at least two years of positive GDP growth. "In both the early '80s and the early '90s, it was a matter of years, not a matter of quarters, after the recession that the labour market remained extremely harsh," he added.

Statistics Canada will release its May employment report on Friday. The consensus forecast is for a net decline of 42,500 jobs, a move that could push the unemployment rate to 8.3 per cent.
In April, the Canadian economy actually created 36,000 net positions – a surprising gain that was mostly fuelled by a surge of self-employed individuals. That increase left the national unemployment rate unchanged at 8 per cent, a seven-year high.

At the time, the positive job number baffled economists, who had predicted, on average, a loss of about 50,000 jobs for that month. While it is not yet known whether more Canadians joined the ranks of the self-employed in May, some economists consider the trend to be "disguised unemployment." Despite April's increase, overall employment has plummeted by 321,000 since peaking last October.

Statistic Canada's GDP report, meanwhile, said lower business investment in plant and equipment led to "a sharp decline" in exports and imports.

"Business investment in Canada fell at the fastest rate since 1982. Final domestic demand was down 1.5 per cent as personal spending, particularly on durable goods, continued to decline," the federal agency said. "Corporate and personal income also fell in the quarter."

Adjusted for inflation, GDP dropped by 1.4 per cent in the first quarter, "the largest quarterly decrease since 1991," StatsCan said

Courtesy of Toronto Star

Tuesday, May 19, 2009

Keep The Invoices

Improper input tax credit (ITC) documentation is one of the main reasons for GST/HST reassessments. Proper invoices to support ITCs are required by Canada Revenue Agency auditors.

For example, the input tax credit may be disallowed if only the credit card slip is provided
rather than the actual invoice. The supplier’s GST/HST registration number should be printed
on the source document. Some clients use credit card receipts, bank statements, and cancelled
cheques to substantiate the GST/HST input tax credits. However, none of these documents show the supplier’s GST/HST registration number.