st-arnaud-pinsent-steman

Partner announcement

Tue, 27 Jan 2026 00:00:44 GMT

Partner announcement

It brings us great pleasure to announce a new partner at St. Arnaud Pinsent Steman. Effective January 2026, we proudly welcome Principal Michael Unger as partner within our firm.

He will be joining partners Jeannette Adams and Monique Andrie, operating under JAM Accounting Group LLP. As a client, you should see very little operational change. We have the same great team, the same vision and values, and the same customer focus.

Allow us to provide a brief introduction for those who haven't had the pleasure of meeting our newest partner.

Introducing Michael Unger

Michael Unger began articling at St. Arnaud Pinsent Steman under John Pinsent, FCPA, FCA, ICD.D in March 2015. He received his Chartered Professional Accountant designation in February 2019 and progressed quickly within the firm establishing himself as a highly respected and reliable professional.

Michael brings diverse experience to benefit his clients in many industries. He excels in providing superior customer service with timely and precise work with a passion for building client relationships and adding value to support their success.

Outside of work, Michael has experience volunteering with local not-for-profit organizations and enjoys spending quality time with his family, including his wife and two young children.

CRA Business Authorizations

Wed, 23 Jul 2025 22:08:58 GMT

CRA Business Authorizations

Introduction

The CRA is increasingly pushing all interactions online. Most importantly, they are transitioning mail such as Notices of Assessment to online mail only. It is getting quite important for all business owners to have direct access to their CRA accounts online.

Registering for a CRA MyBusiness Account

You must first register for My Business Account and enable email notifications. Clients who are already registered for a personal MyAccount can sign into My Business Account using the same username and password.

Once registered, you must add your company business number to your CRA account to link your personal My Account with your corporate MyBusiness Account. Clients can only add the business number if their name and social insurance number (SIN) match the information the CRA has on file for the business.

To complete this registration, you may need to have your most recent tax or GST return handy to answer their verification questions, although there are other options.

Adding a representative

Once you have a MyBusiness account set up with the CRA, the steps to authorize an accounting firm through your online account are straightforward.

Steps to add your accounting firm as an authorized representative:

Sign in to your company My Business Account
Under your company Profile , scroll down to the Authorized representative(s) section.
Click on Add to authorize a new representative and follow the prompts on the screen.
You will be asked to type in the representative’s identification number. For an accounting firm, this will be the firm’s business number which your firm will provide to you.
Under the areas of authorization section select All accounts
Under the authorization details section select Level 2 access , with no expiry date.
Confirm the details and submit.

References

For more information on how to register and enable email notifications, please refer to the following links on the CRA website:

· How to Authorize a Representative

Other relevant Video links

CRA Personal Authorizations

Wed, 23 Jul 2025 22:05:24 GMT

CRA Personal Authorizations

CRA changes

As of July 15, 2025, the CRA has changed its rules around the authorization of representatives. Going forward, individuals will need to add/confirm their accounting firm as an authorized representative themselves through their personal CRA My Account online.

Steps to add your accounting firm as an authorized representative:

Sign in to your personal My Account
Under your Profile , scroll down to the Authorized representative(s) section.
Click on Add to authorize a new representative and follow the prompts on the screen.
You will be asked to type in the representative’s identification number. For an accounting firm, this will be the firm’s business number which your firm will provide to you.
Under the authorization details section select Level 2 with online access and no expiry date.
Confirm the details and submit.

Once submitted, the firm will have authorization to access your account details and talk to the CRA on your behalf.

Registering for a CRA Account

If you do not already have a CRA My Account set up, you will first need to Register for a CRA Account before completing the steps above. The CRA link provided has detailed step by step instructions on how to register for an account. You may be required to answer a few verification questions upon registering for a CRA account. Once you have your CRA My Account set up, you can refer to the steps above to authorize your accounting firm as a representative.

To complete this registration, you may need to have your most recent personal tax return handy to answer their verification questions, although there are other options.

References

For more information on the recent changes and how to authorize a representative, please refer to the following links from the CRA:

· Changes to Authorized Representatives for individuals

· How to Authorize a Representative

Personal income tax news - March 2024

monique@sps-ca.ca (Monique Andrie) — Sun, 23 Mar 2025 03:51:00 GMT

Tax updates - new policies and programs, helpful links, and some uncertainty!

What’s new for 2024 personal taxes?

There has been quite a lot of tax uncertainty this year again! We have compiled a short list of issues that could affect our clients’ 2024 personal income tax filings, for your information. Some of this is good news! Please have a quick read and see what might apply to you, so that you can discuss with your tax preparer.

New benefits, credits and programs

Charitable donations made up to February 28, 2025 can be applied to your 2024 tax return. However, be sure to keep track of your donations to avoid claiming them twice.
The First Home Savings Account plan is great for first time buyers. If you qualify , you should immediately open an account. You don’t need to deposit funds, you just need to open the account to start building your annual participation room for the future.
Home Buyers’ Plan limits have increased from $30,000 to $60,000, and the repayment timelines are extended with to start in the fifth year after the withdrawal.
Secondary suites: A new loan program is launched to provide low-interest loans up to $80,000 for building secondary suites
Loan forgiveness for education loans for doctors and nurses practicing in under-served rural and remote communities. Stay tuned for similar programs to support other health care professions.
Alberta is calling: Moving bonus - A one-time tax credit for individuals in skilled trades who move to Alberta
Multi-generational home renovation tax credit : tax credits for homeowners who renovate to create a secondary suite for a qualifying individual.
GST charged in error during the GST tax break can be claimed using GST189 rebate form.

CRA policies and practices

The CRA is transitioning to online-only communications, whether we like it or not. Please get prepared by setting up your MyAccount access. We recognize that the process can be frustrating – here are some new options to register .

The CRA has also engaged in some large data collection activities.

New legislation requires reporting on reportable sellers from digital platform operators to the CRA. The first required reporting is for 2024, due Jan 31 2025, and will give the CRA a wealth of data to explore for potentially unreported income. If you sold products or services online in 2024, please consider reporting this as self-employment income. Remember you can deduct related expenses.
The CRA has also started to investigate and request data from cryptocurrency trading platforms. To date, only one trading platform ( Coinsquare ) has been audited, but expect more to come. If you sold cryptocurrency in 2024, that is almost certainly a taxable transaction. Be sure to understand your transactions and keep a record for potential CRA audits.

Interest and penalties

The CRA has been more active than usual in applying late penalties. On top of penalties, interest rates on late instalments and taxes ranged from 8% to 10% in the last 15 months. Specific penalties to be aware of:

Foreign income verification statements reporting specified foreign property costing more than $100,000 are due Apr 30, and late filing / missed filing carries a $2,500 penalty.
TFSA contribution limits: Over-contributions to a Tax-Free Savings Account can result in a surprisingly large penalty if you withdraw and recontribute without waiting for a year to pass.
Instalment interest is charged where you were required to pay instalments, and paid less than the required amount. The difficulty is that the “required amount” is determined by a combination of your 2023, 2024 and 2025 taxes, some of which is unknown or an estimate.

Useful tools and links

Determine if your medical expenses are eligible for a tax credit.
CPP calculator can help you decide when you want to start drawing CPP.
Received a call from the CRA? Verify if it's really the CRA contacting you.
Underused Housing Tax has not gone away, but the scope of who is required to report is now much smaller. See this helpful quick reference chart to confirm if you are required to file.
Automobile deduction limits are increased overall, including an increase to the per-kilometer rate to $0.72/km, and an increase to the deductible cost to $38,000.
Learn about your taxes – A new educational page for young people or new Canadians
Life event hub, including what to do when someone dies , which provides more general federal program guidance compared to the CRA’s tax-specific page: Doing taxes for someone who died
Disability Tax Credit : If you are considering applying, these videos are a great guide. Applications are taking 10-18 weeks to process, and the tax credit can only be applied to your tax returns after the application is approved. Note that you can apply on behalf of parents or others, and that you are able to apply retroactively for a deceased individual.
Home office expenses information for employees: In general, home office expenses are only deductible to employees if the employer provides a T2200 and you meet certain conditions.
Travel and vehicle expenses are often examined by the CRA, and a good travel log is an important to have. Options: Paper! MileIQ QuickBooks Mileage Tracker Hurdlr Triplog
Find out what documents you need to keep in the event of a CRA request for support. CRA released a Tax Tip ( You asked, we answered! Here are answers to six more of the top business tax information questions ). CRA responded to the question of what is considered a receipt advising that an acceptable receipt must include all of the following:
the date of the purchase;
the name and address of the seller;
the name and address of the buyer;
the full description of the goods or services purchased; and
the vendor’s business number if the vendor is a GST/HST registrant.

Real property: Buying, selling, renting and renovating property

There has been a lot of attention and policy activity on housing. Please be sure to provide full info to your preparer so that we can look out for opportunities and challenges.

There are several new loan and credit programs (see above section) to support building of separate and secondary suites. However, these may affect your access to the principal residence exemption in the future.

Rules around short-term rentals are getting increasingly complex, and tax deductions for expenses are only permitted if your rental complies with all local regulations. Please be sure to tell us if your rental property is renting for periods less than 90 days, and check your municipality’s specific rules. For example: City of Edmonton business license

The British Columbia government has a host of new rules around buying, selling and owning property in BC. If this applies to you, please be aware.

The US tax system is also changing with respect to buying and selling real estate. If this applies to you, please be aware and seek professional advice in the jurisdiction of the property.

The US tax system is also changing with respect to buying and selling real estate . If this applies to you, please be aware and seek professional advice in the jurisdiction of the property.

Things we don’t know

There is quite a lot of legislation that is stuck having been passed by parliament, but has not having received Royal Assent. CRA administrative policy is being updated from week to week to give us a little more certainty on filing. Key points are:

The increase in capital gains inclusion from 50% to 2/3 is delayed until at least January 01, 2026 (for 2024 capital gains, 50% of the gain will be taxed at your personal tax rate).
Lifetime Capital Gains Exemption is being administered at the higher limit of $1.25M for dispositions on or after June 25, 2024, but there is some risk associated with filing on that basis.
Trust and bare trust reporting requirements are still unclear and influx. Our general advice to clients is to consider resolving any bare trust / deemed bare trust situations, unless there is a fundamental ongoing need for that trust relationship to exist.

Expanded Trust Rules

Wed, 06 Mar 2024 00:34:13 GMT

Introduction

The Canadian government has been discussing an update to the trust rules since the 2018 federal budget. This bill, C-32 received Royal Assent on December 15, 2022, and as a result, the first trusts affected are those with December 31, 2023 year ends. Previously bare trusts were not subject to these rules, but that has changed in 2023. We especially recommend reading through the bare trust section and going through the questionnaire in that section – there are many situations in which people do not know they have a trust arrangement but the CRA requires them to file a return!

Failure to file a required trust return carries penalties either as a percentage of tax payable by the trust, or a per diem penalty if there is no tax payable. This starts at $25/day and caps out at $2,500. Trust returns for 2023 are usually due March 31, but since this is a weekend in 2024, the true due date is April 2, 2024.

What is a Trust?

A trust is not a formal entity like an individual or a corporation, but is rather a relationship between the various parties involved. It is considered a separate taxpayer for tax purposes and has to file an annual T3 return (similar to how an individual files a T1 and a corporation files a T2). A trust has at least three separate entities as follows:

Settlor: This is the person that contributes the initial trust property and defines its intended use to the trust.

Trustee(s): The legal owner(s) of the property and the person(s) selected by the settlor to manage the settled property. The trustee is the person responsible for filing the T3 return.

Beneficiary(ies): Beneficiaries can be either income or capital, and these are the people (or other entities) that will receive the income or capital of the trust. They do not have legal or title ownership of the property.

A fourth group may exist only in some trusts, and are called Controlling Person(s). These are people that have the ability to influence the trustee.

Some people may fit more than one of these roles.

Who has to File a Trust Return?

The CRA has expanded the trust rules to include a lot of relationships that were previously not required to file. All trusts that previously had to file a return still have to file in 2023 and beyond; no changes there. New however, is that all express trusts excluding listed trusts have to file a T3 return. An express trust is defined by the CRA as “a trust created with the settlor's express intent, usually made in writing.” Do note that not all trusts have a formal trust deed so express trusts cover most trust arrangements.

Listed trusts are found in the Income Tax Act (Canada), in paragraphs 150(1.2)(a) to (o) . Of note, exceptions include:

Trusts in existence for less than three months at the end of the year
Trusts that hold under $50,000 of assets and the trusts are composed wholly of a list of specific assets (including cash, publicly traded securities – for the full list, please click here and look under 2.3). Various parties have issued caveats when trying to rely on this exemption, as gold silver or even dividends receivable may put the trust offside.
Trusts required by the laws of Canada or a province to hold funds (e.g. lawyer general trust account). Note that specific client accounts are not excluded.
Registered charities
Graduated rate estates
RRSP, RESP, TFSA, etc.

Note that the above summary is not exhaustive, and that the income tax act link or 2.3 of this link should be consulted. The above exemptions do not apply to a lot of bare trusts, which is where most of the new 2023 filings will come in.

Bare Trusts

A bare trust is not defined in the Income Tax Act (Canada) but is an arrangement where the trustee acts as an agent for all of the beneficiaries. Generally this means that the trustee holds the legal property but has no responsibilities. There is likely a bare trust arrangement if there is a difference between legal and beneficial ownership ; this may require a closer look to determine if a trust return is required. There are a multitude of non-tax reasons why a bare trust arrangement exists (a few examples are provided below) – we recommend consulting the attached questionnaire for more examples, and whether your specific situation may require a filing.

A parent is on title for a child/grandchild’s home or bank account
Only one spouse is listed as an owner of a property when both are beneficial owners
Any assets held by one person on behalf of another
Corporate bank account opened by shareholders or vice versa
Corporation’s real estate or other assets are legally owned by a shareholders or vice versa
Any joint venture
Certain cost sharing arrangements and partnerships
Legal or real estate trust accounts for specific accounts (general trust accounts are fine)

Most bare trusts do not have legal documents, and therefore there is no name for the trust. CRA’s recommendation is to name it after the beneficial owners in alphabetical order with “trust” at the end. For example, two beneficial owners named Mr. Smith and Mrs. Doe would be called the Mrs. Doe, Mr. Smith Trust.

The CRA has provided a relief of penalties for 2023, and it only applies to bare trusts. They say that this is due to adopting an education-first approach. Note that this does not apply to late filings made on purpose or as a result of gross negligence.

Schedule 15

All trusts have to fill out a new form, Schedule 15 – Beneficial Ownership Information of a Trust . This must be filed with a T3 return and cannot be sent in by itself. This schedule looks to identify all trustees, settlors, beneficiaries, as well as anyone who has the ability to control the trust. The CRA refers to these collectively as “reportable entities.”

So What to Do?

1) First consult the attached questionnaire to see if you need to potentially file one or multiple trust returns. You can ask your accountant to confirm if they agree with you.

2) Register for a trust number. Instructions HERE .

3) Provide the trust number and the details of the trust to your accountant for the filing of the T3 return, including the new schedule 15. To simplify things, please fill out the attached Excel document with as much information as you have.

Conclusion

This blog post is not exhaustive but it rather serves as an introduction to 2023 trust rules and how it may potentially affect you. Please refer to the resources below for further details, or contact our office at 780-448-0399 if you have any questions. We are also able to prepare the T3 return and schedule 15 on your behalf.

Resources

Downloadable Questionnaire

Trust Reportable Entities Worksheet

CRA Trust FAQ: https://www.canada.ca/en/revenue-agency/services/tax/trust-administrators/t3-return/new-trust-reporting-requirements-t3-filed-tax-years-ending-december-2023.html

CRA T3 Guide: https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4013/t3-trust-guide.html#P181_16897

Income Tax Act: Paragraphs 150(1.2)(a) to (o): https://lois-laws.justice.gc.ca/eng/acts/I-3.3/page-146.html#docCont

How to register for a trust number: https://www.canada.ca/en/revenue-agency/services/tax/trust-administrators/t3-return/application-trust-account-number-how-apply.html#wb-cont

CPA Canada’s Blog Post: https://www.cpacanada.ca/en/business-and-accounting-resources/taxation/blog/2022/october/new-rules-for-trust-reporting-are-coming

Bill C-32: https://www.parl.ca/DocumentViewer/en/44-1/bill/C-32/royal-assent

Partner announcement

Mon, 01 Jan 2024 23:24:01 GMT

Partner Announcement

It brings us great pleasure to announce two new partners at St. Arnaud Pinsent Steman. Effective January 2024, we proudly welcome Principals Jeannette Adams and Monique Andrie as esteemed partners within our firm.

In this new phase, clients of founding partner John Pinsent will continue to benefit from his expertise, alongside the invaluable contributions of Monique and Jeannette.

As a client, you should see very little operational change. We have the same great team, the same vision and values, and the same customer focus. This collaboration ensures continuity in service and maintains the high standards of professionalism you've come to expect from our team.

You may notice subtle differences such as updated letterhead and the inclusion of Jeannette and Monique's names on official documents, including engagement letters, financial statements, and assurance reporting. Moving forward, reports issued from January onward will bear the signature of JAM Accounting Group LLP, the licensed partnership established by Jeannette and Monique.

Allow us to provide a brief introduction for those who haven't had the pleasure of meeting our newest partners.

Introducing Jeannette Adams and Monique Andrie

Jeannette Adams

Jeannette Adams embarked on her professional journey with St. Arnaud Pinsent Steman in 2012 as an articling student. After receiving her Chartered Accountant designation in 2014, she quickly progressed within the company, assuming the role of manager before attaining the status of Principal, a position she has held for three years.

Her professional forte spans a diverse spectrum, including leading the assurance practice for the past two years. Jeannette thrives on client interactions, fostering strong connections and delving into the core of their businesses, perpetually driven by a passion for understanding and enhancing their operations.

Outside the office, Jeannette volunteers as Treasurer for community organizations in Leduc, plays community league volleyball, and is Mom to two young children.

Monique Andrie

Monique came to St. Arnaud Pinsent Steman in 2016, leveraging her diverse industry expertise into an accounting career. Armed with a Bachelor of Science degree and a twelve-year tenure in consulting for provincial and municipal governments, she transitioned to accounting, swiftly attaining her CPA designation in 2018 while articling under John Pinsent, FCPA, FCA, ICD.D.

As Principal for three years, Monique's professional footprint encompasses leading audit and review teams, onboarding new clients and leading organization change. Monique has a passion for hearing and discovering the stories behind the numbers. Puzzles are her jam!

Outside the office, Monique volunteers with community and sports organizations, keeps up with a teenage stepson, and loves taking her dog for hikes.

Underused Housing Tax

Fri, 04 Aug 2023 21:46:58 GMT

Update for 2023

Note that the below information now only affects the 2022 filing year, or 2023 if you are not relying on the specified Canadian corporation/partnership/trust exemptions (which is a majority of Canadian residents). For 2023 and on, those previously relying on one of those exemptions no longer has to file. The source is the Fall Economic Statement 2023 (Link here : scroll down to the Underused Housing Tax section.) Note that while this has not received royal assent, the CRA has updated form UHT-2900 specifies that those exemptions only rely on the 2022 year.

Introduction

The Underused Housing Tax (“UHT”) is a new tax affecting the calendar year ended December 31, 2022 and all calendar years following. All affected taxpayers (including trusts, partnership, corporations) have to determine if they must file a return by April 30 of the following year. Since 2022 is the first year of this new tax, the Canada Revenue Agency will not charge late filing penalties as long as the prescribed UHT form is filed and all balances owing are paid by October 31, 2023.

Failure to file this by the required date will result in a $5,000 penalty for individuals and a $10,000 penalty for taxpayers that are not individuals (e.g. corporations). This amount may be greater should UHT be payable in the year. Interest is also charged on late filed/paid amounts.

About the Underused Housing Tax

The UHT is governed by the Underused Housing Tax Act (“UHTA”) and is the Canadian federal government’s answer to the high house prices in Canada due to speculation from foreign investors. The UHT received royal assent on June 9, 2022 and retroactively took effect on January 1, 2022. This act is aimed largely at non-resident owners of vacant or underused residential property located in Canada. Most Canadian individuals and corporations will not have to pay any tax, but depending on whether they are classified as excluded owners or not, may have to still file an annual return.

The tax payable is 1% of the assessed value of the underused property. Most Canadian taxpayers that must file a form will fall into an exemption that reduces the tax to zero.

The prescribed form that must be filed is UHT-2900, Underused Housing Tax Return and Election Form and is applicable to residential property owned as of December 31 of each year. Each taxpayer must file a UHT-2900 form for each residential property located in Canada that they own. For example, this means that two individuals working in a partnership that owns three residential properties must file six UHT returns.

What is a Residential Property?

Per the UHTA, residential property “means property (other than prescribed property) that is situated in Canada and that is:

(a) a detached house or similar building, containing not more than three dwelling units…

(b) a part of a building that is a semi-detached house, rowhouse unit, residential condominium unit or other similar premises...

Examples of residential property would include (but are not limited to) detached houses, duplexes, triplexes, non-commercial cottages, townhouses, and residential condominium units. Excluded properties would include (but are not limited to) quadruplexes, high-rise apartments, buildings that are primarily commercial, hotels, mobile homes, and various trailers.

Who Has to File the Annual Return?

Taxpayers who own residential property who are excluded owners do not have to file a UHT return. Common excluded owners include the following:

· Individuals who are Canadian citizens or permanent residents of Canada, unless the individual is a partner in a partnership or the trustee of a trust (including bare trusts).

· A Canadian corporation listed on a Canadian stock exchange

· Trustees of a mutual fund trust, real estate investment trust (“REIT”), or specified investment flow-through trust (“SIFT) as defined by the Income Tax Act.

· A registered charity as defined by the Income Tax Act.

There are other excluded owners. Please refer to page 8 of the UHT-2900 form, section 2 of UHTA , under excluded owner, or the attached checklist below. Note that an individual may be considered as a partner of a partnership without their knowledge and thus may have to file a return. See below for examples.

Partnerships

Partnerships are not defined in the UHTA, and thus what constitutes a partnership is a question of fact. Per case law, a partnership must meet three criteria. To quote CRA tax folio S4-F16-C1, “one must demonstrate that two or more persons are:

· Carrying on business

· In common

· With a view to profit”

The folio is linked here . The Canada Revenue Agency (“CRA”) has provided further commentary in the form of questions and answers here .

Due to the risk of large penalties on non-filing, we recommend that everyone who suspects they may be a partner in a partnership file a UHT-2900 form each year.

Who Has to Pay Tax on UHT?

Everyone who has to file a UHT and does not fall into one of the exemptions will have to pay the tax.

Unless there is a non-resident owner, partner, or trustee, most corporations, partnerships, and trusts will be exempt due to being a specified Canadian corporation (less than 10% of votes and value owned by non-resident/non-Canadian citizens), specified Canadian partnerships (each partner is an excluded owner or specified Canadian corporation), or a specified Canadian trust (each beneficiary is an excluded owner or specified Canadian corporation).

Other exemptions at a high level include:

· A new owner of the property who did not own it in the prior nine years

· A property under 90% complete, or a property that is not inhabitable for part of the year

· A property that is the primary resident of an individual, their spouse or common-law partner, or their child attending a designated learning institute

· A property that is rented out to an arm’s length individual or at a fair value to a non-arm’s length individual

This list is only a summary of common exceptions. Please refer to the checklist or the UHTA for details.

Select Examples

Filing a Return

The return can either be filed online or sent into the CRA via mail. For individuals or corporations in Alberta, British Columbia, Manitoba, Saskatchewan, Ontario (except Barrie, Sudbury, or Toronto), the three territories, USA, UK, France, Netherlands, or Denmark, the UHT form should be sent to:

Winnipeg Tax Centre

Post Office Box 14001,

Station Main

Winnipeg, MB, Canada R3C 3M3

Fax: 204-984-5164

All individuals in locations not listed above should send the UHT form to:

Sudbury Tax Centre

1050 Notre Dame Avenue

Sudbury, ON, Canada P3A 5C2

Fax: 705-671-3994 and 1-855-276-1529

UHT Records

Every owner of residential property (whether exempt or not) should keep their UHT records for six years from the tax year to which they are applicable.

Other Matters

Corporations will have to obtain an Underused Housing Tax business number (RU). Corporations or their representatives can register using Business Registration Online .

Conclusion

This blog post is not exhaustive, but it rather serves as an introduction to the Underused Housing Tax and how it may potentially affect you. Please refer to the resources below for further details, or contact our office at 780-448-0399 if you have any questions. We are also able to prepare the UHT-2900 form on your behalf.

Resources

Downloadable Flow Chart

Form UHT-2900

CRA - Introduction to the Underused Housing Tax

CRA - Questions and Answers About the Underused Housing Tax

CRA - Underused Housing Tax Technical Information

Underused Housing Tax Act

Regulations to the Underused Housing Tax Act

CRA - Income Tax Folio S4-F16-C1, What is a Partnership?

Business Registration Online

New Paragraph

Introduction to CRA Login Accounts

Fri, 03 Jun 2022 20:42:24 GMT

It is a good idea for all individuals and business owners to set up access to their CRA personal or business accounts. By doing so, you are able to view important information like CRA mail, account balances, apply for benefits, request information, and more. Each individual and business has one account already set up, but perhaps has not accessed by anyone yet. By knowing your CRA account balance, you can ensure that there are no balances owing that you do not know about, and thus keep unnecessary interest payable as low as possible. Each province has their own log in system, so you may have to make an account for each provincial jurisdiction that you deal with.

The link for CRA My Account (individuals) is here. ( https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html )

The link for CRA My Business Account (corporations, partnerships) is here. ( https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html )

Gaining access to each of these is similar. You can either use the same log in as a “sign-in partner” which includes most major banks or using a CRA username and password. The former is self-explanatory if you have an account, so this blog will focus more on the latter. For most people using the sign-in partner is easier since you do not need to remember another login.

How to Register for an Account

Upon clicking one of the above links depending on your needs, navigate down to CRA Register. The link you require you to enter your social insurance number, which can be found on an old tax return, T4 slip, among others if not available immediately.

The next step will require you to validate your identity. You will need to enter your Postal/Zip code, date of birth, and information from your last tax return. What they request may change from time to time, but currently line 10100 can be found on your 2021 T1 return and refers to employment income. In the past they have asked for different information from a prior tax return.

After filling this out, the CRA will mail a confirmation code to you; this will have to be entered in order to have access to your account. Your accountant will also usually request access to your CRA account though “represent a client”, as this allows them to view CRA notices, view account balances, update addresses, transfer payments, among others.

You will also have to create a CRA username, password, and some secret questions. The CRA has recently added two-factor authentication, so you must either print out a login grid or provide your phone number for an automated text message. You can also add an email address which will alert you whenever new mail arrives into your account - This in particular is very important since this is how the CRA requests information for audits, which usually have tight timelines.

The next blog will focus on the key features of CRA My Account or My Business Account, and how to ensure you are up to date on important information or your CRA obligations.

Updated CRA Numbers, 2022

Fri, 21 Jan 2022 22:15:24 GMT

Happy New Year!

This blog will be a collection of new numbers that the CRA has provided late in 2021 or early in 2022. Many numbers related to taxation are indexed to inflation, which for 2022 is 2.4%. See below for some key numbers, as well as some links for further reading:

Canada Pension Plan (“CPP”)

Maximum annual pensionable earnings: $64,900 (2021: $61,600)
Contribution rate: 5.70% (2021: 5.45%)
Maximum annual employee and employer contribution: $3,499.80 (was $3,166.45)

Employment Insurance (“EI”)

Maximum annual insurable earnings: $60,300 (2021: $56,300)
Contribution rate: 1.58% (2021: 1.58%)
Maximum annual employee premium: $952.74 (2021: $889.54)

Registered Retirement Savings Plan (“RRSP”)

RRSP dollar limit: $29,210 (2021: $27,830)

Maximum Deduction on Personal Vehicles used for Business

Provinces: first 5,000 km: $0.61
Provinces: all km after that: $0.55
Territories: first 5,000 km: $0.65
Territories: all km after that: $0.59

Increased CCA Ceiling on Class 10.1 (Passenger) vehicles

New passenger vehicles purchased after January 1, 2022 will have a ceiling of $34,000 plus sales tax, up from $30,000 plus sales tax. For zero emission vehicles, it has increased from $55,000 to $59,000

CRA Link: All of the items indexed to inflation in the year:

Click here for the link

Canada Emergency Business Account (“CEBA”) Deadline Date Extended

The repayment date has been extended from December 31, 2022 to December 31, 2023.

Tax-Free Savings Account

Wed, 22 Dec 2021 16:24:13 GMT

The Tax Free Savings Account (“TFSA”), established in 2009, is an excellent way for individuals to save money and grow their wealth in a tax-free manner subject to certain conditions. Anyone who is over eighteen years of age (nineteen in some provinces) and has a valid Social Insurance Number can open a TFSA and immediately have access to the full TFSA limit.

TFSA Limit
As of January 1, 2022, the TFSA limit will rise by $6,000, and the aggregate limit in 2022 is $81,500. Any unused amounts in the year can be carried forward to the next year. You can have multiple TFSA accounts with different providers, but the total in these accounts cannot be more than the year’s limit. You or any of your authorized representatives can check your available TFSA room on CRA’s My Business Account or phone the CRA at 1-800-267-6999. Be sure not to overcontribute, otherwise the penalties are very harsh.

Contributions and Withdrawals

Contributions to the TFSA come from after-tax income, and unlike an RRSP, does not grant any tax deductions. On the other hand, withdrawals from the TFSA are also not taxed, and TFSA room is not lost after a withdrawal (but the re-contribution must be made in the next year or later). Banks, credit unions, insurance companies, and trust companies can open help you to open a TFSA account.

Income and Expenses

Investment income (interest, dividends, capital gains) generally is not taxed if generated in a TFSA. The TFSA is meant to be a saving tool however, and not for active trading. There are some cases where individuals who were much too active in their buying and selling were treated as running a business, and thus did not receive the tax-free treatment. On the flip side, any management or investment council fees incurred are not deductible.

Allowed Investments

The CRA provides a list of what investments are allowed in the TFSA (and other registered accounts) here . There are also prohibited investments, which refer to debt of shares in a corporation, trust, or partnership where the TFSA holder owns at least 10% of shares, or does not deal at arm’s length with the entity.

Usage

The TFSA can be used for both long- and short-term saving purposes. It is advantageous to invest within it rather than outside of it due to the tax-free nature. Additionally, it allows for tax-free withdrawal of funds as they are needed.

Remuneration Planning (Salaries vs. Dividends)

Fri, 03 Dec 2021 20:34:41 GMT

In previous blog posts, we discussed the shareholder’s loan and dividends ; in this one, we will follow up on that topic and talk about whether as a business owner, you should take a salary or a dividend at a high level. In theory, you should be indifferent to whether to take a salary or a dividend due to the theory of integration.

How does a salary or bonus work?

A salary or a bonus can be considered as one level of taxation, at the personal level, and is received in the form of a T4 slip. In the case of business, any salary and associated source deductions (CPP, EI, and income tax withheld) are deductible from the business’ net income. On the flip side, the individual receiving the T4 slip will record the income from the slip as a part of the year’s taxable income.

How does a dividend work?

See our prior blog post for a refresher. Dividends are paid from after tax income, meaning that part of the tax is paid in the corporation, and part is paid at the individual level.

What is Integration?

The tax system aims for income from a salary or bonus (as a T4) to be equal to that of a dividend after considering both personal and corporate taxes. Unfortunately there will always be minor differences, so one will have a small advantage over the other and integration will be different depending on which province you reside in. For most situations, the difference is only 0-2% either way.

Other Considerations:

Canada Pension Plan (“CPP”)

Contributions to CPP are mandatory if salaries or bonuses are paid. For business owners, they must pay both the employer and employee portions. Each portion is $3,499.80 using 2022 rates. While it is a useful retirement tool, keep in mind that this is cash locked up until retirement. You should consider whether CPP will be a part of your personal retirement plan.

Registered Retirement Savings Plans (“RRSP”)

Only earned income contributes to increasing your RRSP room, so this is only restricted to salaries in this case. This will be discussed in a future blog post, but RRSPs (or other various Registered Pension Plans), are another useful way to defer taxes and save for retirement.

Penalties and Interest

One of the most painful mistakes to make when dealing with taxes is the late payment of source deductions. The penalty starts at 3% and goes to 10% after being late for only seven days. Interest is also charged at the prescribed interest rate on late payments (as of December 3, 2021, this is 5%). Those paying salaries have to be disciplined in paying their source deductions on time otherwise the avoidable penalties start to add up fast.

Your accountant should be able to help calculate whether a salary or a dividend will be more tax advantageous for you. After considering the numbers, as well as the above, you should be able to decide which remuneration plan is right for you!

Introduction to Dividends

Mon, 08 Nov 2021 19:01:45 GMT

Dividends

Many people will receive at least one dividend at some point in their lives, and sayings like something will pay big dividends are a part of everyday speech. Dividends in Canada are rather complex and unless they have studied them or had the concept explained to them by an accountant, few really understand them.

Dividends are reported on a T5 slip, also used for interest, royalties, and other forms of income. We will refer to the above image when explaining how a dividend works. This will focus on small business tax rate dividends, also known as “other than eligible dividends” or more casually as ineligible dividends, but other types of dividends are discussed below.

Box 10 of the above image refers to the actual amount of dividends; this is what would show up on the Statement of Retained Earnings on a set of financial statements. If you have ever followed a corporate dividend from the financial statements though, you will not see the $18,000 number beside account number 12000 of the T1 personal tax return, but rather box 11’s number of $20,700. This is due to the theory of integration where the tax system attempts to make the income from business (dividends) and employment (on a T4) as close as possible. This increase is called the dividend gross-up; the gross-up rate in both 2021 and 2022 is 15%. This sounds like it is punishing to those who take dividends, but read on.

Dividends are paid out from the after-tax income of a Company. Box 12 represents a tax credit that individuals can add to line 40425 of the T1 personal tax return. This is very close to the amount of corporate tax that has already been paid on this dividend, and box 12 ensures that this amount is not taxed twice.

Types of Dividends

Other than Eligible Dividends

When the corporation pays at least some portion of its income at the Small Business tax rate (usually the first $500,000 of corporate taxable income, but there are special cases which change this number), the dividends that it can pay out are other than eligible dividends.

Eligible Dividends

Eligible dividends are when taxes are paid at the general rate. In this case, the gross up rate is 38%, but there is a larger dividend tax credit due to the higher taxes paid in the corporation. Eligible dividends are more tax efficient than other than eligible dividends for personal tax reasons.

Capital Dividends

To understand capital dividends, think about a capital gain recognized personally (example: sale of a stock held personally); only 50% of the capital gain is added to taxable income. When a corporation recognizes a capital gain, a similar thing happens: 50% of the gain is taxed, and 50% is added to the Capital Dividend Account (“CDA”). The amounts in the CDA can be paid out as a tax-free capital dividend at a later date. Note that this is a complex process and you should talk to your accountant for advice on this.

Foreign Dividends

Foreign dividends are reported on box 15 of the T5 slip. Due to international tax treaties and withholding taxes, there is usually an amount in box 16 as well which represents the amount paid to the foreign government. To avoid double taxation, this tax credit will go into line 40500 of the T1 personal tax return as a direct reduction of taxes payable.

Intercorporate Dividends

A corporation can pay tax-free intercorporate dividends to another corporation that holds at least 10% of the votes and value of the first corporation, and as long as the first corporation has enough “Safe Income on Hand.” The calculation of Safe Income is complex, so it is recommended you talk to your accountant before paying out intercorporate dividends.

New Compilation Standards

Mon, 25 Oct 2021 20:23:26 GMT

New compilation standards, CSRS 4200

CPA Canada has issued a new standard for compilation engagements which affects anyone that previously hired an accountant to prepare “Notice to Reader” financial statements. This is effective for entities (corporations, partnerships, etc.) that have a period/year end on or after December 14, 2021. This blog post will highlight some of the changes, as well as what to expect from your accountant. For further information, please see the management briefing linked at the end of this post.

What is a Notice to Reader?

Financial statements have three levels of assurance, ranging from no assurance for compilation engagements, limited assurance from review engagements, and reasonable assurance from an audit engagement. Compilations before this standard change were commonly know as Notice to Readers (or “NTRs”) since that was the title of page one of issued financial statements. It essentially cautioned readers of the statements that the statements may not be appropriate for their purposes.

What is Changing?

The changes that most people will notice will be:

· engagements with no assurance will no longer be called NTRs, but compilations

· a more comprehensive annual engagement letter

· a new compilation engagement report on page one

· new notes to the financial statements.

There will be a larger focus on the users of the financial statements, so your accountant will ask who expected users of the financial statements are. They will also ask about the “basis of accounting,” which essentially means how various numbers such as accounts receivable or short term investments are valued. There is an example in the link at the end of this post. Your accountant will also get to know your business better with more questions asked during this process. This will have a side benefit of being able to provide better business and accounting advice.

Introduction to the Shareholder's Loan

Mon, 11 Oct 2021 22:08:21 GMT

What is the Shareholder's Loan?

As a business owner, you will hear the term “shareholder loan” thrown around quite a bit by your accountant and maybe wondered what they meant. This concept can have many names including “due to shareholder,” “due from shareholder,” “owner’s draw,” among others. These all mean the same thing and refer to the account(s) summarizing the net financial transactions between the Company and any of its shareholders.

To visualize it, imagine a vertical line (or see the diagram below). Anything on the right side means that you have put more money into the corporation that you have taken out. This means that the Company owes you money; this can be referred to as a credit in the shareholder loan and the result is that you can draw money from the company tax free until the balance is zero (since you are just taking out the money that you put into the Company before).

On the flip side, a shareholder loan debit position (left side) means that you drew out more money from the corporation than you contributed. There are serious tax consequences for leaving the shareholder loan in a debit position for more than one year, discussed below. To reduce it, the shareholder an either repay the loan, or take income in the form of a salary or dividend. The salary vs dividend discussion will happen in a future blog post.

There are rules in the Income Tax Act that prohibit the shareholder loan position from being in a debit position for more than one year, otherwise the CRA will treat it as income not reported. The outstanding amount would have to be added as income in the year it became outstanding (year one of the debit) and taxes will have to be paid. On top of that, there will be penalties and interest from not reporting the income so naturally this is something to avoid. You cannot re-pay the balance the day before your year end and re-withdraw it directly after, since that would count as a “series of transactions” and is disallowed.

What Changes your Shareholder Loan Balance?

Cash withdrawals – Moves to the left in the diagram above (debit)

Payment of personal items with corporate funds – Moves to the left (debit)

Payment of corporate expenses with personal funds – Moves to the right (credit)

Direct cash injection – Moves to the right (credit)

Declaration of salary/bonus/dividend = Moves to the right (credit)

Multiple Shareholders

The CRA rules consider the total shareholder loan for all shareholders. Especially in the case where shareholders are not related, care should be taken to track each shareholder’s draws and contributions to ensure one is not taking advantage of the others. The shareholders should review the shareholder loan at least annually to ensure fairness.

Questions?

The Shareholder loan is a complex topic and planning around plays a large part of minimizing taxes. A professional accountant can help you with an annual plan or with any questions.

The Canada Recovery Hiring Program (CRHP)

Wed, 14 Jul 2021 23:30:16 GMT

Up until June 2021, Companies looking for a wage subsidy could only apply for the existing Canadian Emergency Wage Subsidy (CEWS). Starting in period 17 (June 6 to July 3, 2021), employers can now pick between the higher of either CEWS or the new Canada Recovery Hiring Program (CRHP). Starting late September 2021, employers can only apply for CRHP.

Eligibility

CRHP is a little more restrictive than CEWS is, and is limited to only Canadian-controlled private corporations (CCPCs), Cooperative corporations that are eligible for the small business deductions, and partnerships where 50% of partnership interest is held by employers eligible for CRHP (so either CCPCs or cooperative corps eligible for the small business deduction).

Source: CRA: https://www.canada.ca/en/revenue-agency/services/subsidy/recovery-hiring-program/crhp-who-apply.html

Calculation

Cl ick the following CRA link to calculate both your CEWS and CRHP amount: https://www.canada.ca/en/revenue-agency/services/subsidy/recovery-hiring-program/crhp-calculate-amount.html

What is the Difference between CEWS and CRHP?

CRA Infographic: https://www.canada.ca/content/dam/cra-arc/serv-info/tax/business/topics/cews/nfgrphc_crhp_vs_cews-e.pdf

Detailed Notes on the CRA website on the differences:

https://www.canada.ca/en/revenue-agency/services/subsidy/recovery-hiring-program/crhp-compare-cews.html

How to Read Financial Statements

Fri, 02 Jul 2021 14:54:56 GMT

When people hire an accountant, they are usually looking for two things: financial statements and tax returns. This post serves as an introduction on how to read your financial statements.

In this example, we will follow Sample Corp. through their first two years of business. Click the red button below for a sample set of statements to follow along with.

Statement of Income

See the above sample financial statement, page 4 for a visual example. This can sometimes be called a Statement of Operations, Statement of Revenue over Expenses among other names.

The top portion of this statement details revenues, cost of goods sold, and expenses earned and incurred during the year. Depending on the business, there may be more or less detail as required. Expenses are broken down into categories so track where funds are going each year.

The bottom portion shows "other items" such as exceptional events, interest income, capital gains, foreign exchange, among other. It also shows how much is paid in taxes in the year.

Statement of Retained Earnings

See the above sample financial statement, page 3 for a visual example. This can sometimes be called a Statement of Deficit, Statement of Changes in Net Assets, among others.

The prior year's net income ($67,400) in the example gets added to retained earnings after the year ends. The statement of retained earnings can be thought of as the history of the company's profitability. Retained earnings is also reduced by dividends paid out.

Balance Sheet

See the above sample financial statement, page 2 for a visual example. This is also sometimes called a Statement of Financial Position. Unlike the above two financial statements, this statement does not cover a fiscal year, but is rather a snapshot at a point in time (in the example financial statements above, June 30, 2020).

The first portion shows the company's assets, separated into current and long term assets. Common current assets include cash, accounts payable, prepaid expenses and short term investments. Long term investments can include property, equipment, long term investments, and goodwill.

Below assets are the company's liabilities, once again separated into current and long term. Common current liabilities include accounts payable, GST payable, credit cards, taxes payable, and current portion of long term liabilities. Long term liabilities can include long term debt, loans, or other debt not paid in the next year.

Shareholders' Equity includes the stated value of issued and outstanding shares, and retained earnings from above. Total assets will always equal the sum of total liabilities and equity.

Note(s) to the Financial Statements

There may also be notes following the statement of income. These can include amortization schedules, details of long term debt, or just explanations of certain accounts. In the above example the breakdown of capital assets is broken down into categories.

There may be more statements covered above such as a Statement of Cash Flows. If you have questions about your financial statements, please speak with one of our team members!

Important Deadlines (Corporate)

Wed, 23 Jun 2021 15:02:07 GMT

Important Tax Deadlines

The Canada Revenue Agency and various provincial bodies have set deadlines for the payment and filing of the various taxes, and the number of different deadlines can be overwhelming. Feel free to use this as a reference but note that this is for the most common deadlines and is not exhaustive:

Not knowing tax deadlines can lead to significant tax liabilities

Corporate Taxes

Unlike personal taxes which are based on a calendar year, corporations are able to choose a year end. Each year, corporate income taxes must be paid based on the year’s taxable income.

Filing Deadline: six month after the corporate year end.

Payment Deadline: Two months after the corporate year end. This is extended to three months if certain criteria are met. Smaller corporations generally qualify as long as the corporation and all corporations associated with it do not exceed the shared $500,000 business limit.

For example, if a corporation has a July 31, 2021 year end and did not use its full business limit in the prior year, the payment deadline would be October 31, 2021, and the corporate tax return would be due by January 31, 2022.

Note that once certain tax payable thresholds are passed, then the CRA and/or the provincial bodies may request monthly instalments.

GST/HST

A corporation also gets to choose its filing periods for GST/HST purposes. To keep everything simple, most choose the same period as their corporate year end. Once certain gross revenue numbers are passed, the corporation will be required to file more often.

Annual Filer (gross revenue under $1,500,000):

Filing and Payment Deadline: three months after the GST filing period

Quarterly Filer (gross revenue between $1,500,000 and $6,000,000):

Filing and Payment Deadline: one month after the GST filing period

Monthly Filer (gross revenue between $1,500,000 and $6,000,000):

Filing and Payment Deadline: one month after the GST filing period

Once GST payments pass a certain threshold, the CRA will require instalments otherwise they will charge interest.

Payroll Taxes

Any corporation with employees must pay source deductions once certain thresholds are met. Unlike corporate taxes or GST, payroll is based on a calendar year.

Regular Remitters: Monthly remittances are due the 15th day of the following month.

Threshold 1 Accelerated Remitters (average monthly withholdings between $25,000 and $100,000): Two remittances a month.

Pay period 1st to 15th of the month is due the 25th day of the same month
Pay period 16th to the end of the month is due the 10th day of the following month

Threshold 2 Accelerated Remitters (average monthly withholdings over $100,000): Four remittances a month.

Pay period 1st to 7th of the month is due the third working day after the 7th
Pay period 8th to 14th of the month is due the third working day after the 14th
Pay period 15th to 21st of the month is due the third working day after the 21st
Pay period 22nd to end of the month is due the third working day after the last day of the month

Miscellaneous Deadlines

T4:

T4 Slips (payroll) are due the last day of February after the calendar year

T5:

T5 Slips (dividends, interest, royalties, etc.) are due the last day of February after the calendar year

T4A:

T4 Slips (non-construction contractors, among others) are due the last day of February after the calendar year

T5018:

Information return for construction contractors. This is due six months after the corporate year end.

T1135:

Form T1135 is when the corporation has foreign holdings over $100,000, and it is due at the same time as the corporate tax return.

Sources and Further Reading:

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.htm

st-arnaud-pinsent-steman

Partner announcement

Partner announcement

Introducing Michael Unger

CRA Business Authorizations

CRA Business Authorizations

CRA Personal Authorizations

CRA Personal Authorizations

Personal income tax news - March 2024

Tax updates - new policies and programs, helpful links, and some uncertainty!

Expanded Trust Rules

Introduction

What is a Trust?

Who has to File a Trust Return?

Bare Trusts

Schedule 15

So What to Do?

Conclusion

Resources

Partner announcement

Partner Announcement

Introducing Jeannette Adams and Monique Andrie

Jeannette Adams

Monique Andrie

Underused Housing Tax

Update for 2023

Introduction ﻿

About the Underused Housing Tax

What is a Residential Property?

Who Has to File the Annual Return?

Partnerships

Who Has to Pay Tax on UHT?

Select Examples

Filing a Return

UHT Records

Other Matters

Conclusion

Resources

Introduction to CRA Login Accounts

Updated CRA Numbers, 2022

Happy New Year!

Tax-Free Savings Account

Remuneration Planning (Salaries vs. Dividends)

Introduction to Dividends

Dividends

New Compilation Standards

New compilation standards, CSRS 4200

Introduction to the Shareholder's Loan

What is the Shareholder's Loan?

The Canada Recovery Hiring Program (CRHP)

Eligibility

Calculation

What is the Difference between CEWS and CRHP?

Further Reading

How to Read Financial Statements

Statement of Income

Statement of Retained Earnings

Balance Sheet

Note(s) to the Financial Statements

Important Deadlines (Corporate)

Important Tax Deadlines

Not knowing tax deadlines can lead to significant tax liabilities

Corporate Taxes

GST/HST

Payroll Taxes

Miscellaneous Deadlines

Introduction