Wednesday, March 28, 2018

FEA (Family Enterprise Advisor) Program + Designation

FEA (Family Enterprise Advisor) Program + Designation 

Always focused on providing more to our clients, now and in the future, Peter Andreana is working towards adding to his list of designations by completing the FEA program. 

Achieving this designation represents the pinnacle of professional expertise in the field of family enterprise advising. With Peter’s new technical skills, he will be able to provide a more sophisticated level of understanding to business families and their unique challenges, while taking into consideration a broader spectrum of family enterprise-specific issues.

How will it further benefit you and your business? Peter has the ability to help you with… 
  • Business Family Dynamics and leadership transitions (How to help ensure the “kids” are ready to take over and the family still gets along) 
  •  Family Enterprise Strategy including transgenerational wealth (Do the “kids” know how to manage the wealth they will inherit) 
  • Business Boards and Family Councils (facilitating successful decision making and educate the next generation on wise decision making) 
  • Multi-disciplinary Advising (Bridging the gap between the lawyers, accountants and tax advisors) 
  • Continuity Planning (Exploring both the technical and human side of the succession process) 

Skills needed to achieve the FEA designation: 
  • In-depth experience across multiple disciplines 
  • High emotional intelligence – able to handle the complexity of inter-family relationships 
  • Offer resourceful insights that can significantly improve the growth of your business while bringing harmony to your family 

An advisor with the FEA designation exemplifies the trust, understanding and skills required by business families. Once attained, you can be sure that Peter has grown his skill set in family business advising to deliver better solutions to you and your business.

Grow your knowledge and grow your business. Contact Peter Andreana today for more on how he can help advise you.

Peter Andreana CFP, EPC, FMA, CSWP ™, B.A., Econ
Business Owner Specialist

“Families are complicated. Successful businesses have complex technical requirements. Multi-jurisdictional, multi-generational, enterprising families need help structuring their unique process for continuity. The FEA Program focus helps inter-disciplinary professionals to combine their expertise and deliver successful integrated decision making within the family, the business, and the ownership circles. The FEA Program is an excellent educational segment to round out technical expertise and provide a diverse lens that is necessary in solving our clients’ complex continuity plans.”
Susan St. Amand, CFP, CLU, CH.F.C., TEP, FEA, ICD.D

Friday, March 9, 2018

15 Ways The 2018 Budget Will Affect Your Wallet


Here are 15 ways the budget will affect your wallet.

1. The government is turning the Working Income Tax Benefit into a new Canada Workers Benefit (CWB). The changes mean that if you are single and earn $15,000 or less in 2019 you may earn an extra $500 per year. In the past you had to check a box on your return to apply, but this is no longer the case. You will now be automatically enrolled.

Individuals who are eligible for the Disability Tax Credit may also receive Canada Workers Benefit Disability Supplement. The budget also proposes that the maximum amount of this supplement will be increased to $700 in 2019. It will be phased in at $24,111 for singles without dependents and will disappear at $36,483 for families.

2. The Canadian Child Benefit will be indexed to inflation starting July 2018.

3. In the previous budget you were able to take additional time off for parental and caregiver care and get the EI Caregivers Benefit. This has now been extended to include maternity and sickness benefits.

4. You will be able to open an RESP and claim the $500 Canada Learning Bond grant at the same time that you apply for a birth certificate for your child. This will automatically enroll children born into low-income families for the grant.

5. As of June of 2019, the government will offer five additional weeks of “use-it-or-lose-it” EI Parental Sharing Benefits when both parents commit to sharing parental leave. It’s available to all two-parent families, including adoptive and same-sex couples. If you’re going for the standard parental leave option of 55% of EI benefits over 12 months, you’ll have a total of 40 weeks of leave instead of just 35. As well, where families have opted for extended parental leave at 33% of earnings for 18 months, the second parent would be able to take up to 8 weeks of additional parental leave.

6. Canada Student Grants and Loans has expanded eligibility for part time students, as well as full and part time students with children, and introduced a three-year pilot project that will provide adults returning to school on a full-time basis after several years in the workforce with an additional $1,600 in grant money starting Aug 1, 2018.

7. A new Apprenticeship Incentive Grant for Women would give women in male-dominated trades fields $3,000 per year of training (or up to $6,000 over two years). Almost all Red Seal trades are eligible.

8. The government will invest $90.6 million over the next five years to combat tax avoidance.

9. The government is going to lower taxes on small businesses from 10.5% to 9% in 2019, while making sure the small business tax rate is not being used for personal advantage. Going forward, there is a $50,000 threshold on passive income held in corporations. When passive income reaches $150,000, a business owner will lose the Small Business Tax Rate. They’ll be taxed as a large corporation at that time. The government numbers show that it’s only the top one per cent of income tax filers whose corporations will be affected by the changes but this change will still reap a windfall for federal coffers. With recently announced changes to income sprinkling, the government expects to raise $925 million per year by 2022.

Who should worry about the passive income thresh holds? Anyone who has over $1 million in passive investments in their corporation because they will no longer receive the full benefit of the small business tax rate. (Note, this $1 million in passive investments is the accumulated value in your corporation.)

10. The CPP death benefit is now $2,500 for all eligible contributors (whereas before it was pro-rated.)

11. The Medical Expense Tax Credit is extended to psychiatric service dogs in order to help Canadians cope with conditions like post-traumatic stress disorder (PTSD). This is directly aimed at benefitting veterans and others in the disability community who rely on psychiatric service dogs.

12. The government will introduce legislation for the Pension for Life plan, which will include benefits to support Canada’s veterans. The benefit would recognize pain and suffering caused by a service-related disability up to a maximum amount of $2,650. Another option is income replacement for veterans who are facing barriers returning to work after military service at 90% of their pre-release salary. Pension For Life means that a 25-year-old retired Corporal who is 100% disabled would receive more than $5,800 in monthly support, a 50-year-old retired major who is 100% disabled, monthly support would be almost $9,000.

13. Cigarette taxes are going up again—from 54 cents to 60 cents per five cigarettes

14. As expected, there will be a tax on cannabis as well, which depends on whether the plant product is a seed, flower, trim or seedbag. In the meantime cannabis growers and manufacturers will be required to obtain a cannabis license from the CRA and remit the excise duty where applicable. Details to come at the time when non-medical marijuana becomes available for legal retail sale.

15. If you have a Health and Welfare Trust you need to convert it to an Employee Life and Health Trust by the end of 2020.

For more information on the 2018 budget, visit

Thursday, March 8, 2018

Golombek's thoughts on new passive income rules

The Liberal government’s third federal budget promises more help for the middle class, workplace equality, a boost for tomorrow’s economy and a fair tax system.

But, for all those promises, “there’s not a lot there for the average individual, and not a lot of changes from a personal tax perspective,” says Jamie Golombek, managing director for tax and estate planning at CIBC Financial Planning and Advice. He notes there are also “very few changes in credits.” (There’s the Canada Workers Benefit for low-income workers, previously the Working Income Tax Benefit, and the expansion of the tax credit for those who rely on psychiatric service dogs.)
As a result, the big ticket item of Budget 2018 is “how the government will deal with passive investment income inside a private corporation,” says Golombek. The news on this front “will be welcomed by private business owners in terms of the proposed change.”
In short, “the government has decided to approach the entire issue of private corporation taxation of investment income in a new light,” he explains. “Instead of taxing the investment income above the $50,000 threshold at a highly punitive effective rate of as high as 73%—as previously announced back in October 2017—the government has taken a different approach.”
Instead, “once you have passive income [of more than] $50,000 annually in your corporation, then [the government is] going to restrict access to the small business deduction in the current year. This starts in 2019.”
Under current rules, says Golombek, “we have a small business rate on the first $500,000 of active business income; that’s a very low tax rate. So, what the government is saying is once you’ve accumulated [more than] $50,000 of passive income, [they’re] going to reduce the small business deduction by 5% for every dollar over that threshold, until you get to $150,000 of passive income.”

The new math is very simple: “you take that $150,000, less the $50,000 of passive income. You then get $100,000 of extra passive at 5%; there’s your full $500,000 of small business deduction eliminated,” he adds.
The effect of this change is “business owners will no longer be able to retain income inside the corporation taxed at low rates, once they’ve got a certain amount of retained earnings that [are] earning an annual passive investment income,” says Golombek.
On the upside, “you do have full grandfathering of all retained earnings that are already in there; you could [have been] saving that for investing, retirement or other purposes,” he adds.
Business owners won’t love this development, says Golombek, but it will be welcomed nonetheless, given it’s “much simpler” than what was previously proposed.
Going forward, as of 2019, Golombek predicts the number of businesses that claim the small business deduction will drop—but not significantly. “The government estimates that less than 3% of business owners would have [the] type of retained earnings that are subject to potential clawback,” he says.
There may be viable strategies that you can use to get around the $50,000 annual limit, suggests Golombek.
1.       This could include “investing in buy-and-hold strategies that report no income. [In that scenario], you’d only face a clawback in the year that you sold a particular investment and realized a capital gain; of course, capital gains are only 50% taxable, and that’s also beneficial toward the $50,000 limit,” he notes.
2.      Also, business owners of private corporations could consider the use of permanent corporate-owned life insurance. “For example, exempt policies that effectively accumulate inside the policy and [do not] generate any annual investment income.”
3.      Peter's Thoughts: left out of this article for a 3rd tax strategy to explore is the Individual Pension Plan (IPP).  An IPP can allow a business owner take significant wealth out of a company today and defer all the tax until it is time to withdraw the funds. (When withdrawals occur, they are taxable at your income and tax rate at that time, and under current rules income splitting is allowed)