In the current environment of rapid transformation and uncertainty, how do you stay agile and anticipate the changes needed to secure your organization’s long-term viability? Dynamic planning can help you achieve this.

Today more than ever, organizations rely on strategic planning to stay the course as they navigate change and uncertainty. Factors like globalization, digital transformation, climate change, the labour shortage, business transfers and the pandemic have all led to major shifts. These factors are reshaping your organization’s internal and external environment, often in significant ways, requiring you to review your business model.

How can strategic planning help you?
What is dynamic strategic planning?
What tools can you employ to make dynamic planning a success?

How can strategic planning help you?

Strategic planning helps you determine the direction where you want to take your business and what you need to do in order to get there. It defines your vision and values, your priorities and goals, and the concrete actions that will help you achieve your goals. A good strategic plan provides members of the organization with clear guidelines, specific objectives and performance indicators to monitor results.

Traditionally, strategic planning covers a period of three to five years, with an annual review. But in a world that is constantly changing, that’s not enough anymore. Businesses can’t afford to ignore change or wait it out to see what happens. They need the ability to adapt on the go. Organizations that fail to respond fast enough risk seeing a decline in their performance.

What is dynamic strategic planning?

The solution is dynamic planning, which combines strategy with flexibility. With dynamic planning, you are able to address immediate concerns while staying aligned with major long-term objectives.

It lets you adjust plans and reorder priorities in response to changes and disruptions. It continually links strategy to execution and generates useful data that can help you make decisions, like the best way to reallocate resources, optimize recruitment or increase sales.

As a result, management and employees are empowered to take intelligent risks, seize opportunities, respond to threats quickly, adopt new technologies and implement new ideas while understanding the impact of their decisions on the business as a whole.

What tools can help you make dynamic planning a success?

Prepare a strategic diagnosis for your business

A 360-degree diagnosis of your business will help you analyze the resources, skills and environment at your organization and guide you in the right direction.

Establish a planning oversight committee

This committee will be responsible for monitoring strategic planning through indicators, evaluating the results and adjusting the action plan when necessary.

Get your organization thinking more cohesively

Dynamic planning forces different departments and teams to break from tradition by leaving their silos behind and function in a more informed and coordinated way.

Use a dashboard

Visual tools and dashboards allow you to keep the entire business informed of performance levels and the progress made toward your goals.

In the current environment, businesses need to plan for flexibility so they can continually adapt to evolving needs without losing sight of their objectives and original mission.

Communicate clearly with your employees

Dynamic planning involves changing practices and reordering priorities. This can be frustrating for your employees if your business is not communicating with them clearly. Help your team understand the reasons and the advantages behind the new approaches, and plan follow-up meetings.

Our experienced team can help you get moving in the right direction by making adjustments to your plans and actions. Contact us for personalized assistance.

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In a recent conversation with our president, Janie C. Béïque talked about engagement, vision and corporate social responsibility.

When deciding whether or not to invest in a company, Fonds de solidarité FTQ looks at certain criteria it considers essential, namely human values and the quality of its management team.

Beyond having solid management skills, today’s leaders need to demonstrate strong leadership through their corporate vision, employee engagement and social responsibility principles, said Janie C. Béïque, President and Chief Executive Officer of Fonds de solidarité FTQ.

“Eighty percent of our decision to invest in a company is based on the management team. We look at their level of dynamism, objectives, action plan, cohesion, vision and values,” she explained during a one-on-one discussion with Emilio B. Imbriglio, President and Chief Executive Officer of Raymond Chabot Grant Thornton.

“Financial partners want to throw their support behind business leaders who are competent, conscientious, thorough, transparent and effective at communicating with stakeholders. Another key consideration is the diversity and complementary skills within the management team,” said Mr. Imbriglio.

The ability to engage employees

Janie C. Béïque believes that business leaders need to be attentive to employee engagement. “An organization’s best asset is its workforce. And, if you want to manage people, you have to have a people-first approach. It’s important that leaders be genuine and show some heart as managers,” said Ms. Béïque, who became the first woman to lead the Fonds in April 2021.

Employee engagement has become doubly important in light of the current labour shortage, the fast pace of technological advancements and the ecological transition. Fonds de solidarité FTQ offers support and consulting services to help Quebec companies overcome these three pressing challenges.

Organizations are faced with the need to make changes “in a structured way or risk losing employees,” said Ms. Béïque. “To promote employee engagement, organizations should be clear about why they’re introducing changes and what their objectives are.” That’s the key to a successful transformation.

For example, a company that introduces automation should reassure employees by explaining how the change will give them more time to work on value-added tasks while enabling them to gain new skills and grow within the company.

Employees also expect senior management to take personal interest in social issues and identify corporate values that are aligned with fundamental social responsibility principles, explained Ms. Béïque.

“It’s extremely important to appeal to the employee experience. People want to work for a company that has values, an organization with a soul.”

This is a major factor in today’s battle for workers, a struggle that is increasingly being played out at the international level due to the shift to remote work.

Helping businesses grow

Ms. Béïque explained that core social responsibility principles have been part of the Fonds’ DNA ever since it was created in 1983. For example, the organization she heads is a signatory of the Statement by the Quebec Financial Centre for a Sustainable Finance, just like Raymond Chabot Grant Thornton.

“We invest in dreams and support management teams with strong values and ambitions. When we decide to back a company, we take it in its current stage and help it grow,” based on its unique set of challenges, Ms. Beïque explained.

She added that the Fonds de solidarité FTQ has several tools to help Quebec companies grow, regardless of their industry, size or geographic region. The organization has a network of 17 offices and regional solidarity funds, 87 local funds and 94 sectoral funds. Its team of investment professionals specializes in 20 different economic sectors.

“The Fonds de solidarité FTQ is a remarkable economic model because of its dual mandate. It aims to generate returns in order to build retirement savings for Quebecers, while also helping Quebec businesses make decisions that will pay off over the long term, not just in the short term,” said Ms. Béïque.

The organization has some 723,500 shareholders and invests more than $1 billion in the province’s economy every year.

Ms. Béïque believes that Quebec entrepreneurs are lucky to have such a robust ecosystem of financing companies behind them. These companies are now working together more than ever before to ensure that businesses of all sizes and from all sectors have access to capital and comprehensive financing that covers their short-, medium- and long-term needs.

“We have complementary strengths, and by working together we’re able to build stronger companies,” she said of Quebec’s financial ecosystem.

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A new income source for the government? How about a new tax on the sale of select goods?

A new “luxury” tax could apply as of January 1, 2022 on the retail sale of new personal cars and aircraft with a retail sale price over $100,000 and new boats with a retail sale price over $250,000. Importing such “designated property” will also be subject to this tax.

Here is a brief summary of the rules for vehicles covered by this new tax.

 

 

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It is possible to transfer funds accrued in a foreign pension plan to Canada with zero tax impact, provided the transfer is well planned.

If you have lived and worked abroad, you may have contributed to a retirement plan. For example, in the U.S., there is the Individual Retirement Account (IRA) and 401(k) and 403(b) plans. However, before you decide to move these retirement savings to Canada, there are several factors to consider. It is therefore important to consult an international tax expert in order to define the strategy best suited to your situation and properly plan the transfer.

Why transfer the funds?

While transferring the funds to Canada is not mandatory, there may be several benefits to this process, such as:

  • Simplifying wealth management by consolidating all retirement savings in Canada;
  • Avoiding complications at the time of death (transferring the funds could be complicated);
  • Avoiding U.S. estate tax and high legal fees at the time of death;
  • Minimizing the risk of exchange rate fluctuations.

Transferring funds to your RRSP

When you become a Canadian resident again, you can transfer a lump sum to your RRSP in Canada. Under certain conditions, you then have an equivalent deduction that does not take into account your RRSP deduction limit.

  • The amount transferred to your RRSP must be included in your taxable income in Canada, but the equivalent amount can be deducted, as is the case with a standard RRSP contribution.
  • To be entitled to the deduction in the year of transferring a foreign plan, you have to make the RRSP contribution no later than 60 days after the end of the year of transfer and the transfer must occur before December 31st of the year you turn 71 years of age (transfers to a registered retirement income fund (RRIF) do not qualify).• Transfers to a spouse’s RRSP are not permitted.
  • In Canada, with proper tax planning, you may be able to recover up to all of the foreign tax by claiming a foreign tax credit. This will avoid double taxation, i.e., not having to pay both the foreign tax and the Canadian tax that will be due when you start withdrawing funds from your RRSP.

Transferring with zero tax impact: Example of a U.S. plan

Let’s say that you have a U.S. pension plan valued at US$100,000. If you withdraw the full amount to transfer it to an RRSP in Canada, you will pay US$30,000 in U.S. tax (30% of US$100,000). You will then have a US$70,000 balance to transfer. Nevertheless, you will be able to contribute up to US$100,000 to your RRSP by designating this contribution as a qualifying transfer (the allowable tax deduction is equal to the total amount withdrawn from your U.S. plan).

Ideally, in order to contribute the full amount allowed, you will also need to have income from other sources, since the U.S. tax authorities will have withheld 30% of the amount from your retirement plan. Note that if you are under age 59 1/2 at the time of withdrawal, you may be subject to an early withdrawal penalty of 10% of the amount withdrawn.

To achieve zero tax impact, you have to be able to claim the highest possible foreign tax credit to recover U.S. tax paid and avoid double taxation. This requires having sufficient other income to report in Canada.

Periodic payments on retirement

Another option is to leave the funds in the foreign plan until retirement and then make periodic withdrawals as permitted under tax rules.

  • Under this option, you cannot transfer the amounts to your RRSP in Canada, unless you have contribution room.
  • The withdrawn amounts are added to your taxable income in Canada.
  • In Canada, you could recover any foreign tax paid by claiming a foreign tax credit on your tax return.

Regardless of the solution you choose, there are several other important considerations to ensure that there is zero tax impact and to avoid double taxation. That’s why solid planning with a tax expert is essential before you start transferring funds from your foreign pension plan.

Do you have questions? Our team of international taxation experts can support you in making the choice and implementing the most beneficial tax strategy. Contact us to talk to one of our specialists.

This article was drafted in collaboration with Julie Barma, Senior Consultant, Tax.