As a result of temporary stoppages in the local and global economies, many transportation companies in Quebec have experienced major difficulties. What have been the biggest challenges in this sector?

The onset of the crisis brought about a series of new challenges for trucking companies in Quebec: economic slowdowns, changes in the supply chain, and new measures for cross-border travel. The most significant issue for many trucking companies was profitability and transportation logistics. What makes a trucking company profitable is its ability to manage outbound and inbound delivery logistics.

Profitability of transportation

The transportation industry is highly dependent on the dynamics of the supply chain. Production stoppages for many companies around the world have had an impact on delivery and distribution needs. The decline in the flow of goods, caused by the global economic downturn, has affected the demand for deliveries to and from Canada.

For transportation companies, this meant that it was not uncommon to have a delivery request, but with no guarantee of a return trip with goods, which affected the profitability of a truck trip. As a result, transportation sector companies negotiated higher prices, with some of them having to increase prices by 40% in order to respond to the logistical changes caused by the pandemic.

Today, the impacts of the pandemic on the transportation and distribution sector are somewhat less pronounced in some companies since the production of several goods has resumed. In addition, the transportation sector remains an essential service in our economy.

Labour shortage

However, one of the biggest challenges affecting this sector, which was already very prevalent long before the pandemic, is the labour shortage.

This shortage of truck drivers has more devastating impacts within the sector than the pandemic. Even if companies increase wages, they are not able to meet their market demand. Across Quebec, it is projected that by 2023, there will be a labour shortage in 117 of the assessed occupations, including the transportation sector, where a large number of vacancies will need to be filled.

This labour shortage has rapidly worsened due to the pandemic as many truckers now refuse to make deliveries outside of Canada.

However, international recruitment can solve this problem. Auray Sourcing, one of our subsidiaries, offers Quebec and Canadian companies a recruiting and international mobility service to address the labour shortage issue.

Ensure the longevity of your business in times of crisis

Although transportation and distribution companies have been able to mitigate the impact of the pandemic, particularly thanks to their status as an essential service, this sector still faces significant challenges. In these times of crisis, it is essential to have a well-established plan in place to ensure your business’s sustainability.

Watch the interview with our expert on the new normal in the transportation and distribution sector.

Updated on September 7, 2023

Several questions arise in the case of non-residents who sell real estate in Canada.

In the past year, we have witnessed a significant increase in real estate transactions and, more specifically, transactions involving the sale of properties by non-residents of Canada.

This type of transaction is governed by specific tax rules and this article aims to demystify the role of the various stakeholders in terms of tax compliance.

Non-resident sellers’ responsibilities

Non-residents who dispose of real property located in Canada must notify the tax authorities of the disposition. This notification will enable them to obtain certificates of compliance attesting that everything is in order from a tax perspective.

The notification forms T2062 (federal) and TP 1097 (Québec) are used to determine the capital gain on the sale of the property and the corresponding tax instalment to be paid to the tax authorities to obtain the certificates of compliance. The tax instalment is generally 37.875% of the capital gain for property located in Québec.

Note, however, that the tax instalment to be paid will be higher in the case of a rental property for which capital cost allowance has been claimed in the past and the non-resident seller will also have to file federal Form T2062A.

Non-resident sellers may send this notice before the planned date of sale based on an intent to purchase (future disposition) and no later than 10 days after the signing of the deed of sale (actual disposition).

Non-resident sellers who do not meet this legal requirement may be subject to a penalty of up to $5,000 ($2,500 at the federal level and $2,500 in Québec).

Note: Non-resident sellers are required to file an income tax return by April 30 of the year following the year in which the sale took place to report the capital gain and calculate the actual tax on the capital gain according to the progressive tax table for individuals. If the actual tax is less than the installment paid at the time of the transaction, they can claim a refund for the difference.

Buyers’ responsibilities

The buyer guarantees payment of the capital gains tax instalment. If the seller does not obtain the certificates of compliance prior to the sale, the buyer will be responsible for withholding an amount corresponding to 37.875% of the sale price at the time of signing the sales contract. This amount must be paid to the tax authorities, on behalf of the non-resident seller, within 30 days following the end of the month in which the property is acquired. A buyer who fails to do so becomes personally liable to pay the tax resulting from the transaction. The withholding tax amounts to 80% (50% at the federal level and 30% in Québec) if the property is a rental property.

Central role of the notary and tax advisor

The notary who represents the buyer in the transaction and the tax specialist who is mandated by the seller play a central role in this process.

It is the notary’s professional responsibility to ensure that buyers fulfill their withholding tax obligations and to advise sellers of their responsibility to file applications for certificates of compliance.

The tax advisor explains the importance for the non-resident seller of filing applications for certificates of compliance, which will reduce withholding tax on the proceeds of sale and avoid significant penalties for failure to file the prescribed forms. The tax specialist also assists the non-resident seller in preparing the applications and calculating the capital gain and taxes to be paid.

In conclusion, in real estate sales transactions involving non-resident sellers, the notary works with the sellers’ tax advisor to ensure compliance with the specific tax requirements for this type of transaction.

Our team of international tax experts offers personalized assistance based on the specifics of each transaction. Contact us to speak with one of our specialists.

During this discussion with John Parisella, our President, Emilio B. Imbriglio, addressed the stakes of the U.S. election for Canada.

In the wake of the U.S. elections, on November 4th, as part of the Firm’s One-on-One discussions, Emilio B. Imbriglio, President and CEO of Raymond Chabot Grant Thornton, spoke with John Parisella, Senior Advisor, Strategy and Business Outreach at NATIONAL Public Relations and a leading expert on American politics.

Although the outcome of the elections was still uncertain, particularly for the presidency and the Senate, the observations of the former chief of staff for Robert Bourassa and Daniel Johnson and Quebec’s delegate general in New York City highlighted U.S. policy trends that are likely to emerge. Here is a brief overview of the discussion between the two leaders.

Realistic and optimistic approach

From the outset, John Parisella made a point of stating that his analysis is intended to be both realistic and optimistic. The United States is not the same country of the 1960s, where there were many more divisions, particularly in the areas of civil rights and nuclear confrontation.

John Parisella said: “You might have thought it was the beginning of the end for the country, but the U.S. kept going,” adding that in the ensuing years, the U.S. showed strong leadership on a global scale.

Despite the fact that the results were still pending and would be close, especially in the upper house (Senate) where the Republicans could retain a majority, albeit smaller, Parisella stressed that it will be a transitional presidency, regardless of who is elected.

In his opinion, because of the respective ages of the presidential candidates and the 2022 mid-term elections when the House of Representatives and one third of the Senate will be renewed, a completely different dynamic could be taking place in both parties. “The U.S. will already be in a new election cycle as of 2022,” he said.

Given the issue of mistrust about possible electoral fraud, John Parisella indicated that while there are no historical references, possible interference is not ruled out—for example, via the Internet from foreign governments such as Iran, China or Russia. Nevertheless, John Parisella is confident that the electoral system is well organized. “There are 50 separate elections and each state has its own voting system. […] There may be irregularities, but that’s not proven.”

Mr. Imbriglio asked Mr. Parisella how he envisioned the system of checks and balances. According to John Parisella, the issue of checks and balances applies to institutions, but it also belongs to civil society, which is very active on this front.

“Remember when the President withdrew from the Paris Accord, several states had ongoing climate change initiatives that did not require such an agreement to be carried out. Even some Republican governors are much more open to environmental dialogue than Mr. Trump is,” the expert stated, adding that the media should not be neglected in all of this either, because they make a significant contribution.

Economic and trade impacts for Quebec and Canada

With respect specifically to Canada-U.S. relations, the Firm’s President asked John Parisella about his views after four years of the Trump presidency. Considering that Quebec and Canada are competing with several other states for market share in the United States, Mr. Imbriglio highlighted the United States-Mexico-Canada Agreement (USMCA) and raised the U.S. President’s tax reform, which cancelled out Canada’s corporate tax advantage.

In a word, according to John Parisella, they’re complicated. He added that changes will take place in the economy, especially with the new USMCA. “Yes, we had to make concessions, but it should be noted that the former North American Free Trade Agreement (NAFTA) was concluded before the advent of the Internet. […] We retained what we achieved, saved a lot of what we had and signed the new agreement, with a cross-Canada consensus.”

According to John Parisella, post-COVID economies will face a recovery with different policies than before the pandemic and this will have to be dealt with. “That’s why I use the terms trade diplomacy and economic diplomacy a lot.” Parisella also noted that 70% of Quebec’s exports go to the U.S., something that won’t change.

“You have to be in a constant state of diplomacy, and that’s not just between the White House and the federal government, but between provinces, cities, chambers of commerce, unions, business sectors,” he said. He went on to point out that Quebec is the only province that has as many representatives globally, in 18 countries with 33 representations, including nine in the United States, and that would not change, regardless of who’s in the Oval Office.

In short, even though the results of American elections were not known at the time of the two leaders’ virtual meeting, Parisella expressed optimism about the future of Canada-U.S. relations. “The United States is a highly imperfect democracy […] but a country with which we share prosperity, democratic values and security objectives.”

This dynamic and informative exchange between Emilio B. Imbriglio and John Parisella clearly demonstrated that the strong relationship between the two countries will continue. Thank you, Mr. Parisella, for your insightful, candid and optimistic observations!