Our webinar on recent developments in Accounting Standards for Private Enterprises (ASPE) that took place on November 21st is now online.

The session will provide an overview of the following, among others:

  • New or revised accounting standards, including amendments to Section 1591, Subsidiaries, and Section 3051, Investments, relating to the cost method;
  • The projects and activities of the Canadian Accounting Standards Board, including the one on redeemable shares issued in a tax planning arrangement;
  • Some practical issues regarding cryptocurrencies.

Each participant will be able to take a test at the end of the session. A training certificate, which applies to training hours recognized by the Quebec CPA Order (OCPAQ), will be given to each participant who passes the test.

Please note that this information session is in French.

Access the session here.

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Christian Menier
Partner | CPA, CA, M. Fisc. | Tax

We regularly hear about RRSPs, TFSAs and RESPs. No, it’s not a series of Scrabble letters; these are three very different savings mechanisms.

How can you make sense of this all? How can you choose what’s right for you? To answer these questions, let’s see what’s behind these letters and look at the main characteristics of each.


The most popular, the Registered Retirement Savings Plan (RRSP) is a mechanism put in place by the tax authorities to promote retirement savings. The contributions permitted in this plan are limited by precise tax parameters based on earnings and contributions made to other retirement plans. The RRSP’s primary characteristics are:

  • Contributions are deductible from income;
  • Income generated in an RRSP is not taxable;
  • Amounts withdrawn from an RRSP will be taxed.


More recent than the RRSP, the Tax-Free Savings Account (TFSA) has its own set of rules. Contributions are limited to a yearly cumulative ceiling, which is currently $5,500. If you have unused contribution room from previous years (since 2009), it will automatically be carried forward. As such, if you contribute to a TFSA for the first time in 2018, you can contribute up to $57,500 in the plan. The TFSA’s other characteristics are:

  • Non-deductible contributions;
  • Income generated in a TFSA is not taxable;
  • Amounts withdrawn from a TFSA are not taxed.


Last but not least, the Registered Education Savings Plan (RESP) allows individuals to make contributions to a plan for with the purpose of funding a child’s post-secondary studies. Annual contributions are not limited, but the cumulative ceiling is $50,000. The RESP’s other characteristics include:

  • Non-deductible contributions;
  • Income generated in an RESP is not taxed;
  • Contributions can be reimbursed to the payer with no tax impact;
  • Earnings, paid in the form of an education assistance payment, are taxable for the plan’s beneficiary (i.e. the child studying).

Contrary to an RRSP and a TFSA, an RESP gives entitlement to government incentives. In fact, the federal and provincial governments provide a subsidy for each child beneficiary of an RESP, from birth until the year they turn 17. The maximum annual financial aid is $750 per beneficiary, that is, 30% of the first $2,500 in contributions paid yearly. Low- and medium-income families can obtain additional assistance. Each child is entitled to a maximum cumulative of $7,200 for federal purposes and $3,600 for Quebec.


To get the maximum savings possible, use each of these financial mechanisms wisely based on your saving ability. Since they have their own advantages, you need to examine their objectives properly in order to prioritize the best plan for you.

Don’t hesitate to contact your tax specialist or financial advisor to make the best investment decisions possible.

22 Nov 2018  |  Written by :

Christian Menier is a partner at Raymond Chabot Grant Thornton. He is your expert in taxation for...

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Financing offers for mergers and acquisitions are highly favourable right now. What steps should you take for a successful process?

There is a lot of capital available in Quebec, so much so that you can negotiate advantageous conditions if you want to acquire another business.

The search for financing must be based on a solid process in order to be carried our smoothly, in the most profitable and least risky way for you. Here are the main steps of the process and our tips for success.

1. Establishing an accurate portrait of your business

Above all, it’s important to have the most complete and accurate view of your business. Make sure you know the sources of its profitability, accurately measure the value of its assets, etc.

2. Assessing the purchase price

The current abundance of capital tends to increase the value of transactions. Various valuation methods can be used to determine the value of a transaction. The best option is to call on a business valuation expert to determine a fair price.

3. Estimating your financial needs and borrowing capacity

You must be prudent and realistic. All lenders evaluate a financing application based on its underlying risk and want to ensure that their clients will be able to meet their commitments in case of unforeseen events.

Therefore, you need to establish different scenarios for your business (for both growth and declines). Our experts will help you develop and validate these scenarios by applying resistance tests to guarantee that you can stay the course in difficult situations.

Make sure you have the necessary funds not only to finance the transaction, but also to support current operations (working capital, capital assets, internal growth projects,

Note that there’s an adjustment period after a transaction, during which the business’s performance may not be as strong as planned. So you will need to inject enough oxygen into your capital structure to get through this period.

You also need to think long-term to ensure that you will be able to refinance your debt once it comes to maturity. For example, ask yourself what would happen if your business was not performing well when the time comes to refinance.

Don’t forget that there are two main types of traditional financing for which lenders use different ratios in order to evaluate your borrowing capacity:

  • Asset-backed financing, especially used for businesses that have significant inventories and assets, such as distributors. Lenders will take into consideration the value of the assets and the fixed charge coverage ratio (to measure the business’s loan repayment ability once it has assumed its current expenses).
  • Cash flow financing, especially used for businesses whose assets are not very high. Usually, two ratios are considered by financial institutions: debt to EBITDA (earnings before interest, tax, depreciation and amortization) and the fixed charges coverage.

This said, lenders may use several other ratios.

4. Soliciting financing

The purchase price, your borrowing capacity and any balance of sale (the portion of the value of the transaction that you will ultimately reimburse to the seller) will determine whether you also need to obtain equity financing from co-investors.

Generally, financial institutions will ask that equity financing represent 35% to 55% of the transaction’s value, entirely injected by yourself or by joining forces with a co-investor.

It is essential to develop a capital structure with an optimal combination of both types of financing that provides you with sufficient leverage for today and in the coming years. However, make sure this leverage is not excessive.

Lastly, we recommend soliciting several lenders and financial partners at the same time to accelerate the process and, the competition will help you negotiate the most advantageous terms and conditions.

Are you thinking about buying a business? Contact our multidisciplinary team. Our experts will guide you every step of the way.

Enjeux PME - acquisition

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Pierre Fortin
Partner | CPA, CA | Management consulting

In addition to the economic aspects, the legalization of cannabis has raised a number of challenges for municipalities since coming into effect.

Ottawa may legislate and Quebec may regulate the sale and distribution, but it’s municipalities that have to manage the local problems.

Municipalities are responsible for services to citizens, such as cannabis selling zones, business permits and building codes. Internally, they have to ensure the implementation of bylaws on the consumption of cannabis in public, impaired driving and workers’ safety, the topic of this article.

Does the municipality have employee policies? Does it have the right tools? Does it have what it needs to inform its employees and raise awareness?

Action rather than reaction

So far, so good… but should the municipality be waiting for the first incidents before introducing an efficient internal policy? Most large municipalities have been proactive, like Montréal, that has trained its police officers to identify signs of impaired faculties. What about small- and medium-sized municipalities? Simply adding a sentence on cannabis in the drug and alcohol policy is probably not enough.

For example, winter is coming and snow removal will result in considerable snow removal equipment moving about on the streets. In the short term, to avoid dangerous situations for citizens, it’s essential to identify high-risk jobs to ensure there is appropriate support to apply a policy on the use of cannabis by municipal employees. Consider the private sector, where some businesses have introduced efficient policies, including, among others, zero tolerance provisions.

Some municipalities have decided to set up special commissions to survey the population about the impacts of cannabis legislation on municipal services.

It’s too soon to know what the consequences will be and have accurate data on the impact of cannabis on our daily lives and, more specifically, high-risk jobs. Nevertheless, it’s up to municipalities to anticipate, prevent and act before something happens.

There are a number of organizations that can support your initiative, such as the Canadian Centre for Occupational Health and Safety or CLSC health professionals. Our management consultants can help you get training and inform your teams and managers.

20 Nov 2018  |  Written by :

Pierre Fortin is a partner at Raymond Chabot Grant Thornton. He is your expert in Management...

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