Groupe Maison de l’Auto implemented a succession plan several years ago to ensure its growth and plan for a change in governance.

Relationships were established in 2012 between the managers of the Maison de l’Auto and our firm’s entrepreneurial succession experts.

A family business

In 1948, Luc Verreault’s father, Oswald, decided to go into business and opened a service station in Saint-Félicien. By applying the organization’s philosophy of always putting the client first, the company experienced outstanding growth and now has numerous car dealerships in Lac-Saint-Jean.

A third-generation family business that is constantly growing, Groupe Maison de l’Auto consists of seven large-scale dealerships offering Chrysler, Dodge, Jeep, ProMaster, Ram, Mazda, Kia and Mitsubishi vehicles.

Recognized for its professionalism, the organization offers an exceptional buying experience and five-start after-sale service.

Preparing the succession and ensuring the organization’s longevity

Luc Verreault began to reflect about the future progressive transfer of the business. He wanted an integrated succession plan built on key factors to support the success of such a process. To reinforce the new governance, he benefited from the assistance of a team of experts covering all aspects: human, strategic, financial and tax.

Luc Verreault’s shareholders were his three children and two non-family members, Jean-Michel Genest and Tony Bonelli. They were all targeted as transferees and the owner therefore wanted to ensure he had all the necessary tools on hand and appropriate work methods to ensure the business’s continuity.

It was with this in mind that the owner called on our firm’s services. Our team of experts, headed by Éric Dufour, the firm’s Entrepreneurial Succession Leader, helped the organization clearly define each person’s objectives and expectations in order to carry out the transfer plan.

Raymond Chabot Grant Thornton - image
Raymond Chabot Grant Thornton - image

Undertaking a diagnosis and setting up a succession plan

Once intentions had been diagnosed and the feasibility analyzed, we were able to implement a monitoring system based on the right agreement and concept, which included coaching on various aspects and the creation of a family council.

Five candidates were evaluated based on the diagnosis and succession plan. We assessed complementary areas and risks in terms of the targeted structure. We also highlighted each candidate’s strengths and weaknesses in order to assign them a strategic position within the organization.

Emmanuelle Verreault, the owner’s daughter and one of the five candidates, was designated to take on the role of Executive Vice-President.

Rethinking governance

The diagnosis brought to light an issue regarding the change in governance. The business model had to be reviewed to ensure greater synergy and foster team work rather than by dealership.

We highlighted various comparable business models in Quebec and mapped competitors, profiles and expertise mixes.

Staying attentive

In addition to the financial and tax aspects, there is a major emotional component in an entrepreneurial succession that has to be skillfully managed. This was all the more so for Groupe Maison de l’Auto because it was a hybrid transfer: family and non-family members. Using a global approach that took into consideration all aspects as well as recognized efficiency tools and practices, we leveraged our experts’ expertise to help the transferor and transferees overcome this emotional phase.

Initiating and maintaining contact with the various parties throughout the process was also critical to guarantee that the process took place efficiently and transparently, while ensuring a smooth transition where all parties knew their role and responsibilities.

Today, we are working with the owners of Groupe Maison de l’Auto to implement and adjust the succession plan. It is a long process that can take up to eight years. Thanks to a unique relationship that transcends the professional context, we can support each player in the transfer process to achieve the objective sought and ensure that this family business keeps on going.

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Mathieu Lendick
Partner | CPA, CISA, QSA | Management consulting

 

Information security is extremely important in business. This is particularly true for financial institutions.

It is crucial that they have a rigorous and efficient evaluation process to rely on as evidence that they meet the compliance requirements they are subject to.

A solid understanding of the applicable standards and frameworks in each situation is essential to satisfy these often complex requirements. The expertise of specialists is invaluable to make sure that such a compliance exercise is carried out correctly.

An exercise requiring know-how

Our IT compliance and audit team recently assisted a financial institution in carrying out all of the activities required to attest to their compliance with Interac Corp.’s security rules.

This was a very complex engagement, as Interac has established a wide range of security rules, ranging from general rules to those that are specific to situations and transactions.

For example, different rules apply depending on whether we are dealing with a debit card issuer or a terminal or ATM operator and the type of transactions that are accepted: direct payment, flash payment or terminal withdrawals.

For each set of rules, it is important to understand which components apply to the client’s situation. This requires in-depth knowledge of Interac’s regulatory framework. Our team of experts has developed this knowledge.

We had to provide an attestation to Interac that the required IT control measures exist and were applied.

In the case at hand, we also proposed methods to our client that would better structure the process for documenting evidence of the controls. These enhancements will make it much easier to perform the annual Interac compliance program attestation.

Additionally, we ensured that all of the required controls are always properly performed by determining the responsibility for such controls within the organization’s various teams. This ensures that information is collected on an ongoing basis, even when there are staff changes, and that knowledge of the control processes within the organization is shared.

Thanks to our structured approach, it was possible to:

  • Present a complete compliance file, in accordance with Interac’s requirements;
  • Submit the report within the stated deadline;
  • Maximize efficiency in preparing the report;
  • Standardize the supporting documentation.

Secure practices for all industries

Regardless of its industry or size and the complexity of its compliance exercise, any organization must be able to rely on well-designed IT processes and controls.

We can help you evaluate your IT environment in accordance with the applicable frames of reference for your situation to provide you with the assurance that it does not comprise significant risks, in particular in terms of security processes and controls. Should weaknesses be detected, we present recommendations to address the issues, based on a cost-benefit assessment to prioritize actions taken.

Our experts are specialized in evaluating compliance with PCI-DSS standards and conducting control attest engagements relating to special reports using recognized audit standards (CSAE 3416, SSAE18 SOC 1 and 2, CSAE 3000 and 3001).

03 May 2019  |  Written by :

Mathieu Lendick is an expert in Management Consulting at Raymond Chabot Grant Thornton. Contact him...

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

In this two-part series, we will review the tax measures and developments that will enable you to have more money in your pockets.

By April 30th, make sure you don’t forget any credits that could reduce your tax bill!

Moving

If you moved in 2018 to be at least 40 kilometres closer to your new work location in Canada, you can claim your moving expenses. Note however that these costs can only be deducted from your income from the new job (or new company) for the year. Any non-deducted balance of eligible expenses can be carried forward to future years.

Here are some examples of eligible expenses that are often overlooked:

  • Costs relating to the sale of your former residence, including the broker’s commission;
  • Legal fees and transfer duties applicable to registering the deed of ownership of your new residence when you sell your old one;
  • Maintenance fees of up to $5,000 relating to your former residence while it was up for sale and you and your family were not living there.

Financial expenses

When you make an investment to generate (not tax-exempt) investment or business income, you can claim the expenses incurred during the year for this investment as a tax deduction. In Quebec however, in the case of income from property (and not from a business), the deduction of financial expenses is limited to investment income. As applicable, any non-deducted balance will be carried forward indefinitely and can be deducted when taxable investment income is generated.

Seniors or retirees

The tax systems offer numerous benefits for seniors and retirees. For example, there is the non-refundable tax credit for experienced workers offered in Quebec. Now available as of 61 years of age instead of 63, this credit could entitle you to a maximum credit of $450 if you are 61 years old, $750 if you are 62, $1,050 if you are 63, $1,350 if you are 64 and $1,650 if you are 65 years old. You must be employed and earning more than $5,000 per year.

Since 2016, the Quebec government has also been offering a grant to seniors aged 65 years and older who have owned their residence for at least 15 years and who experience a significant increase in their municipal taxes. If your annual family income does not exceed $51,700, you may qualify.

In Quebec, the independent living tax credit for seniors has been increased. This credit corresponds to 20% of the portion exceeding $250 of the annual expenses incurred to acquire, rent or install equipment to be used by a senior 70 years and older in his/her principal residence. The extended list of eligible equipment now includes walkers, canes, crutches, non-motorized wheel chairs and equipment for the hearing impaired.

Tips

Did you forget a tax deduction in the past? You can ask for an adjustment to your income tax returns for the past 10 years in order to claim the deductions to which you are entitled.

Consult an expert to benefit from the best tax reductions.

This article was published on April 25, 2019 in the Journal de Montréal and Journal de Québec (in French). Christian Menier is the new columnist for the Argent – Dans vos poches column.

25 Apr 2019  |  Written by :

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

See the profile

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

In this two-part series, we will explore new, lesser known tax developments and measures that can help reduce your tax bill and maximize your tax refund.

Buying your first home

For several years now, the federal government has been offering a $750 tax credit (before Quebec abatement) for a new home owner. Good news for 2018: there’s also a maximum credit of up to $750 available in Quebec. As such, a total credit of $1,376 can be available for the purchase of a first home.

Be aware however that this does not necessarily imply the purchase of a “first” home. To qualify for the credit, you must not have lived, in the acquisition year or the four previous years, in another dwelling owned by you, your spouse or your common-law partner. Additionally, the residence must be acquired with the intention of making it your principal residence no more than one year after it is purchased.

Renovations

The refundable RénoVert tax credit, extended until March 31, 2019, allows you to obtain up to $10,000 for eco-friendly renovations carried out on a principal residence or cottage. Eligible work includes renovations involving insulation, waterproofing, doors and windows, heating, air conditioning, etc. Individuals have until March 31, 2019 to enter into an agreement with a recognized contractor and will have to pay for their renovation expenses before January 1, 2020.

Family caregivers

The Quebec tax system provides for several credits available to family caregivers:

  • Taking care of your spouse of at least 70 years of age in your own residence could allow you to claim a maximum tax credit of $1,015 in 2018.
  • Housing or living with a relative who needs care can entitle you to claim a maximum tax credit of $1,185 for 2018.
  • New this year, caregivers who do not live with the relative they’re caring for can request a maximum refundable tax credit of $533. To qualify, they must help this person regularly on voluntary daily basis.
  • In order to provide more support for family caregivers who need respite, the eligibility criteria for the tax credit for respite of caregivers were increased in 2018. Caregivers can allocate a $250 credit to a volunteer who has provided 200 hours of assistance during the year, $500 for 300 hours, and $750 for 400 hours of work.

Don’t forget that there are also federal support measures for family caregivers. A credit is available if you are caring for a spouse, common-law partner or dependent with a physical or mental disability (parents, grandparents, children, grandchildren, brothers, sisters, uncles, aunts, nephews or nieces). Several factors influence the available credit, such as your relationship with the person, the person’s net income and whether or not other credits were claimed for this person.

Tips

If you qualify for the first-time homebuyer tax credit, make sure to update your address in your tax return and the information entered with regard to an HBP, if applicable.

If you carried out eligible renovations for the RénoVert credit, don’t forget to obtain a copy of prescribed form TP-1029.RV.A-V duly completed and signed by the contractor who did the work.

Consult your tax specialist or financial advisor to ensure that you receive all the benefits to which you are entitled.

This article was published on April 24, 2019 in the Journal de Montréal and Journal de Québec (in French). Christian Menier is the new columnist for the Argent – Dans vos poches column.

25 Apr 2019  |  Written by :

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

See the profile
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