A return will have to be filed with the CRA no later than April 30, with respect to any residential property (detached house, condominium, duplex or triplex) held in Canada by a Canadian private corporation, a personal trust or a partnership.

Non-resident individuals are also subject to this obligation provided in the Underused Housing Tax Act.

Important: plan to request an identification number (if necessary)

For this purpose, corporations will need to obtain an Underutilized Housing Tax (UR) Program Account. This request can be made online, starting February 7. Non-resident individuals will need to have a tax identification number (ITN) to file this return.

Summary of applicable rules

Since 2022, any owner, on December 31 of the year, of a residential property located in Canada may be subject to the Underused Housing Tax Act. Subject owners must file a declaration and, in certain cases, pay a tax of 1% of the value of the building, on an annual basis.

This tax essentially applies to vacant or underutilized residential properties that are directly or indirectly owned by non-resident aliens. Canadian citizens and permanent residents who personally own a residential property in Canada are not subject to this law.

Private taxable Canadian corporations as well as Canadian citizens and permanent residents who own residential property through a personal trust or partnership are not excluded owners. They may be exempt from the tax, but they are required to file an annual return with the CRA in order to claim this exemption. Failure to comply with this obligation by April 30 of the following calendar year may result in significant penalties.

Read our Tax Bulletin for more information.

Mergers and acquisitions (business combinations) can have a fundamental impact on the acquirer’s operations, resources and strategies.

For most entities, such transactions are infrequent and each one is unique. IFRS 3 Business Combinations contains the requirements for these transactions, which are challenging in practice.

The standard itself has been in place for more than 10 years now and has undergone a post-implementation review by the IASB. It is one of the most referred to standards currently issued.

The Insights into IFRS 3 series summarizes the key areas of the standard, highlighting aspects that are more difficult to interpret and revisiting the most relevant features that could impact your business.

The next three publications in the Insights into IFRS 3 series discuss the recognition and measurement principles:

• Recognition principle;
• How should the identifiable assets and liabilities be measured?
• Specific recognition and measurement provisions.

The publications mentioned above follow this IFRS Adviser Alert.

The human aspect is at the heart of a successful transformation. Managers play a crucial role in making change happen.

To stay in the race, businesses no longer have the choice but to undertake a digital and technological shift, in stages, prioritizing their needs. They then embark on a deep transformational process of the organizational culture that is shaking up the way things are done. In this change management, it’s essential not to forget the human in all of this.

In a recent survey carried out by our firm on the key success factors of digital transformation, business leaders reported that the workforce tops the list at 32%, far ahead of financing (7%) and even technology (4%). These results speak volumes about the importance of taking care of teams to support them through the transition.

Mobilizing your teams

Management initiates a company’s digital strategy and must develop an effective communication plan to prepare employees for the changes. However, it’s up to managers to be attentive and to act continuously with the teams to ensure that they understand the need for the digital and technological transformation underway and explain it as much as possible.

It is also good to remind employees of what they stand to gain, whether it’s the elimination of repetitive and non-value-added tasks, the acquisition of new knowledge and skills, the implementation of more efficient equipment, efficiency and productivity gains, job security, etc.

When employees are on board with technological changes, they are more easily mobilized throughout the project. Only then can the organization make great strides.

Adapting along the way and promoting active participation

It’s also important to remember that a digital transformation project is never linear. During the integration phase, it’s sometimes necessary to be agile and take a step back when the chosen solution does not fulfill its promises or when technical difficulties slow down the breaking-in of machinery. During such phases, it’s important to remember the communication plan messages and, above all, to listen to ideas and proposals to find solutions to problems and adjust.

In fact, at each transformation step, communication must go both ways in order to draw on the collective intelligence. It’s just as important to celebrate every success, regardless of size, in order to maintain the momentum.

Change management training and tools

To properly play their role, managers must be trained in change management. Businesses must provide the necessary tools for efficiently managing operations and teams in a changing environment.

To do this, they need to understand the scope of the transformation in order to manage their own concerns about the path to take. They also need to be able to measure operational risks in order to prevent or mitigate them.

Among these risks, there are always those employees who are more resistant to change. Managers must therefore be flexible and adapt their processes. It will be all the more important to listen to their fears—of becoming useless or incompetent, for example—and to respond to their concerns or frustrations. Otherwise, they could become demotivated, stop coming up with ideas, or even create a negative climate within the team.

It might also be a good idea to identify employees who are fully involved in the innovation process and make them true ambassadors within their own team. This is what helps move projects forward day after day.

Anticipating impacts on daily activities

The impact of the technology project on current operations should also not be underestimated. Managers will need to coordinate efficiently in order to avoid or at least minimize interference between the two.

A recent study by the Ministère de l’Économie et de l’Innovation showed that when change is well managed, the company is four times more likely to meet its deadlines. It also increases sixfold the possibility of reaching targeted objectives and provides much better chances (1.6 times more) of the budget being respected.

These are just some of the reasons to properly prepare your managers, front runners of this change management, so that they can assume their full role.