22 Mar 2011

Montréal, March 22, 2011 – Raymond Chabot Grant Thornton reiterates the need for tax equity in connection with business transfers to family interests, while taking the opportunity to send taxpayers its summary of the main tax measures in the federal budget. The 2011 federal government budget highlights may be viewed at: http://www.rcgt.com/en/budget-annual/staying-the-course/.

Call for tax fairness on business transfers

In the wake of the recent provincial budget, Raymond Chabot Grant Thornton urged the Government of Quebec to make the necessary legislative changes without delay so that business transfers to family interests are no longer at a disadvantage. “Today, we are making the same call for tax equity to federal Finance Minister, James M. Flaherty. We understand that difficult choices must be made when preparing a budget, but considering that entrepreneurial succession is an important issue for Quebec and Canada’s economic development, we had hoped for immediate changes,” stated Jean Robillard, President and Chief Executive Officer.

Our report, entitled Business Transfers: Problems and Suggested Solutions, that we sent to Mr. Flaherty on December 2, 2010, suggests ten possible solutions to offset the tax bias affecting business transfers to family members. “More specifically, these suggested solutions aim to correct the inadequacy between the reality of the business world and the current taxation system, by proposing changes to the tax laws that would support intergenerational transfers that meet an economic reality criterion,” stated Suzanne Landry, Raymond Chabot Grant Thornton University Partner, HEC Tax Professor and the report’s lead author.

One of the important ways to stimulate entrepreneurship would be to amend Section 84.1 of the Canadian Income Tax Act, because, believe it or not, it is usually more beneficial for business owners to sell their company to a third party or even foreign interests rather than transfer it to a family member,” stated Tax Partner Jean Gauthier.

Raymond Chabot Grant Thornton wishes to reiterate, once again, that, under both federal and provincial legislation, capital gains are considered as a deemed dividend when an individual disposes of shares of a company resident in Canada, for a cash consideration, to another company that is not dealt with at arm’s length. When the company whose shares were sold is connected to the buyer after the transaction, the seller cannot benefit from the capital gains deduction.

“Considering that the entrepreneurial business rate has been decreasing for the past 20 years across Canada, that only 3,000 Quebec entrepreneurs aged between 30 and 44 would be new business owners by 2018, that is, ten times less than in Ontario, and that entrepreneurial businesses in Quebec would suffer a major 13.9% decrease by 2018, there is an urgent need to act! We hope that the governments will reach agreement quickly and make the necessary legislative changes to ensure our economic competitiveness, long-lasting businesses and entrepreneurial succession without tax bias,” concluded Jean Robillard.

About Raymond Chabot Grant Thornton

Founded in 1948, Raymond Chabot Grant Thornton is a leader in the fields of assurance, taxation, consulting, business recovery and reorganization services. The Firm owes its success to a team of over 2,000 people, including over 225 partners in more than 90 offices in Quebec, eastern Ontario and New Brunswick. The scope of its network has made the Firm the leader in its sector of activities. Additionally, for more than thirty years now, our Firm has also been a member of Grant Thornton International Ltd., providing its clientele with access to the expertise of member and correspondent firms in over 100 countries.

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Information:

Francis Letendre
Public Relations Consultant
Raymond Chabot Grant Thornton
T. 514 878-2691, extension 2398
C. 514 554-1685
letendre.francis@rcgt.com
www.rcgt.com

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17 Mar 2011

Montréal, March 17, 2011 – Considering that entrepreneurial succession is a major economic development issue, both in Quebec and Canada, Raymond Chabot Grant Thornton had hoped that the provincial and federal governments could reach agreement this year on legislative changes to prevent the adverse effects for taxpayers when transferring their business to family members.

“Despite the government’s announcements to favour entrepreneurship and entrepreneurial succession, such as the implementation of the Relève Québec Fund and of the Capital Anges Québec Fund, for which amounts of $50 M and $30 M are respectively allocated – measures that we welcome -, we must admit that the intergenerational business transfer problem remains whole,” said Tax Partner Luc Lacombe.

Legislative changes are overdue

While this is not a new issue, now, more than ever, we need equitable tax rules to promote entrepreneurial succession and ensure the continuity of our businesses. “Believe it or not, it is usually more beneficial for business owners to sell their company to a third party or even foreign interests rather than transferring it to a family member,” stated Tax Partner Jean Gauthier.

One of the important ways to stimulate entrepreneurship would be to amend Section 517.1 of the Quebec Taxation Act and Section 84.1 of the Canadian Income Tax Act. On December 2, 2010, Raymond Chabot Grant Thornton sent a copy of its report, Business Transfers: Problems and Suggested Solutions, to Finance Minister Raymond Bachand. The report may be viewed at the following address: www.rcgt.com/business-transfers.

The report suggests ten possible solutions to offset the tax bias affecting business transfers to family members. “More specifically, these suggested solutions aim to correct the inadequacy between the reality of the business world and the current taxation system, by proposing changes to the tax laws that would support intergenerational transfers that meet an economic reality criterion,” stated Suzanne Landry, Raymond Chabot Grant Thornton, University Partner, HEC Tax Professor and the report’s lead author.

Specifically, under current legislation, capital gains are considered as a deemed dividend when an individual disposes of shares of a company resident in Canada, for a cash consideration, to another company that is not dealt with at arm’s length. When this company whose shares were sold is connected to the buyer after the transaction, that individual cannot benefit from the capital gains deduction.

“We are, nevertheless, optimistic that the Quebec and federal Finance Ministers will not delay in introducing the necessary legislative changes to support family business transfers. Since the entrepreneurial business rate has been decreasing for the past 20 years across Canada, and considering that entrepreneurial businesses in Quebec would suffer a major 13.9% decrease by 2018, government action is needed to support a strong, productive entrepreneurial sector, particularly since the Quebec government is in the process of developing an entrepreneurial strategy,” added Jean Robillard, President and Chief Executive Officer.

2011-2012 Quebec Budget Tax Bulletin

Raymond Chabot Grant Thornton is also taking this opportunity to release its tax bulletin summarizing the main budget changes for individuals and businesses announced today by the Quebec Finance Minister. The summary may be viewed at the following address: www.rcgt.com/taxbulletins

About Raymond Chabot Grant Thornton

Founded in 1948, Raymond Chabot Grant Thornton is a leader in the fields of assurance, taxation, consulting, business recovery and reorganization services. The Firm owes its success to a team of over 2,000 people, including over 225 partners in more than 90 offices in Quebec, eastern Ontario and New Brunswick. The scope of its network has made the Firm the leader in its sector of activities. Additionally, for more than thirty years now, our Firm has also been a member of Grant Thornton International Ltd., providing its clientele with access to the expertise of member and correspondent firms in over 100 countries.

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Information:

Francis Letendre
Public Relations Consultant
Raymond Chabot Grant Thornton
Tel: 514-878-2691, extension 2398
Cell: 514-554-1685
letendre.francis@rcgt.com
www.rcgt.com

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15 Mar 2011

 

 

On March 15, 2010, the President and Chief Executive Officer, Jean Robillard, and the Partner in Charge of the Management Consulting Group, Pierre Fortin, presented a conference to the Financial Executives International (FEI) Canada, in Montréal, before an audience of about 100 people, consisting mostly of Financial Executives.

Jean Robillard began by citing certain economic findings related to Quebec’s low productivity levels, mentioning that several business people and politicians had already discussed this matter. This was followed by each of the speakers discussing the importance for businesses of optimizing processes in order to remain productive and competitive and demonstrating that, at times, business turnaround is the option of choice. In conclusion, according to the presenters, choosing between optimization or turnaround for a business is frequently the result of management’s approach and the timing of their response.

PowerPoint presentation of speeches (in French)

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15 Mar 2011

Montréal, March 15, 2011 – Raymond Chabot Grant Thornton is proud to be the official evaluator of the 2011 Les Mercuriades competition, a prestigious contest organized by the Fédération des chambres de commerce du Québec (FCCQ) that serves to recognize the talent, work and skills of Quebec business people.

Since 1981, this contest has given private enterprises of all sizes, in every economic sector and region in Quebec a privileged opportunity to showcase their success. “Through our association with this contest, for a seventh consecutive year, we are able to acknowledge the exceptional know-how of the Quebec business community and its drive to succeed. Seeing such motivated individuals with so many innovative ideas, we can proudly state that our future is in good hands!” said Pierre Monette, Vice-President of the Montréal region.

“Raymond Chabot Grant Thornton’s people are themselves dedicated individuals, who are always ready to provide Quebec businesses with a range of services designed to make them more innovative and competitive, so it is a privilege to be associated with the Les Mercuriades contest. We can see first-hand the success of local businesses and the ingenuity of talented and creative Quebeckers,” concluded Jean Robillard, RCGT President and Chief Executive Officer.

About Raymond Chabot Grant Thornton

Founded in 1948, Raymond Chabot Grant Thornton is a leader in the fields of assurance, taxation, consulting, business recovery and reorganization services. The Firm owes its success to a team of over 2,000 people, including over 225 partners in more than 90 offices in Quebec, eastern Ontario and New Brunswick. The scope of its network have made the Firm the leader in its sector of activities. We should also mention that, for more than thirty years now, our Firm has also been a member of Grant Thornton International Ltd., providing its clientele with access to the expertise of member and correspondent firms in over 100 countries.

2011 Mercuriades Finalists

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Information:

Francis Letendre, Public Relations Consultant
Raymond Chabot Grant Thornton
Tel.: 514-878-2691, ext. 2398
Fax: 514-554-1685
letendre.francis@rcgt.com
www.rcgt.com