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
[email protected]
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
[email protected]
www.rcgt.com

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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
[email protected]
www.rcgt.com

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08 Mar 2011

Montréal, March 8, 2011 – In honour of International Women’s Day, Raymond Chabot Grant Thornton is releasing the results of an international survey on the proportion of women in senior management positions in the private sector. The Grant Thornton International Business Report (IBR) indicates that, in Canada, women hold 28% of senior management positions within the surveyed entities, which places Canada among the leaders in the Western world, above the global average of 20%.

While countries such as Thailand, Russia, the Philippines and China lead the survey, given the rapid pace of their economies and the multitude of career opportunities that are presenting themselves, Canada, for its part, is in an interesting situation among countries with similar economies, placing ahead of the Scandinavian countries, France, Spain and the United States.

Slow but tangible progress

The results of the same survey conducted in 2004 in Canada revealed that women occupied 22% of senior management positions. These data indicate that there has been a change in the proportion of women in senior management positions. “I’m very pleased to see that, internationally, we are in such an enviable position. It shows that many enterprises make it possible for their employees to climb the rungs of the corporate ladder and occupy management positions,” stated Louise Martel, Partner in Charge of the Executive Recruiting practice at Raymond Chabot Grant Thornton.

However, a 2009 census of the 500 largest corporations in Canada indicates that the percentage of women on their boards of directors was 14%, up one percentage point from 20071. In 2009, in the United States, women’s representation on boards of directors was 15%2.

“While faster progress would be preferable, there is no doubt that women are occupying more and more management positions and their representation on boards of directors is increasing. In fact, in our executive search activities at Raymond Chabot Grant Thornton, close to 30% of management vacancies posted by our clients were filled by women. Additionally, it should be noted that 58% of Quebec university students are women and we have attained parity at the Master’s level as well. These women will advance in a work environment that is far different from the one their predecessors experienced,” concluded Louise Martel.

To view the Grant Thornton International Business Report (IBR): http://www.grantthorntonibos.com/index.asp

About Raymond Chabot Grant Thornton

Founded in 1948, Raymond Chabot Grant Thornton is a leader in the fields of assurance, taxation, consulting and recovery and reorganization services. The Firm owes its success to over 2,000 employees, including more than 225 Partners in over 90 offices in Quebec, Eastern Ontario and New Brunswick. The scope of its network makes it a leader in its business segment. For the past 30 years, Raymond Chabot Grant Thornton has been a member of Grant Thornton International Ltd providing its clients with the expertise of the member and correspondent firms in more than 100 countries.

About the survey

IBR is a survey of medium to large privately held businesses, researching the opinions of over 11,000 businesses annually. The target respondents are chief executive officers, managing directors, chairmen or other senior executives (title dependent on what is most appropriate for the individual country) from 39 economies primarily across five industries: manufacturing (25%), services (25%), retail (15%) and construction (10%) with the remaining 25% spread across all industries.

Locally, the sample tends to cover the industries mentioned previously, with some countries being able to have local valid data for specific sectors or regions when the sample size is large enough.

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1 Laura Jenner, Liz Mulligan-Ferry, et Rachel Soares, 2009 Catalyst Census: Financial Post 500 Women Board Directors, March 2010,
http://www.catalyst.org/knowledge/2009-catalyst-census-financial-post-500-women-board-directors

2 Rachel Soares, Nancy M. Carter et Jan Combopiano, 2009 Catalyst Census: Fortune 500 Women Board Directors, December 2009,
http://www.catalyst.org/knowledge/2009-catalyst-census-fortune-500-women-board-directors-0

Information:

Francis Letendre
Consultant, Public Relations Raymond Chabot Grant Thornton
T. 514-878-2691, extension 2398
C. 514-554-1685
[email protected]
www.rcgt.com

Source:

Frédéric Dumais
Consultant, Strategic Information Raymond Chabot Grant Thornton
T. 514-878-2691, extension 2393
[email protected]
www.rcgt.com