With the growth and success of businesses at heart, once again, Raymond Chabot Grant Thornton stated its position in budget proposals to the federal and Quebec governments.

The purpose of these memoranda is to foster wealth creation and give our businesses the means to achieve their ambitions. As a reminder, the recommendations covered four strategic themes to enhance business performance: a fair, incentive-based tax system, entrepreneurial succession, innovation and immigration.

These budget recommendations were sent to various federal and Quebec ministers and elected members as well as numerous key economic and business influencers.

Dedicated to advocating for the business community, the firm issued its comments as soon as the budgets were tabled (federal and Quebec), and informed taxpayers about the announced measures (federal and Quebec tax bulletins). A concerted exercise that, yet again, illustrated Raymond Chabot Grant Thornton’s leading role in the marketplace and its constant focus on providing taxpayers with clear information about the issues that shape their world.

There can be no denying the firm’s place among influencers—its post-budget comments were included with those of the Fédération des chambres de commerce du Québec, the Conseil du patronat du Québec, the Chamber of Commerce of Metropolitan Montréal and the Ordre des comptables professionnels agréés du Québec, among others.

Several experts were involved in producing and broadcasting these strategic documents and some of them also provided their expertise in a number of regional and national media outlets to inform the public about the new economic and tax measures. The budget proposals were highlighted in some thirty interviews with various media across Quebec.

Federal budget, March 19, 2019

Tax Partner, Sylvain Gilbert, who attended the media lockup, participated in a web interview with TVA, and a newscast with Pierre Bruneau. He also presented budget highlights to listeners of 95.7 FM (Saguenay), 95.5 FM (Témiscouata), 101.5 FM (Sainte-Marie-de-Beauce) and 107.7 FM (Sherbrooke) and viewers of L’Essentiel, hosted by Esther Bégin, on CPAC’s Parliament webcast, broadcast across Canada.

Tax Partner, Luc Lacombe, who attended the tax specialist lockup, also participated in numerous interviews: he presented the firm’s expectations and budget proposals on the eve of the budget to Esther Bégin, host of L’Essentiel, on the CPAC’s cross-Canada parliament webcast. He also presented the main tax measures to listeners of Radio-Canada (Québec City), 103.3 FM and 94.7 FM (Mauricie), 99.1 FM (Mauricie) and 103.5 FM (Saint-Georges-de-Beauce).

Olivier Levesque, Senior Tax Consultant, discussed the budget with radio announcers on 99.5 FM (Roberval), 104.5 FM (Alma) and 93.5 FM (Chibougamau) while Sarah Phaneuf, Tax Partner, presented a budget analysis to Radio-Canada (Estrie) listeners.

The firm’s reaction to the budget was quoted in Finance et Investissement and Informe Affaires among others.

Furthermore, the firm’s tax bulletin was published on world-renowned Thompson Reuters Taxnet Pro site.

Quebec Budget on March 21, 2019

Sylvain Gilbert was at the media lockup for the Quebec budget as well and provided analyses to certain media, including Le Journal de Montréal/Le Journal de Québec and TVA nouvelles. He then participated in a number of interviews for listeners of 95.7 FM (Saguenay), 97.5 (Chicoutimi), 95.5 FM (Témiscouata), 99.1 FM (Mauricie), 101.5 FM (Sainte-Marie-de-Beauce) and 107.7 FM (Sherbrooke).

For his part, Luc Lacombe, discussed with reporters from a number of media, including Radio-Canada (Québec City) and FM 103.5 (Saint-Georges-de-Beauce).

Olivier Levesque was invited by 99.5 FM (Roberval), 104.5 FM (Alma) and 93.5 FM (Chibougamau) to share the firm’s opinion on the Quebec budget.

Sarah Phaneuf was the guest analyst on Radio-Canada (Estrie) radio and television.

The firm’s release on the provincial budget was published by specialized media, including Finance et investissement and Conseiller.ca, as well as Thomson Reuters’ Taxnet Pro tax platform.

Lastly, a webinar presented on March 26th by Raymond Chabot Grant Thornton, in association with the Association des professionnels en développement économique du Québec, hosted by Jean-Pierre Poulin, Tax Partner, and Jean-Philippe Brosseau, Economist and Senior Manager, Consulting Services, highlighted a number of measures related to the regional economic development in Quebec.

Representations that Bear Fruit

In recent years, Raymond Chabot Grant Thornton’s advocacy with the governments has helped bring about legislative or policy changes, for example, lower corporate taxes or more flexible tax rules for a more equitable intergenerational business transfer in Quebec.

It’s interesting to note that in this year’s federal budget, the firm’s appeal to improve the federal scientific research and experimental development (SR&ED) tax credit program and for a fairer tax system for agriculture and fishing businesses in Canada was well received.

There is no doubt about the value of these public affairs and media activities for a firm that supports the growth of local companies!

Tax expert Sarah Phaneuf collaborates with Finance et Investissement to take stock of life annuities and TFSAs.

Raymond Chabot Grant Thornton Tax Partner Sarah Phaneuf collaborated with Finance et Investissement to take stock of life annuities and the Tax-Free Savings Account (TFSA). According to the law, it is currently prohibited to hold a life annuity in a TFSA. The Canadian Life and Health Insurance Association (CLHIA) finds this situation regrettable and recommended, in its pre-budget submission to the House of Commons’ Standing Committee on Finance, that the rules governing savings products be relaxed.

Are life annuities really prohibited in TFSAs? Sarah specifies that eligible investments in a TFSA include “a contract for an annuity issued by an authorized annuity provider if, in particular, the following condition is met: the contract holder has the right to require the redemption of the contract at any time for an amount that, if reasonable selling or administrative fees were not taken into account, would be approximately equal to the value of the funds that could otherwise be used to fund future periodic payments under the contract”.

To know more about this issue, read the article dans Finance et investissement (in French).

Consult your tax specialist or financial advisor to make the best possible investments.

2019-2020 Quebec Budget: Raymond Chabot Grant Thornton Publishes Its Tax Bulletin and Voices Its Opinion

Québec City, March 21, 2019 – The tabling of the Quebec budget today once again brings Raymond Chabot Grant Thornton to issue comments and publish its tax bulletin, which was drafted during the day by a team of tax experts present at the lock-up in Québec City.

Welcomed measures, but insufficient for addressing short-term labour shortage

From the outset, the firm would like to underline the measures for stimulating investments and inciting workers to remain longer in the labour market of Quebec businesses. Tax Partner Luc Lacombe stated: “The $1B increase in share capital from Investissement Québec, bringing the amount to $5B, is good news for businesses, as is the creation of a $1B envelope from the government to support the strategic development of our businesses and protect the presence of head offices.”

Lacombe adds: “Increasing the tax credit for experienced workers and lowering the age of eligibility to 60 years, as well as reducing payroll costs for workers 60 years and older, are also promising measures for our businesses. However, we would have expected more for increasing their competitiveness, particularly from a tax standpoint, and accelerating the integration of foreign talent into the workforce.”

President and CEO, Emilio B. Imbriglio pointed out: “The announcement to better integrate immigrants within communities and into employment, with an additional contribution of $146M per year, for the next five years, is very good news indeed. However, our short-term challenge is to ensure that our businesses from every corner of the province, no longer put contracts on ice or refuse projects due to a labour shortage. According to Emploi Québec, in the next few years, immigration will represent a 22% inflow of labour, the second most important source for our Quebec businesses. It is therefore urgent to accelerate the integration of temporary and permanent workers into the workforce for our businesses to succeed.”

Marc Audet, President of AURAY Capital, a subsidiary of Raymond Chabot Grant Thornton, made it clear that: “While Quebec’s permanent economic immigration is very important and should be better adapted, temporary immigration is necessary to quickly fill key positions across the province. It’s obvious that the process is too long and there’s still too much red tape in a world where unemployment rates are at their lowest. Moreover, government programs such as the Business Assistance – Immigrant Investor Program, the Employment Integration Program for Immigrants and Visible Minorities and the one relating to the Innovative Manufacturer need to be more interrelated. Why can’t we use part of the funds generated by the immigrant investor program envelope, which is not subsidized by the State, to cover part of our businesses’ onerous costs for recruiting abroad? Surely, such small adjustments would help support the growth of businesses in Quebec.”

Further tax cuts needed

Even with the tax cuts already announced by the provincial government, Quebec businesses will not regain the tax advantage they enjoyed vis-à-vis the United States. With a 4% tax rate for all SMEs in Quebec by 2021, they will not be able to stand out from the other provinces either.

Lacombe also raised this issue: “Our firm continues to demand the elimination of tax on SMEs’ first $500,000 of taxable income.They must be able to use these savings to produce more, innovate and recruit more talent, here and abroad. If the government increased the accelerated capital cost allowance to 100% for the first year on all business investments, as is the case in the United States, this would have a very positive effect on our businesses’ competitiveness.”

More succession plans and less restrictions on intergenerational business transfers: A necessity for Quebec

How can we ensure the success of the next generation if only 8% of all entrepreneurs have a formal succession plan?

According to the firm’s Regional Vice-President and National Business Transfer Leader, Éric Dufour: “Specific measures are needed, such as the creation of a fund to support businesses in order for professionals to assist them implement a succession plan that takes into account all issues, whether they are of a fiscal, strategic, human, legal or financial in nature. The challenge is too great to delay the introduction of structuring measures, such as the certification of stakeholders to accompany entrepreneurs in their transfer process, the endorsement of these plans by a government authority or even an increase in the new Quebec Business Transfer Fund.”

In addition, even if Quebec has loosened the tax law to make things fairer for intergenerational business transfers, unlike the federal government where the issue remains unresolved, the firm highlights that very restrictive conditions persist that do not always favour family takeovers. Dufour concludes: “Restricting transferors from making complete, and not partial, business transfers, and preventing them from receiving post-sale interest, which would protect them from being taxed on the transaction’s capital gain, hinders the long-term existence of our family businesses and Quebec entrepreneurship.”

Please consult the pre-budget recommendations submitted to the Canada and Quebec Finance Ministers by Raymond Chabot Grant Thornton.

About Raymond Chabot Grant Thornton

Founded in 1948, Raymond Chabot Grant Thornton has become a Canadian leader in the areas of assurance, tax, advisory services and business recovery and reorganization, with more than 2,500 professionals, including approximately 200 partners. Together, Raymond Chabot Grant Thornton and Grant Thornton LLP, another Canadian member firm of Grant Thornton International Ltd, comprise more than 4,400 professionals and close to 170 offices across Canada to help Canadian organizations achieve their full growth potential both locally and globally. Grant Thornton International Ltd provides clients with the expertise of member and correspondent firms across more than 135 countries and more than 50,000 professionals.

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Source:

Francis Letendre
Head, Public Affairs
Raymond Chabot Grant Thornton
Tel.: 514-390-4201
[email protected]