Connect with us
[the_ad id="89560"] [the_ad id="89560"]

Opinion

Budget 2019 – Poor wording requires 2 ex-spouses within 5 years for Home Buyers Plan

Published

on

If you like this, share it!




  • by Cory Litzenberger

    This is one of those rare times I hope I am wrong in my interpretation, and look forward to being proven wrong by my professional colleagues.

    On March 19, 2019 the federal government tabled its election-year budget. One of the newest and strangest provisions is the ability for people going through a separation or divorce to potentially have access to their RRSP under the Home Buyers Plan.

    Now in my article and podcast entitled: “Escape Room – The NEW Small Business Tax Game – Family Edition” with respect to the Tax On Split Income (TOSI) rules, I made a tongue in cheek argument that people will be better off if they split, because then the TOSI rules won’t apply.

    In keeping with the divorce theme, beginning in the year of hindsight, 2020, the federal government is giving you an incentive to split up and get your own place.

    However, there are a few hoops:

    On page 402 of the budget, under new paragraph 146.01(2.1)(a), at the time of your RRSP withdrawal under the Home Buyers Plan, you must make sure that:

    • – the home you are buying is not the current home you are living in and you are disposing of the interest in the current home within two years; or
    • – you are buying out your former spouse in your current home; and

    you need to:

    • be living separate and apart from your spouse or common-law partner;
    • have been living separate and apart for a period of at least 90 days (markdown October 3, 2019 on the calendar),
    • began living separate and apart from your spouse or common-law partner, this year, or any time in the previous 4 years (ok, you don’t have to wait for October); and…

    …here is where the tabled proposed legislation gets messy.

    Proposed subparagraph 146.01(2.1)(a)(ii) refers to where the individual

    • wouldn’t be entitled to the home buyers plan because of living with a previous spouse in the past 4 years that isn’t the current spouse they are separating from

    “(ii) in the absence of this subsection, the individual would not have a regular eligible amount because of the application of paragraph (f) of that definition in respect of a spouse or common-law partner other than the spouse referred to in clauses (i)(A) to (C), and…”

    The problem with the wording of this provision, is that it is written in the affirmative by the legislators using the word “and”. This means, you must be able to answer “true” to all the tests for the entire paragraph to apply.

    The way I read this, the only way to answer “true” to this subparagraph is if you have a second spouse (ie: spouse other than the spouse referred to) that you shared a home with and you split from in the past four years.

    If you have a second spouse that you shared a home with in the past four years, then “paragraph (f)” in the definition of “regular eligible amount” would apply and the answer would be “true”.

    If the answer is “true” you can then get access to your RRSP Home Buyers Plan.

    If you don’t have a second spouse then, even though “paragraph (f)” might be met, the phrase “spouse other than the spouse referred to” would not be met, and therefore the answer would be “false”.

    This would, in turn, cause the entire logic test of the provision to be “false” and so you would not be able to take out a “regular eligible amount” from your RRSP for the Home Buyers plan because you do not meet the provisions.

    If my interpretation is correct then I would really be curious as to what part of the economy they are trying to stimulate.

    In my opinion the legislation could be fixed with a simple edit:

    “(ii) in the absence of this subsection, the individual would not have a regular eligible amount because of the application of paragraph (f) of that definition in respect of:

    (A) a spouse or common-law partner; or

    (B) a spouse or common-law partner other than the spouse referred to in clauses (i)(A) to (C); and…”


    Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html


    If you like this, share it!

    News

    SNC Lavalin – Just the Facts Ma’am

    Published

    on

    If you like this, share it!




  • Opinion by Cory Litizenberger

    Let’s take emotion out of it. Let’s take a look at the legislation. While I am not a lawyer, I do interpret tax legislation for a living, and so I decided to take a closer look at the criminal legislation pertaining to the SNC-Lavalin scandal.

    The relevant legislation is in 《parentheses》below, but here is the Coles notes:

    FACT – in 2015 SNC was charged by the RCMP under Section 3 of the Corruption of Foreign Public Officials Act

    《3 (1) Every person commits an offence who, in order to obtain or retain an advantage in the course of business, directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official

    (a) as consideration for an act or omission by the official in connection with the performance of the official’s duties or functions; or

    (b) to induce the official to use his or her position to influence any acts or decisions of the foreign state or public international organization for which the official performs duties or functions.》

    FACT – In 2015, the RCMP charged SNC-Lavalin, along with its international division, with corruption and fraud in relation with their business dealings in Libya. The RCMP said officials at the company attempted to bribe several public officials in the country, including dictator Moammar Gadhafi, as well as other businesses in Libya.

    FACT – The prosecutor is allowed to enter into a remediation agreement under Section 715.32 of the Criminal Code of Canada , if ALL conditions are met under 715.32(1).

    《715.32 (1) The prosecutor may enter into negotiations for a remediation agreement with an organization alleged to have committed an offence if the following conditions are met:

    (a) the prosecutor is of the opinion that there is a reasonable prospect of conviction with respect to the offence;

    (b) the prosecutor is of the opinion that the act or omission that forms the basis of the offence did not cause and was not likely to have caused serious bodily harm or death, or injury to national defence or national security, and was not committed for the benefit of, at the direction of, or in association with, a criminal organization or terrorist group;

    (c) the prosecutor is of the opinion that negotiating the agreement is in the public interest and appropriate in the circumstances; and

    (d) the Attorney General has consented to the negotiation of the agreement.》

    FACT – for the prosecutor to evaluate their public interest opinion, they must consider subsection 715.32(2) in its entirety which includes many relevant pieces of information except when 715.32(3) overrides it

    《 Factors to consider

    715.32(2) For the purposes of paragraph (1)(c), the prosecutor must consider the following factors: [(a) to (h)]; and

    (i) any other factor that the prosecutor considers relevant.》

    FACT – 715.32(3) says even with all those factors to consider, you can NOT factor in the national economic interest (ie: the jobs argument) if they were charged the way the RCMP charged them

    《Factors not to consider

    715.32(3) Despite paragraph (2)(i), if the organization is alleged to have committed an offence under section 3 or 4 of the Corruption of Foreign Public Officials Act, the prosecutor must not consider the national economic interest, the potential effect on relations with a state other than Canada or the identity of the organization or individual involved.》

    CONCLUSION – the jobs argument is irrelevant under the law in these circumstances – The prosecution knows this – The former Attorney General knows this – and based on the provisions as written, the jobs argument for SNC does not meet the legal requirement for a remediation agreement.

    For these reasons, I find in favour of the former Attorney General.
    — — — —

    Update: While being interviewed on the afternoon of March 7, 2019, I looked even closer at the legislation and caught something I didn’t realize on first glance when reading it.

    Notice at the end of 715.32(1)(c) the word “and”.

    While I said this means that all of the tests in (a) through (d) must be met, I neglected to say that this means no one person has the sole final decision. The prosecutor is mentioned in (a), (b), and (c); while the Attorney General is only mentioned in (d).

    To put another way, this law is written so that it is not solely the decision of the Attorney General, nor the prosecutor. Rather, it requires both the Attorney General and the Prosecutor to agree to proceed with negotiations.

    Similar to a scene in the movies where you see nuclear codes kept between two different military heads before proceeding with the launch, such is the wording of this provision.

    This means that the Attorney General does not have the final decision and so any suggestion that she does is incorrect. The decision is a joint one with most of the leg work having to be done by the prosecutor, not the Attorney General.

    So let me recap: I think it is quite simple, that a Remediation Agreement (aka Deferred Prosecution Agreement) cannot be considered under the “national economic interest” (jobs) argument based on what legislation the RCMP used for the charges.

    If that’s the argument, then the answer is “no” and the repeated number of times asking for the former Attorney General to revisit it over a four month period for something that appears so black and white might be considered workplace harassment if I were to do such a thing to one of my colleagues.

    So, since the economic argument is moot, what other argument is there?

    We heard in testimony that the parties may have wanted the Attorney General to look at it from a stance that does not imply economic interest.

    Ironically, “we need to win an election” may actually be legal as “any other factor that the prosecutor considers relevant” but then we would have to assume the prosecutor would have to be partisan, and that is highly not likely in my experience.

    So we now know that there must be an agreement between the prosecutor and the Attorney General.

    We also know that “economic interest” cannot be the reason under the law.

    So, if the law is that clear on economic interest, why would the Attorney General be asked repeatedly for reconsideration, unless it was not “economic interest” they wanted her to consider?

    For these additional reasons, I still find in favour of the former Attorney General

    Click to listen to Red Deer Accountant Cory Litzenberger on Charles Adler Tonight

    Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html


    If you like this, share it!
    Continue Reading

    Alberta

    Opinion Piece from Conservative Leader Andrew Scheer

    Published

    on

    If you like this, share it!




  • OP-ED: FIGHTING FOR ENERGY JOBS

    I had one of the most inspiring days of my political life this week in Nisku, Alberta.

    I was there as an endless line of trucks rolled through town in a show of support for Alberta’s energy sector. The convoy stretched back almost 22 kilometres, with hundreds of men and women making their voices heard loud and clear. Heading to a townhall meeting to talk to these struggling workers, I got out of my car and walked the rest of the way.

    “…The prosperity that once flowed from Alberta’s energy sector to communities across our country is a distant memory under Justin Trudeau…”

    It was emotional. There’s a lot of anger, and it’s justified. People have lost jobs. Families have been broken up. The pain is real, but it’s going unaddressed by Justin Trudeau’s government. That’s why so many hardworking Canadians came out with a single message for Justin Trudeau: They don’t want his handouts. They want to go back to work.

    I went to Alberta this week to respond to this impassioned plea for help. I went to look these men and women in the eye, and tell them that we’re with them, and we’re fighting for them. Not just Conservatives, but people from across the country that understand how important our energy sector is to Canada’s economy. They’re not alone.

    Everyone in Nisku understood why they were there, and why the situation in Canada’s energy sector is so grim.

    Justin Trudeau is trying to phase out their jobs. An industry that has sustained families and given them their livelihood for generations is being shut down by a prime minister who no longer hides his disdain for their work. In just three years, Trudeau has killed two major pipeline projects, and thrown $4.5 billion in taxpayer money into another that he can’t build. Meanwhile, his government’s Bill C-69 will put the energy sector out of business for good by ensuring that no pipeline project will see the light of day – ever again.

    The consequences of Trudeau’s disastrous policies are felt most strongly in Alberta but will affect every part of Canada. Our national economy is losing billions of dollars because we don’t have enough pipeline capacity to get our resources to those who want to buy them. Canadian oil is now selling at a major discount, costing us jobs and investment. That is why Alberta’s government took the drastic step of cutting production, and why the ultimate responsibility for that move lies with Justin Trudeau. His pipeline vetoes, carbon taxes and added red tape are the cause of this lack of pipeline capacity, and the dire consequences that have followed.

    The prosperity that once flowed from Alberta’s energy sector to communities across our country is a distant memory under Justin Trudeau.

    At the same time, all he’s offered suffering workers and their families is a small government handout. That money might feed families for a few weeks, but the pipelines that get Canadian energy to markets will feed us all for a generation.

    With Justin Trudeau doubling down on his destructive carbon tax and rejecting every attempt to revive struggling pipeline projects, it is clear that he will never take any meaningful step to offer help.

    That’s why I outlined my Conservative plan to get out energy sector back on track. When Conservatives form government we are going to cancel the carbon tax, and repeal Bill C-69. But that’s just our first step. We will also establish firm timelines for pipeline approvals, invoke constitutional authority to build major projects, and eliminate foreign interference in the approvals process.

    Justin Trudeau has done historic damage to Canada’s energy sector. And after this week, everyone understands that it’s going to take a change of government to put an end to this crisis and get our energy sector back to work.

    Hon. Andrew Scheer

    Leader of Canada’s Conservatives


    If you like this, share it!
    Continue Reading

    Trending

    X