Opinion

Opinion Piece from Conservative Leader Andrew Scheer

Published

3 months ago

December 21, 2018

Duane Rolheiser

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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.

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

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Opinion

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

Published

5 days ago

March 20, 2019

Cory G. Litzenberger

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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

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Opinion

Budget 2019 – Don’t spend your new Canada Training Credit just yet

Published

5 days ago

March 20, 2019

Cory G. Litzenberger

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On March 19, 2019, the federal government tabled its election-year budget. One of the new provisions is a refundable credit called the Canada Training Credit. However, the $250 credit won’t even be available until you file your 2020 income tax return in April of 2021.

Further, if you are born in 1995 or later, you won’t qualify yet. If you were born in 1954 or earlier, you would never be eligible.

In addition, the maximum benefit you can receive is $5,000 in a lifetime (which will take 20 years to get at $250 a year) and the benefit can only be used to a maximum of 50% of eligible tuition costs.

So let’s consider the following scenario:

It is 2019 – you are 25 years of age making $27,000 a year and file your taxes every year.

You decide to take advantage of this credit and enroll in your first semester of schooling in the fall of 2023.
According to Statistics Canada, the average Canadian undergraduate pays $3,419 per semester.

So, you take time off work to go to school full-time in the fall, thus reducing your income by 1/3 in the year to $18,000.

Under the current 2019 rules, you would only have $39 in federal income tax. This amount is low because the tuition credits reduce your taxes.

By 2023, you have built up a “pool” of $250 per year after you turned 26, and believe you have a $1,000 pool available for that year.

When you file your 2023 return the $1,000 is triggered as a refundable tax credit. But you won’t be getting $961 back ($1,000 – 39).

Here’s the catch:

The $1,000 pool reduces the amount you can claim for tuition credits as well, which changes the tax owing to $189 Federal income tax. Meaning the $1,000 pool that you waited for is reduced by 15% by the time you pay it out.

Cash in jeans: $811.

But what if the course you decided to go into begins in January of 2023? You go for the January-April semester, work from May-August, and attend school September-December.

Using the same $27,000 – your income is now reduced by 2/3 while attending full time. Your income is only $9,000 as a result of the May-August period.

Your tuition (possibly paid through student loans) is $6,838 for the year.

Your tax is now zero because even before tuition credits you are below the Basic Personal Amount in your earnings.

Does this mean you get the full $1,000?

No.

Because your income is less than $10,000 in 2023, you don’t get the $250 for that year. As such, you only get $750, and your tuition credits available for carryforward are reduced by $750 as well, thus having a future negative impact on tax of $112.50.

Net result: $637.50 cash in jeans

What if you are a parent that decides to stay home with the kids until they are in school full time and go back to school in 2023?
Unfortunately, because you did not make more than $10,000 a year in any of the years, you get zero.

What if you were laid off, collecting regular EI benefits, and decide to go back to school?
Regular EI Benefits don’t qualify for the $10,000 income calculation. As a result, unless you had special EI benefits like parental leave or earned income from another source greater than $10,000, you don’t qualify.

What if you were self-employed through a small business corporation and paid yourself dividends instead of wages and then decided to upgrade your training?
Your dividend income does not qualify, and so you are not eligible for amounts to be added to the pool.

So assuming you qualify, and you wait the four years to build up a pool of $1,000 (remember that the $1,000 is only a net $850 because of the reduction in tuition credits). That same Statistics Canada report says that tuition is increasing at 3.3% per year. That means by you waiting four years so you can get the Net $850 means your annual tuition has likely increased from $6,838 to $7,786 ($948).

You waited four years, and the tax amount you receive won’t even cover the inflationary price increase on tuition.

In Conclusion

Those that do qualify won’t see anything until April 2021; the actual net amount of what they will see is only $212.50; and their annual tuition will likely have increased by $225.65.
Students under the age of 25 will see nothing;
People over the age of 25 that don’t have more than $10,000 of income will see nothing;
Seniors will see nothing;
Parents looking to re-enter the workforce will see nothing; and
People who have been laid off and have less than $10,000 of non-EI income will see nothing.