Note:  While this article was written based on a Quebec example, it is possible to adapt the calculations for residents of other provinces.  Please communicate with an EPR representative in your province for further information.

An individual, wishing to support a charitable organization (“CO”), makes a donation in the hope that his or her contribution will make a difference. Usually, the individual making the donation is more interested in the benefit it will provide the CO rather than its personal tax benefit. For tax purposes, the donation triggers for the individual residing in Quebec in 2013 a tax credit of  48.22 % of the amount donated. Even though the tax credit could be part of a refund for the individual or part of the taxes to pay, the amount of the credit could easily be identified each year.

There is, however, a particular advantage for some specific donors who are owners of shares of a small business corporation (“SBC”). The tax credit obtained by the individual for a donation of his shares could bring more money to the CO than any other cash donation made by the shareholder.

Calculations for the 2013 calendar year show the amount of money a CO would receive from said donation.  In our calculations, we assumed that the tax credit received by a donor resident in Quebec would be given back to the CO in the following year, creating another donation receipt for the donor for the following year. The subsequent donation receipt would allow the donor to obtain another tax benefit that would again be given back to the CO for the following year and so on.

The above calculations were restricted to an individual who is both an employee and a shareholder of a small business corporation whose shares are eligible for the capital gain exemption on SBC shares. The present tax laws allow a shareholder to receive remuneration either as salary or as dividend or a combination of both.

Salary:

The first calculations are based on a standard donation by an individual who received a salary. From that source of income, the employee is then making a donation to the CO. Because we are restricting our calculations to an individual who is a shareholder of a SBC, we looked at the original amount of money in the SBC that is used to pay the salary. We also assumed that the individual was taxed at the highest marginal tax rate of 49.97 % in 2013.

For example, where the SBC uses $ 20,000 of its profits before taxes to pay a salary to its shareholder, the SBC must first pay an amount to the Fonds de service de santé du Québec (“FSS”). The net amount is then paid as a salary to the employee/shareholder, but the SBC must deduct at source and remit a specific amount of personal taxes for its employee.

So out of the original amount of $ 20,000 in SBC, the employee/shareholder receives $ 9,671 after tax that he uses to make a donation. The donor receives a donation receipt for $ 9,671 in year 1 that is deducted in the donor’s personal tax returns. The donor would then receive a tax credit of $4,663 which s/he would subsequently donate to the CO in year 2. The donation receipt of $ 4,663 would create for the following year a tax credit of $ 2,248 that again would be donated to the CO in year 3, and so on.

With the original amount of donation of $ 9,671 in year 1 and with the recurring donations of the perennial tax credits, the CO would obtain a global donation of $ 18,664. Based on the original funds of  $ 20,000 in SBC to pay a salary to its employee/shareholder, the amount received over the years by the CO represents 93.32 % of the original amount in SBC.

Dividend: 

Additional calculations illustrate that the shareholder received a dividend rather than a salary from his SBC. Because the tax integration of a dividend is different from that for a salary, the shareholder/donor is able to donate an original amount of $ 16,200 to the CO. With the recurring tax credits and donations, the CO would obtain an overall donation of $ 19,224. Based on the original funds of $ 20,000 in SBC to pay a dividend to its shareholder, the amount received over the years by the CO represents 96.12 % of the original amount in SBC.

Direct donation by the SBC:

If SBC itself donates its available amount of $ 20,000, the CO would obtain an overall donation of           $ 20,000.  Based on the original funds of 20,000 $ in SBC, the amount received in the year by the CO represents 100 % of the original amount in SBC.

Shares of SBC:

If instead the shareholder of SBC donates some of his SBC shares that are eligible for the capital gain exemption and, assuming that the donor would re-donate his future tax credits to the CO, the CO would obtain an overall donation of $ 31,266.  Based on the original funds of $ 20,000 in SBC, the amount received in the year by the CO represents 156.3 % of the original amount in SBC.

Summary:

Conclusion:

A shareholder of an SBC whose shares are eligible to the capital gain exemption should be advised of all the advantages for him to give some of his shares to a CO, especially if the shareholder does not foresee the exemption of the capital gain on his shares of the SBC. This type of donation would give the CO the highest amount of funds possible, most of it financed by the governments.

Written by Serge-Hugues Ouimet, CPA, CA, a tax professional in our member firms in Quebec.

If you’re concerned about youth unemployment, you can be forgiven for feeling pessimistic. Everyone, it seems, knows it’s harder than ever for Canada’s youth to find work. Except that it’s not.

Youth unemployment tends to be short-lived and there’s little evidence to suggest older workers are crowding younger ones out of the labour market, according to Youth Unemployment in Canada: Challenging Conventional Thinking, a report by CGA-Canada’s research and standards department.

Consider that the peak jobless rate for youth age 15 to 24 during the last recession (15.2 per cent) was lower than at the height of the recessions of the early 80s (19.2 per cent) and 90s (17.2 per cent). And, while the number of jobs hasn’t bounced back since 2008, the quality of jobs has improved.

“What we have learned, is that the younger worker scenario is much more encouraging than one might expect,” notes the association’s report.

That’s not to say that the job situation isn’t tough—it is. But, historically, youth unemployment has been double the national average. And a career position—a job in one’s field of choice—has traditionally required patience and considerable entry-level work. As any older worker knows, that so-called “great job”—one that pays well and is truly meaningful—is generally several jobs away.

What are the options for today’s young workers who are looking for experience and can’t land a job? In the short term, there is plenty of value in doing unpaid internships, taking volunteer positions, and enrolling in skill-specific courses and programs. Resourcefulness is certain to impress a would-be employer.

Is our education system preparing students for the world of work? That’s a huge question and one for another day. What I can suggest is that every student take a hard look at his or her field of study and research the job prospects post-graduation. Knowledge, as the saying goes, is power. At the very least, it can help minimize frustration and disappointment later on.

This article was first published in the January-February 2013 issue of CGA Magazine and can be found here….

The April 2013 issue of The Bottom Line, Canada’s Accounting Top 30, on page 14, EPR Canada Group Inc. is listed the 7th mid-market group of accounting firms in Canada in 2012.  This is up from being the 9th in 2011.  To read the entire article, visit….

Our member firm in Kingston, ON,  Tierney, Simpson & Prytula, has undergone some changes recently.  Effective the beginning of 2013 Joe VanNiedek, CGA and Glen Fitzpatrick, CGA are the new partners at this location.  Outgoing partners, Paul Tierney and Karen Simpson will remain with the firm in a consulting capacity.

Joe and Glen bring several years of public practice experience to their new roles.  Both have spent their entire careers in public accounting.

An accounting, income, commodity and sales tax professional, Glen Fitzpatrick has 25 years experience working with a wide variety of owner managed business clients providing accounting, assurance, income and indirect tax, wealth and estate planning, succession planning, corporate reorganizations and business consulting services.  He has completed the CICA In-Depth Tax Course, the In-Depth GST/HST course and is a member of the Estate Planning Council of Eastern Ontario.

Joe VanNiedek is an audit, accounting and tax professional with 17 years experience working with clients in a variety of private business, corporations and not for profit and charitable organizations. Joe received his LPA in March 2013. His extensive annual professional development includes numerous CICA courses.   Joe is currently the Treasurer of Victim Services of Kingston and Frontenac and a audit/finance committee member of The United Way serving Kingston, Fronetnac, Lennox & Addington.

Tierney, Simpson & Prytula is committed to providing clients with close, personal attention.  They believe in the value of relationships, viewing every client relationship like a partnership, and that the firm’s success is a result of their clients’ success.

By Margaret Craig-Bourdin & Lorie Murdoch
Illustration: Karen Greenberg

It’s a frigid morning in Winnipeg — -42°c with the wind chill — but Paul Labossière couldn’t be toastier as he sits in his office talking about his passion for all things orange. “Bright blaze orange is my favourite colour,” says the 28-year-old accountant, who works as a controller at BioChambers Inc. “I have orange glasses, orange shorts, orange T-shirts, orange sweaters and jackets, an orange toque, and recently added bright reddish orange Adidas running shoes. As a matter of fact, I’m wearing my favourite orange zip-up hooded sweater today. And when I go outside I wear my orange toque to keep my noggin warm.”     Much as he loves his favourite hue, Labossière also has a closet full of suits in what he calls funky tones such as canary yellow, forest green and baby blue. One is a merlot-type purple, with bright (you guessed it) orange stitching. “What I lack in vibrant personality, I make up for in colourful clothing choices,” he says. We’ll have to take Labossière’s word for it on his personality. But because of his choice of orange as a colour favourite, he was the clear standout in a light, informal online survey CAmagazine recently conducted to find out what readers like to do and what makes them tick when they’re not on the job.

Our methods would have made any statistician flinch. We tossed together 40 questions on everything from preferred types of transportation to favourite actors, music, books and wine. Some — such as How would you describe your personality? — were intentionally a little bit out there. We produced the identical survey in English and French and interviewed a few readers for good measure.

Understandably, some respondents were downright irritated: one commented, “Weird survey!” But others got right into it. “Neat survey,” said one. “It’s invigorating to do something new,” said another. “Will be funny to see the results!” said yet another. And then there were the wise souls who took a more holistic view, with comments such as “Life is short — live it to the full” or “The most important pastime open to everyone is learning.”

We cannot be sure just how closely your responses might resemble those of other professions — or even the general population. But even with our rudimentary methods, we were able to notice some obvious trends. For example, many of you seem to like similar colours, hobbies and vehicles. You tend to like the same kinds of music, too.

One interesting byproduct of the survey was the chance to compare our anglophone and francophone results. While some of your choices (for example, types of pets) were almost eerily similar, cultural differences cropped up in other areas, such as your tastes in wine or your favourite shopping haunts.

Below, we’ve grouped together some of our major findings. But what does it all mean? We’ll have to ask for your creative input on that. For more results — and a chance to guess at others (see “Play our ‘favourites’ guessing game,” p. 37) — go to camagazine.com/favourites2013. See you there.

Who are you?
Our typical respondent was female (approximately 60%), came from a large city in Quebec, Ontario, Alberta or BC and fell into the 40 to 54 age group. While the majority have at least one brother or sister, more than half are pet-free and upwards of 46% have no children. Of those who do, two is the magic number (see “Respondent profile,” p. 36).

We asked you to describe your personality, offering choices such as “serious and rational,” “full of jokes” and “sensitive.”  The most common choice for both language groups was — serious and rational. Does that mean there’s an “accountant personality” that overrides language differences? You decide. In any case, differences between the two language groups emerged with the second most popular choice. For anglophones, it was “calm and laid back,” while for francophones, it was “lively and energetic.”

Les Willms

Jeannine Brooks

EPR Canada’s President, Les Willms, and Executive Director, Jeannine Brooks, were recently interviewed for the IECnet Newsletter by their Communications Manager, Emmanuelle Roberts.  Following is a copy of their interview.  For a full copy of the newsletter, click here.

ER: Les & Jeannine, it’s a real pleasure to share some ideas about IECnet & EPR.

Q – Jeannine, What does this Alliance with IECnet mean for EPR?

JB: An Alliance with IECnet means that we can network with professional accountants from across the world and share ideas and opportunities. This Alliance gives EPR Member Firms the comfort knowing that they can serve their clients if ever there is an international need arising in the future.

At EPR Canada Group we feel that it is important to have global connections and learn more about what professional accountants are faced with in their respective countries. We are more aware of international accounting standards and taxation issues. We can use the synergy of two groups of accounting firms to get stronger and more efficient in our own markets. As a marketing tool, having an affiliation with an international association (network) raises our profile of our firms and association.

Q:  Jeannine, Rome was the first time EPR did their AGM with IECnet. Was this important to EPR?

JB:  It was important to EPR because we had a chance to meet face-to-face with our colleagues from around the world and to learn that professional accountants are not very different no matter where you are and that we all face the same challenges. To share knowledge and have fun together created a bond between our members and we all came back from this experience richer in many levels. The presentations from representatives from different countries on taxation, accounting standards and law, were professional and very informative. The Roundtable discussions were valuable where everyone shared their experiences and discussions took place on predetermined topics.

We developed friendships and connections that we could not have otherwise. It gave our member firms a chance to visit the beautiful city of Rome and have a lot of fun while at it !

Q – Les & Jeannine, which areas of expertise is EPR the most interested in?

International taxation, cross-border transactions, transfer pricing, business valuation and corporate finance. We are continuing to develop our expertise in Taxation and Accounting Standards. We have Specialty Committees on the topics and are looking at ways to develop further. The Committee is responsible to write articles, Case Studies, webinars and seminars. The Committee is also keeping all Member Firms updated on the changes in the Accounting standards and Tax Rules. This year we are concentrating on Business Valuation and Corporate Finance. There are other areas of expertise we are interested in but will concentrate on later such as Human Resources, Agriculture, Mining, etc.

Q – Les, your firm is in Calgary, Alberta. What sector do you work the most in?

LW : We work in all sectors but the largest being the oil and gas support area.

Q – Jeannine, how do you feel about IECnet’s growth in Central & South America?

JB: Central and South America is an area which is growing and it is important to have connections with accountants in the area. We are interested in the efforts IECnet is making to develop that area.

To learn more about IECnet visit their website: http://iecnet.net/

Highlights

Article by Thomas Kaddour

JWT, a global advertising agency, outlined the top 10 consumer trends for 2013 in its annual Trends Report, which focused on mobile and new media channels as well as the concept of consumer wellness.   As many associations seek ways to provide long-term value, there are creative and cost-effective ways to capitalize on these trends (and some areas that you might be missing).

As consumers increasingly expect innovation in their personal lives, the same expectations will transfer into the professional world.  We have interpreted these trends and outlined how they can apply to you and your association.

Trend #1:  ’Play’ As a Competitive Advantage

The value of unstructured ‘play’ time as a conduit for creativity and innovative, expansive thinking is finding its home in the workplace, but what about the boardroom?  Full and multi-day meetings can have a lagging effect on idea generation, attention span, and energy levels.  Consider adding ‘play’ into regularly scheduled meeting breaks that allows for the mind to recover while still being stimulated.  This will translate into an increase in attentiveness and volunteer retention.

Trend #2: The Super Stress Era

Stress, and more importantly the focus on stress reduction, will remain significant in 2013.  The development of new products and services to make members’ lives easier should be top-of-mind when assessing proposals or strategic goals.  Industry associations should consider taking positions on the relatively unknown, such as new legislation or emerging technologies.  The concept of adding value through association channels won’t change, but the value that members are seeking will.

Trend #3:  Intelligent Objects

We’re interacting with technology in more ways than ever and our tech-infused lifestyles will continue to evolve.  Even if you’re not producing energy efficient technology, being aware of consumer interests can help guide the next promotional product selection, member giveaway, or conference delegate bag gift.

Trend #4:  Predictive Personalization

You’re familiar with open rates, click rates, opt-outs and bounce backs, but what are you actually doing with this measurable data?  Identifying segments to specially target members or prospects with information that they want will boost efficiency and results.  Everything from linking website clicks to member accounts to historical event registration data can help your association tailor products and services at the individual level.

Trend #5:  The Mobile Fingerprint

Smartphones have the capacity to manage our calendars, personal contacts, flight bookings and even bank accounts, and the trend won’t be stopping there.  With point-of-sale mobile apps available, like Beamstream mobile and EventMobi’s event app, consumers will be finding new ways to stay reliant on their devices.  The end of printed event programs and meeting minutes is not far away.

Trend #6: Sensory Explosion

If marketing efforts are getting lost among the masses, it could be because your execution is not memorable enough.  Competing with sensory brand campaigns and out-of-home engagement, associations will need to shift away from traditional email  marketing campaigns and stress the member experience.  Finding opportunities to provide a preview of member benefits and advantages can help prospects find out what they’re really missing.

Trend #7:  Everything is Retail

Billions of consumer dollars are spend online each year, increasing the relevancy of online and mobile shopping for businesses.  Providing new channels to process event registration or membership renewals can help your association meet the needs of online shopping trends.  Combined with “the mobile fingerprint” and “sensory explosion” trends, the way consumers purchase has rapidly evolved.

Trend #8: Peer Power

Through personal and professional networks, the peer-to-peer marketplace will influence purchasing behaviour.  Promoting positive online feedback and engagement adds credibility to your association.  Be aware of your members preferred social media channels and don’t forget to monitor metrics here either!

Trend #9:  Going Private in Public

Trends point toward consumers reclaiming their private lives with increased focus on and control over their publicly available information.  Ensuring privacy standards are met is an absolute minimum requirement, but providing members with an opportunity to control the disclosure of their personal information will be met with positive reactions.

Trend #10:  Health and Happiness

The concept of healthier and happier consumers will remain prevalent in 2013, evident through the brand focus on healthy options and new information on making healthier choices.  Consumer product knowledge and expectations have increased, along with the expectation of transparency at the corporate level.

Thomas Kaddour is the Senior Account Coordinator, Strategy and Development at Managing Matters Inc., an association management and event management company located in Toronto, Canada.

This article is from the March issue of The Association Agenda, published by The Canadian Society of Association Executives, http:www.csae.com.