| Year |
1901 |
1921 |
1951 |
1976 |
2001 |
| Debt
($millions) |
$355 |
$2,929 |
$16,718 |
$61,928 |
$644,900 |
| Population
(millions) |
5.4 |
8.8 |
13.6 |
23.5 |
31.8 |
| Debt per
person (dollars) |
$66 |
$333 |
$1,225 |
$2,641 |
$20,748 |
Source: Statistics Canada Note: 1921 used instead of 1926 (25
year interval) because population for 1926 not available.
Seems we are going in the wrong direction and yet as
taxpayers, we are somewhat complacent to this effect. And in most
cases more concerned individually than nationally on this issue. It
is scary to see over at 25-year period (from 1976 to 2001) our debt
per person has increased near eight fold. What should also give us a
shrill is the growth in obligations under programs such as the
Canada and Quebec Pension Plans, Old Age Security, and Medicare
systems that could increase the debt further.
This
problem likely had some influence on the new legislation passed
through Parliament quickly that came into effect on May 14, 2004.
New is the 10-year limitation period for legal actions to be taken
by the federal government for tax debts and other amounts such as
GST, excise duties, and excise taxes.
The
old limitation period was 6 years with the taxpayer off the hook
should collection not be made within this time frame.
Not
only was the limitation period to collect extended, but also "old
debts" had their clocks reset to begin the new 10-year period on
March 4, 2004. This means CRA has until 2014 to take collection
action on those old debts. This applies even if the taxpayer
obtained a Court order suspending collection based on the precedent
setting collection action for the Markevich decision.
DID YOU KNOW?
If
you run your business from home you can deduct home office expenses
such as your mortgage interest, utilities, repairs, property taxes
in proportion to your business use of the home, even if you are an
employee.
You
can deduct RRSP contributions made to your spouse's RRSP and this
will not affect the RRSP deduction room of your
spouse.
You
can use your RRSP to purchase your first home or to pursue
post-secondary education. Tax-free withdrawals of up to $20,000.00
are allowed under both the Home Buyers Plan and the Lifelong
Learning Plan.
You
are exempt from taxation on up to $500,000.00 of capital gains from
the sale of shares in a qualified small business
corporation.
CRA
has up to 3 years to reassess you from your original tax filings.
The three year clock starts running from the date shown on your
Notice of Assessment you received after you filed your tax
return.
Two
exceptions to the rule are: If you have committed any fraud when you
filed your return. Neglect, carelessness or willful default by you
when filing will open the tax year to be reassessed at any time, but
it will be up to CRA to prove the above has occurred.
Being a director of a corporation or charity may seem
prestigious, albeit you should be aware the title comes with the
hidden liability of GST and source deductions should the corporation
or charity not pay its tax obligations as they come
due.
So
at board meetings this should come up a few times a year to make
sure you are not at risk. If addressed at board meetings frequently,
you could escape liability for un-remitted taxes if you meet what is
called the "due diligence" defence. You are not liable "where the
director has exercised the degree of care, diligence and skill to
prevent the failure of taxes, that a reasonably prudent person would
have exercised in comparable circumstances.
Hope
all are well and please call if you have any questions regarding any
item on this newsletter.
