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Saturday, January 21, 2012

Federal Tax Garnishment

Federal Tax Garnishment

Provincial laws allow a creditor to enforce a debt by seizing assets or by garnishing third-party debts owed to the judgment debtor, but exemptions for some of the debtor's property limit the pace and scope of collection. For example, Ontario's Execution Act protects trade tools and basic furnishings from seizure; its Pension Benefits Act exempts money payable under a pension plan; its Insurance Act exempts life insurance and death benefits under an accident and sickness policy; and its Wages Act exempts 80 percent or more of wages and disability payments (net of source deductions). In Quebec (Attorney General) v. Canada (Human Resources and Social Development) (2011 SCC 60), the SCC concluded that a Quebec enforcement exemption for pension payments does not limit federal garnishment powers in the Employment Insurance Act (EIA).

Exemptions recognize that a seizure or garnishment of too much of the debtor's property is of no social value because it destroys the debtor's ability to work and live and thus his continuing ability to pay his debts and contribute to society. (See, for example, Mutter (Re), 2009 ABQB 28.) The underlying purpose of enforcement laws is to collect debts, not to punish the debtor by afflicting him with poverty. Nonetheless, garnishment rules in federal tax laws offer no enforcement exemption: the CRA and other revenue authorities can collect without limit, starving a business of funds to pay suppliers and staff or leaving an employee without money to pay rent or other living expenses. (See ITA subsection 224(1), ETA subsection 317(1), Canada Pension Plan Act section 23(2), and EIA section 126(4).)

The SCC might have opened its analysis with an examination of Crown immunity and sidestepped a determination of whether the federal law was paramount to the provincial law. But (1) the common-law rule "has been eroded somewhat"; (2) "the exceptions to the Crown immunity rule are now so numerous that the current law in this field is considered to be exceedingly complex"; and (3) "the immunity rule has tended to benefit the federal Crown asymmetrically." Instead, the SCC turned to the doctrine of federal paramountcy, which it said applied to two forms of conflict.

The first is operational conflict between federal and provincial laws, where one enactment says "yes" and the other says "no," such that "compliance with one is defiance of the other": . . . In Bank of Montreal v. Hall, [1990] 1 SCR 121, at p. 155, La Forest J. identified a second branch of paramountcy, in which dual compliance is possible, but the provincial law is incompatible with the purpose of federal legislation. . . . Federal paramountcy may thus arise from either the impossibility of dual compliance or the frustration of a federal purpose.

The court concluded easily that there was no operational conflict because the employment insurance commission could comply with the provincial exemption and still collect its debt at a reduced pace. (Theoretically, because pension benefits were exempt provincially, debt collection was impossible if the EI beneficiary had no other seizable source of income or asset.) After reviewing four earlier SCC decisions, the court concluded that to determine whether a conflict of purposes existed between the EIA garnishment power and the Quebec exemption, "it is necessary to consider each of the provisions in issue in its context and to review its legislative purpose in order to clarify its scope."

The court began by saying that "it is apparent from the purpose and scope of the federal measure that Parliament did not consent to the restriction imposed by the provincial provision." It then examined the EIA and related tax rules to show that Parliament is explicit when it wishes to subordinate tax collection rules to provincial exemptions. The SCC considered EIA section 126(1), which allows the commission to certify an amount payable and file a certificate with the Federal Court that "has the same force and effect, and all proceedings may be taken, as if the certificate were a judgment obtained in the [Federal] Court." (See also ITA subsection 223(3) and ETA subsection 316(2).) Federal Courts Rules 448 and 452 apply the provincial exemptions to seizures of assets and garnishment of wages under an FC judgment, and thus the certificate process is subject to provincial exemptions.

However, the CRA and the EI commission can instead use garnishment powers to collect assessed amounts by issuing a requirement to pay and never filing a certificate in the FC or any other court. Looking to the ITA rules for clearer proof of Parliament's intent, the SCC noted that under ITA subsection 225(1) the CRA can seize and sell a tax debtor's goods and chattels on 30 days' notice and exercise its power without resort to any federal or provincial court. However, an explicit rule in ITA subsection 225(5) renders these seizures subject to provincial exemptions. Thus, the SCC concluded that Parliament must be understood to have intended the EIA garnishment to be free of provincial exemptions due to the lack of an explicit rule such as that in ITA subsection 225(5). (Like the EIA provisions, the ITA subsection 224(1) and ETA subsection 317(1) garnishment rules are not subject to provincial exemptions.)

Parliament has, in enacting s. 126(4) EIA, chosen to give the Commission a freestanding positive right to require a third party to pay to the Receiver General any amount the third party owes a person who is liable to make a payment under the EIA, on account of that person's liability. The purpose of this measure is to ensure the integrity of the employment insurance [or the Income Tax, CPP, and Excise Tax] system by making it possible to recover amounts owed under the EIA, including benefit overpayments, in a simple and summary fashion, without regard for the provincial rules respecting exemption from seizure. This purpose would be frustrated if the Commission were to comply with the provincial provision creating an exemption from seizure.

Under section 91 of the Constitution Act, 1867, Parliament has "the exclusive Legislative Authority" to make laws within the "subjects" of "Unemployment insurance" and "The raising of Money by any Mode or System of Taxation." To give effect to those powers, Parliament must have the authority to make necessary and incidental laws, including laws to enforce the collection of tax. The SCC's decision thus seems sound: it is within Parliament's constitutional authority to legislate tax garnishment rules that are not subject to provincial exemptions.

One legislative means of softening the federal tax collection rules is to add tax garnishment exemptions. Another approach is to grant the CRA the power to compromise tax debts and collect less than the assessed amount: for example, taxpayer relief rules could be expanded to include a waiver of part of the tax debt itself. Currently, that remedy is available only through an elaborate remission order process.

However, a taxpayer for whom the provincial exemptions are intended is likely eligible to make a consumer proposal under division II of part III of the Bankruptcy and Insolvency Act (BIA). A proposal can stop collection action within a few days--quicker and more certain relief than that offered by the objection and appeal process for challenging assessments. Under a proposal, a debtor may offer a lump-sum payment or periodic payments for up to five years. The CRA may reject a consumer proposal, especially if it holds the majority of the debt, but in practice the CRA often seems to agree to a proposal that offers a reasonable amount of recovery, even if it is far less than the assessed amount. The proposal process allows a tax authority to agree to compromise the debt, a power otherwise unavailable to it. Even if the CRA rejects a proposal, the tax debtor may declare bankruptcy, and Directive no. 11R, "Surplus Income" (Office of the Superintendent of Bankruptcy Canada, October 3, 2000), protects monthly income below "the Low Income Cutoffs (LICO) released by Statistics Canada." Furthermore, BIA section 67(1)(b) is expressly subject to provincial exemptions in the determination of the "property of a bankrupt divisible among his creditors." Effectively, the BIA--a federal law that is constitutionally on a par with federal tax laws--allows a taxpayer the exemptions from seizures that "preserve to debtors the means to survive and to earn a living, thus contributing to their rehabilitation as citizens and to their capacity to repay their debts" (Mutter).

Richard Yasny
Payne Law, Toronto

Canadian Tax Highlights
Volume 20, Number 1, January 2012
©2012, Canadian Tax Foundation

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New Director and Past Non-Remittance

New Director and Past Non-Remittance

A recent technical interpretation (TI 2011-0412471E5, November 4, 2011) confirms that a new director is not liable for interest that accrues on a corporate liability that arose from a former director's failure to remit source deduction amounts.

Generally, if a corporation has failed to deduct or withhold an amount or has failed to remit that amount as required by section 153, subsection 227.1(1) provides that both the corporation and its directors are jointly and severally liable to pay the amount and any related interest or penalties.

In the TI, a corporation with a sole director withholds source deduction amounts under subsection 153(1), but fails to remit them. Following the last remittance deadline, the sole director resigns and is replaced by a new director. The corporation no longer has employees, and thus there are no new withholding requirements except what the previous director was required (and failed) to remit. At issue is whether the new director can be held liable for interest on arrears related to the company's unremitted source deductions that arose before he became a director.

In its analysis, the CRA noted that only a person who was a director at the time the corporation failed to remit the amounts deducted or withheld under subsection 153(1) is jointly and severally liable under subsection 227.1(1). The CRA noted that this provision limits the liability to a person who was a director at the time when the corporation failed to remit. The CRA concluded that a new director is not liable for interest imposed against the corporation under either subsection 227(9.2) or 161(1) for an amount that the corporation failed to deduct, withhold, or remit before that individual became a director.

Jim Yager
KPMG LLP, Toronto

Canadian Tax Highlights
Volume 20, Number 1, January 2012
©2012, Canadian Tax Foundation

Post-Secondary Education Outside Canada, Part 1

Post-Secondary Education Outside Canada, Part 1

A student who plans to enrol in a foreign university, college, or other post-secondary educational institution outside Canada should consider the Canadian tax implications as part of the potential cost or benefit of attending the foreign school. This article considers the student's residence status and her eligibility for Canadian income tax credits for tuition, education, and textbooks. A future article will discuss other tax issues, such as those relating to scholarships, fellowships and bursaries, moving costs, and RESPs.

Residence status. The student's residence for income tax purposes determines her obligation to file a Canadian income tax and benefit return for a particular year. Before leaving Canada to attend school, the student should consider whether the move will be temporary or whether residential ties with Canada will be severed permanently. In most cases, a student who attends a foreign education program is still a Canadian resident and must file a Canadian income tax return. However, Canadian income tax obligations should be reviewed every year; if the student ceases to be a Canadian resident, Canada's departure tax regime can trigger significant tax implications, particularly if the student holds shares in the family's private business.

Tax treaties and residence. Even if a student is a resident of the foreign country under its domestic tax law, she may still be considered a Canadian resident under the applicable tax treaty. Tax treaties contain tiebreaker rules designed to ensure that for tax purposes a taxpayer is deemed to be a resident of only one country and thus does not pay tax twice on the same income. Canada has tax treaties with many countries, including Australia, the United States, and the United Kingdom, which are common destinations for Canadian post-secondary students. If the student is deemed to be a Canadian resident under the relevant treaty, she must file a Canadian income tax return that reports her worldwide income for the particular taxation year.

Foreign schools that qualify for Canadian tax credits. For a student to be eligible to claim tuition, education, and textbook income tax credit amounts on her Canadian income tax return, the student's foreign school must qualify as a "university outside Canada." To qualify, the foreign school must (1) have authority to confer academic degrees of at least the bachelor's level or equivalent, according to the education standards of the country where it is located; (2) have an academic entrance requirement of at least secondary school matriculation; and (3) be organized for teaching, study, and research in the higher branches of learning. Institutions that the CRA accepts as qualifying are listed in schedule VIII of the regulations. If the school qualifies as a "university outside Canada," the student must forward one of the following forms to the school to have it complete the form and certify the eligible fees: form TL11A ("Tuition, Education, and Textbook Amounts Certificate--University Outside Canada") or form TL11C ("Tuition, Education, and Textbook Amounts Certificate--Commuter to the United States"). The completed form should be retained in the student's records--in case of an audit by the CRA--and need not be included in the student's tax return.

Eligibility for tuition tax credit. A non-refundable tuition fee tax credit is available only if (1) the course leads to a bachelor's degree or higher; (2) the course lasts at least three consecutive weeks (reduced from 13 weeks by federal Bill C-13, An Act To Implement Certain Provisions of the 2011 Budget as Updated on June 6, 2011 and Other Measures (SC 2011, c. 24); (3) while enrolled, the student is considered to be in full-time attendance; and (4) the tuition fees are eligible fees and have been paid. As long as the fees are eligible, there is no upper limit, but more than $100 in fees must be paid for the year to the institution. Eligible fees include admission fees, charges for the use of library or laboratory facilities, exemption fees, examination fees, application fees (but only if the student subsequently enrols), and charges for a degree. Non-eligible fees include fees for student activities (social or athletic), medical care or health services, transportation and parking, and board and lodging, and administrative penalties incurred when a student withdraws from a program or university. A tuition fee tax credit is available federally and in all provinces and territories.

Courses taken over the Internet normally do not qualify for the tuition fee tax credit. To be considered in full-time attendance, the student must be physically present at the institution or be present via scheduled interactive virtual classroom sessions. Courses for which students study largely at their own pace and for which assignments are submitted electronically using a correspondence method do not qualify for the tuition credit, but they may be eligible for the education and textbook tax credit.

Eligibility for education and textbook tax credits. To claim the federal education amount of $400 for each eligible month, the student must be a full-time student enrolled in a qualifying education program, and the course must last at least three consecutive weeks (reduced from 13 weeks by federal Bill C-13) and lead to a bachelor's degree or higher. A part-time student who is enrolled in a specified education program may be able to claim the federal education amount of $120 for each eligible month. The education credit does not require that the student be in full-time attendance, but she must be considered to be taking a full-time course load. A student who qualifies for the education credit as a full-time student may also claim a federal $65 textbook amount for each eligible month (a part-time student may claim $20 for each eligible month). All provinces and territories also offer an education tax credit (although Quebec has different rules), but only Nunavut and Yukon offer a textbook tax credit; the provinces and territories set their own amounts for these credits.

Living in Canada and commuting to a US educational institution. Some different rules apply if the student lives in Canada all year and commutes regularly to the United States to take courses--for example, a student who is enrolled in a teachers' college program. For the tuition credit, form TL11C must be completed and the fees paid must consist of eligible tuition fees of more than $100; the student need not be in full-time attendance. For a commuter, neither the tuition credit nor the education and textbook credit requires that the course last three consecutive weeks (reduced from 13 weeks by federal Bill C-13) or lead to a degree; otherwise, the requirements for those credits are the same as those for non-commuters who use form TL11A.

Transfer of unused tuition, education, and textbook credits. The tuition, education, and textbook credits must be first claimed on the student's personal tax return, even if the amounts were paid by someone else, such as a parent or grandparent. If the student cannot use the full amount paid, the unused portion may be transferred to the student's spouse, common-law partner, parent, or grandparent, or may be carried forward to a future year. In any given year a student can transfer a maximum of $5,000 of tuition, education, and textbook amounts earned in the year to the extent that the student does not require them to reduce her tax payable to nil. These rules apply federally and in all provinces and territories, except in Ontario, which has a different maximum, and in Quebec, which has different rules.

Brennan Caiella and Beth Webel
PricewaterhouseCoopers LLP, Hamilton

Canadian Tax Highlights
Volume 20, Number 1, January 2012
©2012, Canadian Tax Foundation

US Citizens Living Abroad: IRS Filing Guidance

US Citizens Living Abroad: IRS Filing Guidance

A recently released IRS fact sheet (FS-2011-13, December 2011) provides guidance to US citizens who reside outside the United States and who have failed to file US tax returns and form TD F 90-22.1 ("Report of Foreign Bank and Financial Accounts (FBAR)"). A US citizen is generally required to file a US federal tax return to report his worldwide income, regardless of where he resides. In addition, a US citizen must generally file an FBAR if he has a financial interest in, or signature authority over, certain types of non-US financial accounts (bank accounts, securities accounts, mutual funds, and RRSPs) whose aggregate value exceeds $10,000.

Tax returns. The fact sheet confirms that a US citizen who is resident abroad and owes no US tax for the prior six tax years (currently, 2005-2010) may file US tax returns for those years without penalties for failure to file or to pay tax. Many US citizens resident in Canada fall into this category due to the availability of US foreign tax credits for taxes paid in Canada.

For a US citizen who owes US tax, the fact sheet indicates that the IRS will consider whether, on the facts, the failure to file or pay tax was due to reasonable cause. The IRS will consider whether the taxpayer exercised ordinary business care and prudence in meeting his tax obligations and other factors such as (1) the specific reasons given by the taxpayer; (2) his compliance history; (3) the length of time between his failure to meet his tax obligations and his subsequent compliance; and (4) circumstances beyond his control.

On the basis of the following factors, the IRS may conclude that the taxpayer has established reasonable cause for not being aware of specific obligations to file returns or pay taxes: (1) the taxpayer's education; (2) whether he was previously subject to the tax; (3) whether he was previously penalized; (4) whether there were recent changes in the tax forms or law that he could not reasonably be expected to know about; and (5) the level of complexity of a tax or compliance issue. Reasonable cause for non-compliance may also be established due to ignorance of the law if a reasonable and good faith effort was made to comply with the law or the taxpayer was not aware of, and could not reasonably be expected to be aware of, the requirement.

FBARs. The fact sheet also provides guidance for a taxpayer who failed to file an FBAR. In the absence of reasonable cause, a US citizen residing abroad who failed to file an FBAR may suffer penalties. The total penalties can be harsh, because a penalty is imposed per violation--that is, per account per year. The maximum penalty is $10,000 per non-wilful violation and more per wilful violation.

To establish reasonable cause, a US citizen who resides outside the United States should file a delinquent FBAR for each of the prior six years (2005-2010) and attach a statement indicating the reasons why he is filing late. Although no single factor is determinative, the IRS lists some factors that may weigh in favour of a finding that reasonable cause exists, including the following: (1) the individual relied on the advice of a professional tax adviser who was informed of the existence of the foreign financial account; (2) the unreported account was established for a legitimate purpose and no efforts were made to intentionally conceal the reporting of income or assets; and (3) there is no or only a de minimis tax deficiency related to the unreported foreign account. The IRS also considers factors that weigh against a finding of reasonable cause, including the following: (1) the taxpayer's background and education indicates that he should have known of the FBAR reporting requirements; (2) a tax deficiency relates to the unreported foreign account; and (3) the taxpayer failed to disclose the existence of the account to his tax preparer.

The fact sheet also reminds US taxpayers that, starting in 2012 and in addition to a taxpayer's FBAR reporting obligations, he must report in his US tax return on form 8938 any interest in certain foreign financial assets with an aggregate value exceeding $50,000.

The fact sheet is particularly welcome guidance for many US citizens resident in Canada: the 2009 and 2011 offshore voluntary disclosure programs (VDPs) frequently resulted in harsh penalties for US citizens resident abroad who were unaware of the need to file US income tax returns and FBARs, and the VDPs' parameters did not give IRS examiners any discretion to consider reasonable cause. However, many unanswered questions persist for non-filers. For instance, it is not clear whether the IRS will entertain reasonable-cause arguments for failure to file certain information returns (such as forms 5471 and 3520). In addition, the US tax treatment of RRSPs and other Canadian plans remains uncertain if no timely election was made to defer tax on the plan's income. The fact sheet notes that the IRS is continuing to review these issues and may provide additional guidance.

On January 9, 2012, an IRS news release (IR-2012-5) announced the reopening of the offshore voluntary disclosure program (VDP). The new VDP will be discussed in the February 2012 issue of Canadian Tax Highlights.

Marla Waiss
Hodgson Russ LLP, Buffalo

Canadian Tax Highlights
Volume 20, Number 1, January 2012
©2012, Canadian Tax Foundation

Thursday, January 19, 2012

Monetary Policy Report - Bank of Canada

Home > Publications and Research > Periodicals > Monetary Policy Report

Monetary Policy Report

A quarterly report of the Bank of Canada’s Governing Council, presenting the Bank’s base-case projection for inflation and growth in the Canadian economy, and its assessment of risks.

The tables are updated one day after the Bank's most recent announcement date for the target overnight rate, based on information available up to that date.

  1. Monetary Policy Report - January 2012

    Monetary Policy Report - January 2012


    The Canadian economy is estimated to have grown by 2.4 per cent in 2011, and is projected to grow by 2.0 per cent in 2012, and 2.8 per cent in 2013, returning to full capacity by the third quarter of 2013. Total CPI inflation is expected to return to the 2 per cent target by the 3rd quarter of 2013.

    Related Information

    Release of the Monetary Policy Report  -  18 January 2012

    Opening Statement - Mark Carney - Ottawa, Ontario

    January 2012 - Monetary Policy Report press conference: video

    Webcast of a press conference by Governor Mark Carney and Senior Deputy Governor Tiff Macklem.

    January 2012 - Monetary Policy Report press conference: audio

    Governor Mark Carney and Senior Deputy Governor Tiff Macklem speak to media at the National Press Theatre in Ottawa.

Sunday, January 15, 2012

Mise à jour du marché résidentiel

Market Commentary The performance of Canada Mortgage Bonds (CMB) of five years, offered by the Canadian government, fell by about 8 basis points last week, mainly because of widespread pessimism regarding the economy for the new year and dire predictions made ​​by economists of the major Canadian banks. Indeed, economists are forecasting an increase of less than 2% and no significant improvement in the unemployment rate. The rate of unemployable Canadian increasing for three consecutive months, unfortunately reinforces this sad overview: In December, the rate rose one-tenth of a percentage point to 7.5%. Due to continued uncertainty in global markets, it is more expensive to finance other credit products (eg, private sector securities, mortgages), in line with funding levels of governments

Mise à jour du marché résidentiel

Market Commentary The performance of Canada Mortgage Bonds (CMB) of five years, offered by the Canadian government, fell by about 8 basis points last week, mainly because of widespread pessimism regarding the economy for the new year and dire predictions made ​​by economists of the major Canadian banks. Indeed, economists are forecasting an increase of less than 2% and no significant improvement in the unemployment rate. The rate of unemployable Canadian increasing for three consecutive months, unfortunately reinforces this sad overview: In December, the rate rose one-tenth of a percentage point to 7.5%. Due to continued uncertainty in global markets, it is more expensive to finance other credit products (eg, private sector securities, mortgages), in line with funding levels of governments

Saturday, January 14, 2012

The Principal-Residence Exemption and Excess Land

The Principal-Residence Exemption and Excess Land

The capital gain arising on a disposition of a "principal residence" (defined in section 54 of the Act) is reduced or eliminated by the amount of the exemption calculated under the formula in paragraph 40(2)(b). The principal residence of a taxpayer for a taxation year is deemed to include the land on which the housing unit sits and the portion of the immediately contiguous land that can reasonably be regarded as contributing to the use and enjoyment of the housing unit as the residence. If the total area of the subjacent land and the immediately contiguous land exceeds one-half hectare, the excess land is deemed not to be part of the principal residence unless the taxpayer establishes that the excess land was necessary to the use and enjoyment of the housing unit as a residence.

In Cassidy v. Canada (2011 FCA 271), the issue was whether the excess land formed part of the taxpayer's principal residence. The taxpayer and his common-law spouse acquired a house on 2.43 hectares of land in 1994. The taxpayer became the sole owner of the property in 1998, and he resided in the house on the property from 1994 until 2003, when the property was sold.

At the time that the taxpayer acquired the property, he could not acquire less than the 2.43-hectare parcel because of the applicable zoning laws. From May 2003 onward, he could have applied for a rezoning and subdivision of the property by virtue of an official plan amendment that came into force at that time. On May 23, 2003, the taxpayer entered into an agreement of purchase and sale of the property subject to certain conditions for the benefit of the purchaser, including a successful application for rezoning and subdivision. All conditions were satisfied, and the sale closed on November 27, 2003.

The taxpayer did not report a gain in his 2003 income tax return on the basis that the entire gain qualified for the principal-residence exemption. The CRA reassessed the taxpayer on the basis that the excess land did not qualify for the exemption. The TCC (2010 TCC 471), relying on Stuart Estate v. The Queen (2003 DTC 329 (TCC), aff'd. 2004 DTC 6173 (FCA) and The Queen v. Yates (83 DTC 5158 (FCTD), aff'd. 86 DTC 6296 (FCA), dismissed the taxpayer's appeal on the basis that the time for determining whether the excess land was necessary for the use and enjoyment of the property was the time of disposition or immediately before the disposition. Favreau J held that at the time of sale or immediately before, the minimum lot size in the area was 850 square metres, and the taxpayer was not prohibited from subdividing his property and disposing of any portion of it.

On appeal, the FCA analyzed the formula in paragraph 40(2)(b). Under that formula, the exempt portion of the gain is A × B/C, where A is the amount of the gain, B is 1 plus the number of taxation years that end after the purchase date for which the property was the taxpayer's principal residence and during which the taxpayer is resident in Canada, and C is the number of taxation years of property ownership by the taxpayer.

The FCA held that variable B requires that for each taxation year in which the property was owned by the taxpayer, one must determine whether the property met the definition of "principal residence." The court held that when the issue is whether the excess land is part of the principal residence, the formula should be applied in two stages: first to the portion of the gain allocable to the house and the one-half hectare of land, and then to the portion of the gain allocable to the excess land. Using the two-stage process, the court determined that the entire gain allocable to the house and one-half hectare of land was entirely exempt, as was the gain allocable to the excess land. With respect to the excess land, the court held that it qualified for the principal-residence exemption for 1994 to 2002; the court did not reach a conclusion with respect to 2003. Therefore, variable B was 10 and no capital gain arose with respect to the excess land.

In allowing the appeal, Sharlow JA considered or commented on several earlier cases, including Stuart Estate and Yates, which were distinguished on the basis that the facts relevant to the application of the one-half hectare rule had not changed during the period of ownership.

Cassidy is a welcome decision and changes our understanding of how the principal-residence exemption is determined. The determination is now made on an annual basis, and if excess land is involved, the two-stage method is to be used.

Philip Friedlan
Friedlan Law
Toronto and Richmond Hill, ON


Tuesday, January 10, 2012

Canadian Housing Observer | CMHC

Canadian Housing Observer CMHC

Combining a wide-ranging annual review of the state of Canada's housing and a substantial collection of online data resources, the Canadian Housing Observer will help you improve your understanding of housing trends and conditions and of key factors driving Canadian housing markets!

Saturday, January 7, 2012

January issue of CAAMP Stats

CAAMP Header Stats
January 2012

Happy New Year. Welcome to the January issue of CAAMP Stats. For more information on CAAMP please visit


Bank of Canada Interest Rate
October 25, 2011 1.00 %
December 6, 2011 1.00 %
January 17, 2012 Next meeting date
Source: Bank of Canada
Top of Page

Bank Prime Lending Rate
October 26, 2011 3.00 %
December 7, 2011 3.00 %
January 18, 2012 Next meeting date
Source: Bank of Canada
Top of Page

Conventional Mortgage - 5 Year Rate*
October 12, 2011 5.29 %
November 16, 2011 5.29 %
December 21, 2011 5.29 %
Source: Bank of Canada
*Determinant for high ratio mortgage variable qualifying rate
Top of Page

US Federal Reserve Board Discount Rate
November 2, 2011 0.00 % - 0.25 %
December 13, 2011 0.00 % - 0.25 %
January 25, 2012 Next meeting date
Source: US Federal Reserve
*US Federal Reserve has indicated it will keep this rate until Q2 2013
Top of Page

Exchange Rate $CDN($US)
December 1, 2011 0.9859
December 14, 2011 0.9619
December 30, 2011 0.9833
Source: Bank of CanadaTop of Page

Government of Canada Bonds
Bond Type November 16, 2011 November 30, 2011 December 14, 2011
1 year Treasury Bill 0.87% 0.92% 0.86%
3 year Benchmark
Bond Yield
1.02% 1.10% 0.93%
5 year Benchmark
Bond Yield
1.36% 1.46% 1.25%
10 year Benchmark
Bond Yield
2.09% 2.15% 1.95%
Source: Bank of CanadaTop of Page

Total New Housing Starts (Seasonally adjusted and annualized)
October 2011
Nova Scotia
New Brunswick
British Columbia
Source: CMHC Housing Now - December 2011 and December 2010. This seasonally adjusted data goes through stages of revision at different times of the year.

Average MLS® Resale Price for Local Markets
November 2010
November 2011
$ 252,554
$ 262,714
Saint John
$ 170,610
$ 159,101
$ 244,587
$ 250,888
$ 305,042
$ 322,808
$ 325,150
$ 347,675
$ 437,999
$ 480,421
$ 310,492
$ 342,005
$ 226,886
$ 236,127
$ 312,893
$ 314,541
$ 265,590
$ 273,243
$ 398,619
$ 398,722
$ 318,538
$ 319,559
$ 699,009
$ 728,118
$ 511,648
$ 499,676
Source: Canadian Real Estate Association

Annual Provincial House Prices and Increases
Average Home Price - Thousands
Average Home Price - Per Cent Change