Bank of Montreal is bringing back its controversial 2.99 per cent five-year fixed-rate mortgages.

BMO sparked a mortgage price war among the banks early last year when it first introduced the rate, one that angered Finance Minister Jim Flaherty, who has been worrying that Canadians are taking on too much mortgage debt. The bank stopped offering the rate later in 2012.

The bank is now cutting the rate on five-year fixed mortgages from 3.09 per cent to 2.99 per cent, effective immediately.

It said the rate will only be offered on mortgages with a length of 25 years or less. Mr. Flaherty tightened the mortgage rules in July and those changes included saying the government would only backstop insurance on mortgages of 25 years or less, down from 30 years. It was one of numerous changes he has made in an effort to make it slightly harder for consumers to obtain mortgages, as he’s sought to cool the growth of debt levels and house prices.

When the banks engaged in a mortgage price war early last year, Mr. Flaherty urged caution.

“You should be cautious about your lending practices, because this is the type of practice that led to a mortgage crisis in the United States several years ago,” he has said he told them. “So my expectation is that you will not compete to the bottom on interest rates, which is the direction they were going.”

In a press release Ernie Johannson, senior vice-president of personal banking in Canada for BMO, said “BMO’s efforts to encourage Canadians to pay down debt and build equity in their homes have been aligned with Minister Flaherty’s timely and prudent actions to encourage moderation in the housing market.”

By Goldy Hyder

Canadian business and political leaders are at last waking up to the importance of India. But they need to be aware that Indian attitudes toward Canada are changing too.

 The Harper government has committed itself to an important goal: to complete negotiations on a free trade agreement with India by the end of 2013. Given the scope and complexity of the proposed agreement, which could include provisions related to federal and subfederal procurements, it is an ambitious and aggressive undertaking — yet it is absolutely vital to Canada’s continued economic prosperity. By the government’s own estimates, a comprehensive economic partnership agreement with India has the potential to triple bilateral trade from $5 billion to $15 billion as soon as 2015. If the full potential of the agreement is achieved, some observers contend, Canada’s GDP could in-crease by $6 billion, creating as many as 40,000 new jobs. At a minimum, a trade deal would provide Canadian business-es with a massive competitive advantage: preferential access to more than 1.2 billion consumers.

 Curiously, despite ample evidence and intertwined national histories, Canadians have been among the last to fully acknowledge and join the West in a renewed interest in India. Western interest in India had lapsed after centuries of cultivating trading ties with the Indian subcontinent (after all, European settlement of North America was an unexpected outcome of Christopher Columbus’ expedition to find a better route to Asia). Canada’s bilateral relationship with India has languished due to a number of factors, including what some might describe as benign neglect.

Prime Minister Stephen Harper does not appear to need convincing that this trend must be reversed. In his recent speech to the World Economic Forum in New Delhi, the Prime Minister correctly noted that India is “a place where globally important decisions are increasingly being made.” But Canadian awareness of the shifting economic opportunities must also be matched with an evolution in attitudes toward India.

 Fairly or unfairly, many in India still perceive Canada’s attitude as having colonial undertones, that there is an implied sense that “we are here to help.” Although India clearly has issues with income inequality and poverty, the perception of paternalism undermines our ability to foster stronger ties with Indian business.

 I have often heard international clients and business contacts praise individual Canadian business people for being far more respectful of cultural differences than their American and European counterparts. And yet there is an overall sense among Indian businesses that Canadian companies try too hard to impose their own way of doing business when abroad. It is absolutely crucial that we bridge this gap without, of course, compromising core Canadian values.

 Equally damaging is the perception that all levels of Canadian government and many companies lack the essential­ commitment to the long haul when it comes to building business relationships in India. There is a troubling view that we are there for the weekend or, worse, that we only visit India when we are “in the neighbourhood” having real negotiations with the Chinese. (Just think how we feel when international visitors tack on a token visit to Canada after travel-ling to the United States.)

 I cannot stress enough how much India’s attitudes toward Canada and the West have changed in recent years. Indians are properly taking immense pride in the explosion of new opportunities in their country, and they are understandably demanding that they be treated as the peers and equals they clearly are. A failure to recognize and respect these changes will jeopardize our ability to seize the opportunities.

 I have had an inside perspective on the evolution of Canada’s relationship with India. My family and I frequently travel back to India, and for many years we were often asked by friends and family about opportunities in Canada. During recent visits, however, those inquiries have been replaced by questions about when we will be moving back to India. The old adage “go West, young man” has been replaced with a steady chorus of “go East.”

 There are encouraging signs that Canadian governments and business leaders are addressing our perceived shortcomings. Since 2006, there have been 24 visits by Canadian cabinet ministers to India, and the Prime Minister visited in 2009 and 2012. Moreover, we now have a High Com-missioner to India, Stewart Beck, who comes from the international trade side of the Department of Foreign Affairs, suggesting there is more of a focus on the business side of the relationship. Over 500 Canadian companies now have sustained operations and investments in India, and several hundred more are developing plans to do so. The Canada-India CEO Forum, led by Hari Bhartia and Tom Jenkins, has been established as a vehicle to promote and establish in-creased trade and investment ties between our two countries.

 These steps reflect the type of dedicated, focused and sustained effort that Canada needs to undertake if it is serious about building stronger ties with India. But there is still more we can and must do if we are to succeed. We are only one of many suitors seeking to woo (and wow) Indians. And given the relative size of our population and economy, we are one of the smaller suitors seeking to rekindle a relationship.

 The 2011 Indian census reveals there are 46 cities in India that have populations greater than 1 million people, not including urban agglomerations or “greater areas.” Canada has 3 cities of this size. More than 1 million Canadians of Indian origin live in Canada — effectively 3 percent of our population. By contrast, Canada’s total population is less than 3 percent of India’s.

 Canada is therefore in fierce competition for India’s attention with much larger countries, including most of the major European economies as well as the United States. Overcoming that size disadvantage requires finding ways to emphasize other strengths. Australia, a country of a size comparable to Canada, has a strategic advantage due to its geographic proximity to Asia. Canada has advantages too, but to date we have not been able to effectively leverage them. One group that could lead the way is Canadians of Indian origin, who have not linked back effectively to the community in India. It is a strategic advantage that Canada must leverage better.

It is often said that where you stand on a given issue will depend on where you sit — so it is perhaps not surprising that I, the president of a large public relations consultancy, see the problem in the context of brand management. As odd as it might sound, in India Canada’s “brand” is not one of the most recognized. Conceptually, therefore, we need to base our efforts in the Indian — and wider Asian — markets on a strategy to enhance and improve “Brand Canada.”

 As with any branding exercise, the key to a successful campaign is identifying and isolating your core strengths and communicating them effectively to your target audience. It is not so much an exercise in conveying how we see ourselves and want the world to see us, as it is one of highlighting those aspects of our country that are most attractive to those we want to attract. To that end, we need to better understand our target audience.

 A 2012 Ipsos Reid report on the effectiveness of efforts to increase the number of international students attending Canadian colleges and universities found that Canada was not a “top-of-mind destination” for prospective students in India or China. The report stated, in part, that Canada’s work in this area was insufficiently detailed when it came to highlighting Canada’s advantages relative to those of the United States and the United Kingdom.

 The report recommended that future marketing and advertising campaigns should more clearly articulate factors such as the quality of our educational institutions, our liberal immigration policies, our strong and distinct culture, as well as Canada’s record of innovation and research. More specifically, it recommended the development of a “clear national brand” — something that both the United States and the United Kingdom already have and exploit.

 Given the undisputable links between higher education and economic growth, the broader lesson here is that promoting Canada’s cultural distinctiveness is crucial to strengthening our global brand. Foreign Minister John Baird has spoken passionately and persuasively about the need to promote Canadian values of freedom, democracy, human rights, and the rule of law as part of our efforts to promote Canada’s economic interests.

 In contrast to some of the other large and emerging economies in Asia, India shares Canada’s strong commitment to all four of these core values. We also share similar banking and legal regimes, as well as other legacies of the former British Empire. We have a vested economic interest in highlighting the elements we share with India as well as what differentiates us from the other Western countries vying for its attention.

 Prime Minister Harper has compared the Canada-India trade relationship to the plot of a Bollywood movie, in which the hero competes for the beautiful heroine in a crowded field of suitors. It is clear who the love interest is in the relationship. The question is whether Canada can present itself as being attractive enough to win the girl, in a world full of suitors.

 Goldy Hyder is president of Hill+Knowlton Strategies Canada.

Ottawa—Over the past two weeks, Canada has been participating in the World Conference on International Telecommunications in Dubai to develop an updated set of international telecommunication regulations.

“Canada believes in a secure, stable and resilient Internet that enables rapid innovation and delivers benefits for Canadians,” said the Honourable Christian Paradis, Minister of Industry. “The current multi-stakeholder, private sector–led model promotes innovation and the development of new digital industries.”

With many like-minded countries, Canada endeavoured to reach consensus on new International Telecommunication Union regulations that recognized advances in telecommunications while maintaining an open, accessible Internet. The final treaty text tabled in Dubai included provisions that threaten these freedoms and, as a result, Canada and many other nations were unable to sign on to these new regulations.

“Our government will continue to support an open and accessible Internet that facilitates economic development and prosperity,” added Minister Paradis.

By Rubina Haq-Ahmed

Toronto

Bring up the topic of cable, internet or phone companies and you’ll inevitably have hours of conversations that range from, how someone got the best deal to how a customer feels totally ripped off by the high fees.

In my case I went from feeling totally valued by my communication provider, to completely duped in a matter of four months.

Here is My Story

On several occasions in December 2011 my Internet connection failed. Once, I was told, because of an area outage, another because of construction near by that knocked down a pole and a few more incidents that my Internet provider could not explain. After one lengthy outage, that lasted more than 24-hours, I was getting particularly frustrated because I work from home and having an Internet connection is key to my business.

I don’t believe in calling your Internet and cable provider to ask for a discount just because you want it, but I did want to be compensated for my inconvenience. I deserve to have the internet connection I’ve paid for, with no interruptions.

The Discount I Couldn’t Turn Down

At the time Customer Service at Rogers was great. As a way to say sorry, Rogers offered me a deep 70 per cent discount on my internet service with a guarantee that I would keep my internet service with them for two years. The kind representative went a step further to credit me back the days that I had no service. Really how could I say no. I was told how much my total bill would cost, including cable for the next 24 months.

I was over the moon at the rate I was getting. I tweeted about it, sent kudos to Rogers Help desk and made it known I was a happy customer.

When the Honeymoon Ended

Then in March 2012 I noticed my bill had gone up by $5. How could this be?! I had struck a 24 month deal with my provider in December. When I called to ask them why, they told me my cable package would now cost $5 dollar more every month and there was nothing I could do to change that. I then learned the deep discount I had on my internet service came with a stipulation, that I had to pay the cable TV service at the regular rate even if it went up. They added they could theoretically raise my cable TV rates and I could not negotiate or complain. I can’t leave and go to another cable provider either, if I did I would have to “pay back” the internet discount I was getting and pay an early cancellation fee. Even though I have been a Rogers’ customer for more than 10 years.

My Negotiating Skills are now Zero

I investigated what Bell was offering and found they had the same package for $35 dollars less, but Rogers told me they would not match it and I could do nothing about it. I’m still trying to leave the cable portion of my Rogers package, because it was never explained to me that the deal was so restrictive.

How can they Break a Promise with no Repercussion?!

This is the problem I have with Rogers, they made me a deal in December that I would get a certain rate on my internet for 24 months but never explained that it included me paying the full rate for cable and that they could raise that rate when they needed too. They also never explained that the two services were tied at the hip and I could not leave or negotiate the cable without affecting my internet deal.

I’ve never asked to break my internet deal, the one they were saying sorry for, I only want a fair price on my cable that other competitors are advertising or at the very least don’t raise the price if I don’t have the power to leave.

Lessons Learned

What I learned from this experience is keep your cell phone at one carrier, cable at another, Internet at a third and landline at a forth. There are enough service providers out there to make this happen.

The only service I have ever been able to negotiate effectively is my cell phone, which I have through Telus. It’s because it’s the only business I give them.

My main message is NEVER EVER bundle your Internet, cable, wireless and phone into one bill, keep the power of negotiation in your hands.

Courtesy: http://www.ratesupermarket.ca/blog/beware-of-bundle-packages/

By : Rubina Ahmed-Haq
Toronto

Summer is only a few months away and many of you might be planning on taking a holiday to get some much needed R & R. But before you press “buy” on that expensive European holiday you have to decide if you can afford it. Here are some simple ways to figure out how much you spend this year. 
The 4% rule 

If you’re carrying a mortgage, line of credit or any other low interest loan I recommend spending 4% of your after tax income on vacations. Why? Unless you have no debt anymore, than any more spent on vacations will be eroding into your long-term savings. If you’re carrying ANY high interest debt like a credit card or store card loans, you must pay this off before you hit the road (or the beach) on a holiday.

Cash in the bank

Always pay cash for your holiday. NEVER charge your holiday on credit unless you have the money already in the bank. Remember following the 4% rule, if your household income is $50,000 your holiday budget is $2,000 annually. Want to spend more? Save longer. Make one year a staycation to afford a luxury holiday the following year.

Taking a break doesn’t need to cost you a fortune

It’s important to take a break and have some time to recharge. But if your bills are piling up, this is the year to use some of your vacation money to get out of debt. You can take a break without spending to much money. Road trip, previously mentioned staycation, visiting family and friends.

Stretch your holiday dollars

Booking a holiday out of country the prices are usually best around six weeks in advance. Check rates on line and call competing agents to see if they can beat it. Traveling midweek is cheaper for flights. Look for all-inclusive roulette holidays; these are ten preselected hotels at a certain star rating offered at a discounted price. Recently I stayed at a 4 star plus for $1054 taxes in. I would have paid twice that if I booked individually. The catch is you find out your hotel name 3 days prior. You pick the general area, i.e. Mayan, Cancun or Punta Cana.

Look at costs from all angles

It’s always wise to do through research before you go. Online review sites like tripadvisor.ca have made it easier to plan and prepare. Pay attention to details like, is the airport transfer included? Is there departure tax? What’s the average cost of eating out? For example I priced out a villa in St. Barts once at a reasonable rate, but later learned, through research, that the cost of groceries, transport to the island, restaurants was much higher than anywhere else in the Caribbean. Staying there was reasonable but everything else was too expensive.

When can you not afford to take a vacation?

By taking a close look at your finances you can decide if you can afford to get away this year. Generally your after tax income should be divided as follows.

• Housing 30%
• Savings 15% (10% pay yourself- 5% short term)
• Other Living Expenses 30%
• Debt servicing 10%
• Transportation 15%

Break this down and your mortgage and taxes should not cost more than 30% of your after tax income, transportation shouldn’t exceed 15% If you’re spending more than this amount, you might want to look at tackling your household debt before you spend money on getting away. That said you should still look at ways of taking a break from work, staying at home, visiting family or a short weekend away, all of this will make you feel good and not drain your finances.

Cheap Vacations Ideas

1.   Book a night or weekend at a nearby hotel.

2.   Check out local festivals.

3.   Hit up the museums for a dose of culture.

4.   Spend some time with the great outdoors.

5.   Hit the beach with a pile of books to read.

6.   Have a proper Girls or Boys night out on the town.

7.   Live in the city? Get out of town to a local trail for an all day hike.

8.   Visit social coupon sites to stack up on great deals to use during your staycation.

9.   Take dance lessons.

10. Get a one-week pass at an ultra high-end gym.

Courtesy: http://www.alwayssavemoney.ca/

Gord Hundal, VP, Commercial Financial Services, RBC

RBC has been a pioneering financial institution when it comes to fulfilling the needs of new Canadians. The bank’s Welcome to Canada package helps customers with their personal and small business needs. However, RBC also has an extensive commercial banking offering to help entrepreneurs flourish in their business. Recently, Generation Next had the opportunity to talk to Gurinder Singh (Gord) Hundal, the Vice President Commercial Financial Services. He is responsible for RBC’s Business Clients in the industry specializations of Business Services and Retail and Franchise Markets for the Peel market.

A typical client in Gord’s portfolio “would be someone who’s got revenues of more than $2 million, more than five employees, some degree of complex ownership—they are multinational, they have some sophisticated cash management product, and they could have some credit needs or maybe they don’t have any credit needs. An example of a client in our portfolio would be a law firm with about $20 million in revenue, about 10 lawyers on staff, is complex in the sense that it’s a partnership structure, and they have lots of different needs.”

RBC helps these clients with their borrowing needs, deposit needs, as well as with everyday banking needs. “From the borrowing perspective,” says Gord, “we help them with term loans or leases for equipment, operating lines of credit, to help them manage their cash flows and commercial mortgages to help them buy real estate, which is something a lot of our clients seem to be doing these days.”

As a representative of a bank that prides itself on its outreach to the South Asian community, Gord finds South Asian clients highly sophisticated when it comes to commercial banking. He gives an example, “I am thinking about this restaurant owner—he has owned and operated businesses in India, Pakistan as well, and they have an understanding of how businesses can be supported by banks.” Gord says RBC’s commercial clients and South Asian clients rely on four key pillars—convenience, advice, service and value for money. He explains further, “My team works with business services in retail clients. So any clients that are business-services or business to business, or business to consumer on the retail side of things—law firms, accounting firms would be part of our portfolio, as would be restaurants, gas stations, small retailers, marketing companies. So we, by providing specialized advice help our clients because we’re familiar with their types of businesses, but we also have the opportunity to understand that there’s a difference between a business-services client, say a law firm and maybe a trucking company.

For Canadian companies that are based here and looking to do business internationally, RBC helps them navigate globally. The bank provides such clients with industry-specific advice and professional services, competitive foreign exchange rates and flexible credit solutions. RBC’s global network of premier financial institution helps their clients gain a wider perspective too.

With regard to enhancing the level of financial literacy among their South Asian clients, RBC takes a case-by-case approach. Says Hundal, “Someone starting off a business will have a very different conversation than someone who’s perhaps at a point where maybe they want to transition the business to maybe want to sell the business.” The bank also spends time with clients to introduce them to law firms or accounting firms that can help them get better financial literacy.  Additionally, RBC is involved with the Newcomer Centre of Peel to help new Canadians get acquainted with the finer aspects of Canadian banking and finance.

Commenting on current trends, given the economic downturn, Hundal says business clients seem to be showing cautious optimism when it comes to borrowing or investment decisions. However, he adds, “our business clients that have identified growth and are looking at new growing markets such as the Bramptons and the Mississaugas of the world are definitely still borrowing money to help fund that growth.”

One of RBC’s core values is “Diversity for Innovation and Growth.” Describing his own role in furthering diversity within his organization, Hundal says, “I am the Executive Champion for the Greater Toronto Area, newcomers to Canada, employee resource group—it’s an internal group that promotes resources and sharing of experiences within RBC so that staff who are new to the country can have the opportunity to connect, share best practices, and be introduced to various other members of the RBC family. I have also taken on several individuals to help mentor people who have demonstrated strong business and financial acumen and need to get a better understanding of how you do business in Canada, what is leadership in Canada. It’s something I am very passionate about and devote a lot of my time to—coaching, nurturing and sharing some of my experiences with some budding South Asian talents and individuals.”

RBC has also taken initiatives to promote cricket in schools. Generation Next asks Hundal about the wisdom of this investment. He explains the initiative is part of the bank’s commitment to growing healthier communities at the grassroots level. Recalling an anecdote around the game, he says, “A couple of years ago, in my previous role, we actually had an internal cricket match between two markets for our branch leaders. First of all, it was a lot of fun, and the majority of my team and the team we played had never played the game before, but having the opportunity to play a game of cricket, our sales leaders developed an understanding of the game, why our clients are so passionate about cricket.”

In a similar vein, Hundal tells Generation Next readers that “On February 20, eight locations across the GTR are going to host free skating sessions. It’s an opportunity to get out and skate, embrace the Canadian sport of hockey, and win possibly signed jerseys and just have some real fun on our family day. In our experience, a lot of our South Asian clients are excited by this opportunity because they never had the opportunity to go to a rink before. By hosting this event, we are introducing a key fabric of the Canadian community to a community that wants to learn and live and try a sport that’s popular here in Canada.”

With its twin objectives of smart banking and building healthier communities, RBC is likely to win a lot of appreciation from the South Asian community in Canada. And that may well translate to winning more clients.

The frustrations of getting employed in Canada are often particularly severe for new Canadians, a group that often sells most or all assets in their jurisdictions of birth in the hope of a new life in Canada. Often times, whether by design or compulsion, new Canadians are driven to starting a business as a source of livelihood. While the success stories from such opportunities are many, the decision to start a business has legal ramifications and a business should be commenced with as much planning and legal advice as possible. At the forefront of the business decision is a determination of the appropriate vehicle to use for such purposes.

This article focuses on the use of a corporation as a business vehicle and canvasses some of the basic issues to be considered in this regard. This article is for informational purposes only and should not be construed as legal advice.

Benefits of a Corporation

A corporation is often the first vehicle of choice for entrepreneurs. While carrying on business as a sole proprietor (i.e., without any formal business vehicle) is often the easiest option, a sole proprietor is personally liable for the liabilities and obligations of the business and may unknowingly expose his/her savings and assets to creditors and any other person having a right of action against the business.

The use of a corporation allows an entrepreneur or new business owner to protect personal assets and savings from the liabilities arising from the business. It provides a corporate veil that may not be pierced otherwise than in egregious circumstances. It also allows for the conduct of the business through a proper business vehicle, allows for sophisticated tax planning if the business is successful, and may enable the business owner to access outside funds (whether through loans or investments) more efficiently.

Incorporation Basics

Incorporating a corporation in Canada is a simple yet complicated task. On one hand, a corporation can be incorporated without legal or accounting help. On the other, a proper incorporation done with the help of sophisticated advisors can be effective and a cost-saver in the long run.

A corporation may be incorporated federally or in any of the Canadian provinces. Some provinces like Nova Scotia also allow for incorporations of unlimited liability companies, a tax planning vehicle not considered in this article. The key distinction between a federally incorporated and a provincially-incorporated corporation is that the former may carry on business in any province or territory (provided that it complies with the applicable registration and reporting requirements of each province) whereas a provincial corporation is required to obtain an extra provincial licence and register in any other province where it carries on business.

Incorporation is done by filing articles of incorporation along with the preparation of the relevant by-laws. The corporation should issue shares on incorporation (although technically it may be possible to incorporate a corporation without share capital). Shares are issued to shareholders in return for consideration that could include cash or property (a contribution of property in return for shares may require a tax election to ensure that the contribution may be made without any immediate tax consequences).

A corporation must choose a name for incorporation purposes. If no specific name is chosen, the relevant incorporating agency will issue a default name (usually a name identified by a unique number). If an actual name is sought for the corporation, a search for the particular name must be conducted in order to determine if the name (or extremely similar versions thereof) is already in use, in which case the name may not be available. Different jurisdictions provide different levels of protections for names, and depending on the jurisdiction of incorporation a name may or may not be available for use. It should be noted that the availability of a name for incorporation under a federal or provincial statute does not usually provide protection for that name from an intellectual property standpoint. Appropriate intellectual property registrations must be considered for such protection.

A corporation must also provide for a minimum number of directors and have at least that minimum immediately after incorporation. Most Canadian statutes require a minimum number of Canadian directors for corporations incorporated under such statute. For example, Ontario requires that at least 25 percent of the directors of a corporation incorporated in Ontario be resident Canadians. It should be noted that there is no such requirement for the shareholders of a corporation (except in protected sectors).

Generally, a corporation has the capacity and, subject to its governing statute, the rights, powers and privileges of a natural person. A corporation is usually not restricted by its articles from carrying on any business or businesses or from exercising any power or powers. A corporation must choose a financial year-end in its by-laws. The initial by-laws usually also provide rules for a host of other major issues relevant to the operation of the newly incorporated corporation (e.g., annual proceedings, notices and returns, shareholder meetings, proxies etc.).

Tax Registrations and Rates

A corporation must register itself for tax purposes. Generally, the act of incorporation should result in an automatic business number from the Canada Revenue Agency (“CRA”). Otherwise a business number may be obtained by completing Form RC1 (available on the CRA website). A corporation that makes taxable supplies must also register for the Harmonized Sales Tax. Where appropriate, payroll accounts and/or import/export accounts must also be registered.

A corporation is required to file an annual tax return within six months of its year-end. Under certain circumstances (e.g., an amalgamation or an acquisition of control), the taxation year may terminate early, in which case, the corporation must file a tax return within six months from the date of such termination. Harmonized Sales Tax Returns must be filed annually, quarterly or monthly depending on the volume of the corporation’s taxable supplies.

Corporations are taxed at different rates than the rate of tax on individuals. To this extent, incorporating a business allows the incorporator the opportunity to defer tax if the income of the corporation is not passed on to the shareholders immediately. A simple example illustrates this point. An individual resident in Ontario and carrying on business as a sole proprietor will pay tax at the highest marginal rate of 46.4 percent and may end up paying tax at that rate on part of the business income in the year in which such income is earned. On the other hand, if the business is carried on through a corporation, the rate of tax on the corporation will vary from 15.5 percent to 28 percent (discussed immediately below). If the corporation does not pass on its after-tax income to its shareholder immediately as a dividend, the difference in the rates of tax allow for deferral of the additional tax that would have been paid had the individual earned such income directly. It should be noted that the combined rate of tax on corporate income and on income received as dividends by an individual shareholder will be similar to the rate of tax imposed on an individual earning business income as a sole proprietor, and hence, the deferral is only available if a corporation retains its income and does not pay it out immediately as a dividend.

As noted above, a corporation is taxed at rates varying between 15.5 percent and 28 percent (these are combined federal-provincial rates applicable to a corporation paying tax in Ontario at the time of writing). The rates of tax applicable to a Canadian-controlled private corporation (i.e. a corporation not controlled by non-residents or public corporations) are 15.5 percent for active business income up to $500,000, 28 percent on active business income in excess of $500,000 and 46.2 percent on investment income. A corporation that is not a Canadian-controlled private corporation pays tax at 28 percent on active business income and investment income and 26.5 percent on general manufacturing and processing income. Generally, income taxed at normal tax rates can be paid out as dividends to individual shareholders resident in Canada at a lower rate of tax than income taxed at the lower tax rate.

Conclusion

This article is a simple discussion of the benefits of the use of a corporation as a business vehicle and the advantage of using a corporation from the commencement of the business. It is not an exhaustive discussion of corporate and tax issues surrounding a corporation. Readers should consult a legal advisor about the exact issues pertaining to their unique business and individual circumstances.

Ron Choudhury is a partner and member of the firm’s Tax and Mining Groups and Estates and Trusts Litigation Team.

“Everyone, whether they have a job or not, will need a place to live—whether it is in an apartment or a home. Especially in the South Asian community, we can get a house anywhere without a job because we can live together and share a place. So the house market has not been affected in the GTA for that community.”

Mike Chettri has worn many hats throughout his life. Blossoming over the years as the familiar immigrant taxi driver to the neighborhood corner store owner to what he is most known for, a booming real estate agent within the GTA, Mr. Chettri has finally found a hat that he will not only wear with pride, but ultimately keep for good.

With his name engraved as the 2011 Hall of Fame recipient, apart from his fellow four thousand other Remax agents in the GTA, Mr. Chettri attributes his success to mainly his customer service skills that have eventually resulted in many word of mouth referrals. “I teach all my clients about how to handle their money. I give them advice on their house and where to buy. That is what made me on top. It made me stand out.”

With his ten years of customer service in the real estate industry, Mr. Chettri has shared with our Generation Next reporter a few of his words of wisdom for potential buyers looking to take advantage of the next hot thing in the real estate market.

As condos within the downtown core are becoming somewhat of a trophy item for young professionals, Mr. Chettri encourages investors that it is a worthwhile investment for not just the younger generation, but the older ones as well. “The youth in the next generation are definitely interested in the condos for living, but the older generations are buying condos for investments. Since I work mostly with condos, the way that I see it is that the condo market will remain strong. Right now the condo market is selling approximately 700 dollars per square foot. If you buy one condo now, in three years, the price will be 1,000 dollars per square foot. So for every square foot it would be a 300 dollar profit. Over the next three years, the condo market in Toronto will grow stronger.”

As condos continue to be sought out, there are still many factors that individuals should consider before taking that next step. Mr. Chettri cautions new buyers on what factors can become a major assets when deciding on where one chooses to live. “Look at the city plans over the next five years of where you want to move to. See what is being developed so that in five years the price will go up in your investment.” Thinking ahead is the key to Mr. Chettri’s advice to his clients as many buyers can later flip their investment into a profit that will ultimately land them in a bigger and better property in the future.

Even with the recent economic setback, with many Canadians struggling to find full-time jobs, Mr. Chettri is optimistic that this will not have a great impact on the real estate market. “Everyone, whether they have a job or not, will need a place to live—whether it is in an apartment or a home. Especially in the South Asian community, we can get a house anywhere without a job because we can live together and share a place. So the house market has not been affected in the GTA for that community.”

With the GTA continuing to fill orders for more condos and houses to be built for their clients, residents are becoming more and more familiar with the buzzing chainsaws of the 6 am morning construction worker. Mr. Chettri believes that many residents should take this as a sign, especially for potential investors, as he believes that the high property demand has yet to be satisfied with enough supply.

On October 4^th, Chevrolet transforms Yonge-Dundas Square with exciting events and entertainment all day long.

Experience the electrifying Voltage lightning display and the 2012 Chevrolet Volt, the electric car that goes farther.  Check out the Volt MY DRIVE app, and then get in and take a Volt for a test drive.

Need some help balancing work and life?  Take a lunch-time break at the Chevrolet Orlando Stage with our three life experts.  CityLine’s Nanny Robina whips up dinner for four in seven minutes.  Erica Ehm from YummyMummyClub.ca talks about her family trip to Orlando in an Orlando, with tips to help you cope on those long drives, and Wendy Woods helps you relax and have fun with Laughter Yoga.

Plus, you might win entering the Orlando Parking and the Orlando Packing challenges.

Get into the 2012 Chevrolet Sonic.  It’s fun, turbocharged.  Get inside a Sonic and mash up your favorite tune with a mix from world-renown DJ Dopey.  Watch as Toronto Graffiti artist SKAM creates a 40’ work of art, live throughout the day.

And then at 7:30, join us for a free concert with FITZ AND THE TANTRUMS, live on stage.  Come to Yonge-Dundas Square on October 4^th, and text for a chance to win a 2012 Chevrolet Sonic to be given away during the FITZ AND THE TANTRUMS concert.

Test drive Sonic, Orlando and Volt, at Yonge-Dundas Square on October 4^th, have fun, and see how Chevrolet is Driving Our World Forward.

Debanshu Majumdar, Regional Head - Americas answers the press questions as Sudhesh Giriyan, Vice President Xpress Money listens intently

2011 has been a “very very important year” for Xpress money, said Sudhesh Giriyan, Vice President Xpress Money at Xpress Money launch ceremony in Toronto. With 35,000 locations in India, Xpress money is making its mark both in the corporate world of money transfers and at individual level.

It distinguishes its services from its competitors in a variety of different ways:

One, the text message is sent to the recipient the moment funds are transferred.

Two, the funds are instantly available

Three, there is no charge in case of cancellation

Four, network of strong and reliable partners in South Asia

Five, strong IT capability, and,

Six, superior customer service.

Xpress Money charges modest $8 to send money to India ($8 fee is the starting off fee) and $0 to send money to Pakistan.

While people may get unsettled when asked to provide detailed documentations to send money overseas from Canada, Mr. Debanshu Majumdar, Regional Head Xpress Money says that Xpress money will be compliant with all the laws the Canadian legislators have put in place.

With uncertain global climate, Canadian governments at all levels are trying hard to create business friendly environment in Canada. With its plans to spread its network across GTA, Montreal and Vancouver, Xpress Money will undoubtedly create jobs in Canada. It plans to have 150,000 active locations. Some of these locations will operate in Canada. It’s vision is to have Xpress Money agent at every 2 kilometers. Xpress money will also be launching an online money transfer system from Canada as early as November 2011. Canada will be the first country to offer Xpress Money online service.

Mr. Giriyan noted that 4 per cent of India’s GDP is contributed by Indian Diaspora living abroad. He stated that Canada is a premier market as the Indian Diaspora is strong and viable in Canada.

Here in Canada, Mr. Majumdar says that they have outreached to organizations like Indo Canada Chamber of Commerce, Canada Pakistan Business Council and other South Asian organizations.