Canadians Must Hold Governments Accountable For Their Spending of Tax Revenue

The average Canadian family’s largest expense is taxes.

Therefore it should not be unreasonable that Canadians expect all levels of government to not waste their tax dollars, money taken off their paychecks and paid into the system.

Whether tax dollars are wasted when a government pays a negotiation bonus to unions, or if they have to pay private companies a fine after breaking contracts with them, governments must do a better job at keeping the optics above-board and avoid $200,000 moving expenses or $1300 a person dinners altogether!

But they don’t, or they can’t, and we, as Canadians have come to expect that from our elected officials.

If governments want to spend fast and loose with money, let it be their own, or at the very least taxes off of non-Canadians – like withholding taxes, or something of the like.

But if we, as Canadians do not hold these governments accountable for their spending of our taxes, we allow them to continue to do this and they will continue to do so.

If we held our elected officials to a higher standard and used the opportunity to remove governments who wasted taxpayer dollars immediately, it would send a message to the next government that they have to spend wisely.

This information came out in the late summer months from the Fraser Institute, an economic think-tank.

To clarify, when referring to taxes, its not just income taxes, but all the taxes Canadian Taxpayers make to all levels of governments (federal, provincial, and local), including both visible and hidden taxes— everything from income taxes, which are less than a third of the total, to payroll taxes, sales taxes, property taxes, health taxes, fuel taxes, vehicle taxes, import taxes, alcohol taxes, and much more.

In a recent report published by the Fraser Institute, they tracked the total tax bill of the average Canadian family from 1961 to 2014.

For 2014, they estimated that the average Canadian family (including unattached Canadians) earned $79,010 in income and paid $33,272 in total taxes—or 42.1% of income—while just 36.6% went to food, clothing, and shelter combined.

Indeed, Canadian families spend more on taxes than the basic necessities of life.

But it wasn’t always this way.

Back in 1961, the first year the Fraser Institute started tracking this data, the average Canadian family paid a much smaller portion of its household income in taxes (33.5%) while spending proportionately more on the basic necessities (56.5%).

Since 1961, Canadians’ total tax bills have increased by 1,886%, dwarfing increases in shelter costs (1,366%), clothing (819%), and food (561%). Even after accounting for inflation (the change in overall prices), the tax bill shot up 149.2% over the period.

And now taxes eat up more income than any other single family expense.

So why should Canadians care, aside from the fact that we work really hard to earn an income, and pay these taxes?

With more money going to the government, families have less to spend on things of their own choosing, whether it’s a new car, technological gadget, or family vacation. They also have less money available to save for retirement and their children’s education, or to pay down household debt.

While there’s no doubt that taxes help fund important government services, the issue is the amount of taxes that governments use compared to what we get in return.

To make an informed assessment, you must have a complete understanding of all the taxes you pay. Unfortunately, it’s not so straightforward because the different levels of government levy such a wide range of taxes—with many taxes buried in consumer prices and hard to discern.

Armed with this knowledge, we can hold our governments more accountable for the resources they extract and continue a public debate about the overall tax burden, the amount and scope of government spending, and whether we’re getting our money’s worth.

Otherwise, taxes will continue to increase.

So why is this important to us?

It is important because we understand that taxation is a necessity in order to have a healthy, wealthy, productive society for everyone, and in paying taxes there are circumstances which arise that make the system disadvantages to some Canadians.

Unlike our neighbours to the south who shoot elected officials for spending money, we are much more in control of our emotions (plus, no guns, eh?) so we need to hold them accountable in different ways, such as, not re-electing them. and going to public debates, and letting the officials that we elect know that they can no longer waste our money!

We can fix this.

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The Truth and Myths Around the CRA’s Taxpayer Relief Program

There is quite a lot of information on the Internet around the Canada Revenue Agency’s (CRA) Taxpayer Relief Program (formerly known as fairness).  Understandably, there is also a lot of misinformation around this program.  After having spent almost 11 years working in the CRA – beginning as an entry-level collector and working my way up through the division to a team leader before taking my MBA and heading into the private sector –  I have learned quite a lot about how the Taxpayer Relief program actually works.Myth vs Reality

This post will identify the key objectives of the program straight from the CRA, and then highlights some common myths about the program and the actual fact about why it makes sense to invest considerable time and effort into an application, or engage the services of someone who knows the program inside and out.

The Taxpayer Relief program was set up to allow for the Minister of National Revenue to grant relief from penalty and/or interest when the following types of situations prevent a taxpayer (individual or corporation) from meeting their tax obligations:

  • Extraordinary circumstances;
  • Actions of the Canada Revenue Agency (CRA);
  • Inability to pay or financial hardship;
  • Other circumstances

The program distinguishes between “cancelling” and “waiving” of penalties and/or interest as the CRA understands that granting relief to a taxpayer only to see them smothering in penalties and interest again is an exercise in futility.

The term “cancel” refers to a penalty or interest amount that is assessed or charged for which relief is granted, in whole or in part, by the CRA.

The term “waive” refers to a penalty or interest amount that is not yet assessed or charged for which relief is granted, in whole or in part, by the CRA.

The term “Taxpayer” includes individual, employer or payer, corporation, partnership, organization, trust, estate, goods and services tax/harmonized sales tax (GST/HST) registrant or claimant.

Now, you or your client, has been charged penalties and / or interest and you want to know if you qualify.  Look no further than the CRA website, and their section on Taxpayer Relief, here.

Circumstances that may warrant relief include;

Extraordinary circumstances

Penalties or interest may be cancelled or waived in whole or in part when they result from circumstances beyond a taxpayer’s control.  Extraordinary circumstances that may have prevented a taxpayer from making a payment when due, filing a return on time, or otherwise complying with a tax obligation include, but are not limited to, the following examples:

  • Natural or human-made disasters, such as a flood or fire;
  • Civil disturbances or disruptions in services, such as a postal strike;
  • Serious illness or accident; and
  • Serious emotional or mental distress, such as death in the immediate family.

Actions of the CRA

The CRA may also cancel or waive penalties or interest when they result primarily from CRA actions, including:

  • Processing delays that result in taxpayers not being informed, within a reasonable time, that an amount was owing;
  • Errors in CRA material which led a taxpayer to file a return or make a payment based on incorrect information;
  • Incorrect information provided to a taxpayer by the CRA (usually in writing);
  • Errors in processing;
  • Delays in providing information, resulting in taxpayers not being able to meet their tax obligations in a timely manner; and
  • Undue delays in resolving an objection or an appeal, or in completing an audit.

Inability to pay or financial hardship

The CRA may, in circumstances where there is a confirmed inability to pay amounts owing, consider waiving or cancelling interest in whole or in part to enable taxpayers to pay their account. For example, this could occur when:

  • A collection has been suspended because of an inability to pay caused by the loss of employment and the taxpayer is experiencing financial hardship;
  • A taxpayer is unable to conclude a payment arrangement because the interest charges represent a significant portion of the payments; or
  • Payment of the accumulated interest would cause a prolonged inability to provide basic necessities (financial hardship) such as food, medical help, transportation, or shelter; consideration may be given to cancelling all or part of the total accumulated interest.

Consideration would not generally be given to cancelling a penalty based on an inability to pay or financial hardship unless an extraordinary circumstance prevented compliance, or an exceptional situation existed. For example, when a business is experiencing extreme financial difficulty and enforcement of such penalties would jeopardize the continuity of its operations, the jobs of the employees, and the welfare of the community as a whole, consideration may be given to providing relief of the penalties.

Other circumstances

The CRA may also grant relief if a taxpayer’s circumstances do not fall within the situations described above.

The CRA expects these guidelines to be used when applying for relief and that the requests are made within the deadlines for requesting relief, which is limited to any period that ended within 10 years before the calendar year in which a request is submitted or an income tax return is filed.   The 10-year limitation period rolls forward every January 1st.

If filed using the correct form, with sufficient supporting documentation, a response from the Taxpayer Relief Program can take anywhere from 3 months to 2 years due to the amount of requests.  In order to ensure that you are making the best claim possible, you really should engage the services of a professional, as they would be able to assess whether or not your request is sufficient, and they would ensure that you meet all the other conditions which must be in place for the CRA to review and consider your application.

At the end of the day, if you have a reasonable chance of being successful under this program, the investment made to have it written, reviewed or monitored by an expert is a worthwhile expenditure.

Now let’s have a look at some common myths around this program which are floating around the Internet.

Myths

Myth: That the CRA’s Taxpayer Relief program is a one time program and that you had better take your best shot the time you decide to apply.

Reality: Not true,  This program is available to all Canadians who have been charged penalties and / or interest and as such, they have the right to ask for relief each and every time it is warranted.  The Taxpayer Relief Group do not maintain collection inventories and as such they review each case on the merit of its submission without any influence from the permanent collections diary or the collector assigned to the case.

Myth: That the CRA’s Taxpayer Relief Program is used in order for the CRA and a taxpayer to negotiate a deal which would resolve the taxpayer’s debt issue by settling the debt and accepting less than the actual amount owed to them.

Reality: Never, ever, ever!  The CRA does NOT settle debts outside of bankruptcy or a proposal, and they certainly do not use the taxpayer relief program for this purpose.  As a matter of fact, I can speak of a first hand experience where a collector used the word “settle” in the permanent collection diary of a corporation which had paid a principle tax debt of $650,000, because they wanted to fight the $775,000 in penalties and interest through Taxpayer Relief.  The CRA sent back the $650,000 and re-opened negotiation with the corporation because they did not want to set the precedent of settling tax debts through the Taxpayer Relief Program.

Myth: I cannot afford to pay my taxes, so I am not going to file my tax return, and then when I have a debt, I can ask for relief because I had no money?

Reality:  Failure to file a tax return is a criminal offence which can result in prosecution, so you should always file, and be clear to the CRA upfront that money is tight.  But before an application is made to the Taxpayer Relief Program, all outstanding returns must be filed up to date, and all installments must be accounted for.  Otherwise, the application is set aside until everything is current.

Myth: Having a disability or illness from birth qualifies me for Taxpayer Relief.

Reality: Probably not.  If you have managed to conduct your affairs for a period of time without any tax issues, but then something happens which cases the accumulation of penalties and interest, you cannot use your disability or illness when applying for relief, unless something happened during the period in which the penalties and / or interest were applied as a result of a worsening of your disability / illness.  In that case, you would need to substantiate this with supporting letters from your doctors and specialists.  

Myth:  I met with someone who is going to write a letter to the CRA asking for relief and they have sent me the letter to review.  If I sign it, and they send it off, am I now being considered for relief?

Reality:  Not any more.   Years ago, taxpayers were able to send in letters to the fairness department which contained their reasons for asking for relief and some would include supporting documentation, while others would not.  However, since the CRA revamped the Taxpayer Relief Program, they require that the form RC4288 be included in the package or the claim will be rejected.

Myth:  I need to be pre-qualified for the CRA Taxpayer Relief Program.

Reality: No.  You can determine if you may qualify, or you can seek a professional to help you determine if you have grounds for relief, but there is no pre-qualification of this program.

Myth: If my claim is rejected, then I have to pay the penalties and interest.

Reality:  You should make arrangements to pay the penalties and interest in any case in order to stop the interest clock from ticking should the claim be denied – wherever possible, however, the Taxpayer Relief Program allows for a second-level review to be performed (usually with additional information provided) and there is an option for judicial review should the second level review be unfavourable.

 

So take some time to look around when you are considering an application under the Taxpayer Relief Program and make sure that if you engage someone you do so for the right reasons.

Are Acronyms or Emojis Ever Acceptable for Business Communication

Are acronyms acceptable in a business environment?

The general rule is this: If a customer / client sends you correspondence with acronyms, or emoji’s, it means one of 3 things;

  1. They are young… Very young.
  2. They don’t know how to communicate on a business level which might be an indicator of immaturity, or a genuine lack of understanding of how to communicate with someone that you are conducting business with.
  3. Or they just don’t care.

The communication going the other way should not include acronyms unless the acronym is a generally used and commonly understood short form for a professional organization or term used in finance / your industry.

Emoji’s… Never.  Ever.

But…

There are, however, some exceptions, but they are few and far between.

Imagine telling a friend in an email that you overheard a conversation and that you were “SMH”.  SMH means “shaking my head”.  Your friend saves that email, then down the road wants to introduce you to someone, or refer someone to you, and flips your email out and the person who you were shaking you head at is that person, related to that person, or is best buds with that person.

It might seem small, but it’s not.

The same holds true for people in business who send out emails without taking the time to edit them for punctuation, or spelling, or grammar.  I am certainly not saying that each and every email has to be perfect, but it reflects on you, the time you spend gathers the facts and it tells the person receiving the email that you don’t think enough about them to take the time and ensure that it makes sense and it clear.

If you’re asking for information, make sure that is clear.

If you’re looking for it back by a certain time, make sure that is clear.

If you want to get to the point and are comfortable sending an email demanding something right away, then don’t be surprised if you find that business relationship to be a little cold.  Common sense should tell you that everyone likes to be asked in a respectful manner and given more than a second to provide a response.

Getting back to acronyms, here are some of the acceptable acronyms:

ASAP – As soon as possible.

NSFW – Not safe for work.

These are okay, but not recommended.

FYI – For your information – can be used – but make sure that you know what that means.  Generally it means, this is for you (the receiver of the email) and you can do with the information what you please).

FYI Only.  This means, this email is for you, but do not share it with anyone!  Sharing it could cause huge problems, usually for the personal who wrote or forwarded the email.

Here are some other Business terms you might see used.

Accounting:

DR – debit

CR – Credit

ROI – Return on Investment

CRA – Canada Revenue Agency

IRS – Internal Revenue Service

ITC – Input Tax Credit

GST – Goods and Services Tax

PST – Provincial Sales Tax

HST – Harmonized Sales Tax (both the Provincial tax and the Goods and Services Tax)

VAT – Value Added Tax (like the GST/HST)

WSIB – Workplace Safety and Insurance Board

ITA – Income Tax Act

ETA – Excise Tax Act

BIA – Bankruptcy and Insolvency Act

CY – Current Year

PY – Previous Year

 

Network-related Acronyms

FB – Facebook

IG – Instagram

LI – LinkedIn

YT – YouTube

SC – Snapchat

WP – Word Press

While there is no short form for Twitter, there are some Twitter-related short forms that are often used in more mainstream communications nowadays, such as:

DM – Direct Message

MT – Modified Tweet (Used when re-sharing a Tweet where you alter the text by shortening it to fit within the character limit or removing the  poster’s handle if they have a private account).

PM – Private Message – When someone PM’s you in Twitter, they send a private message to you that no one else can see.

RT – Retweet – When you publish somebody else’s Tweet, in its entirety, to your own feed.

Internally, business units tend to use their own terminology when discussing internal matters.  For example,

B2B – Business to Business – Refers to companies who sell to other companies.

B2C – Business to Consumer – Refers to businesses who sell directly to individuals.

CMS – Content Management Systems are a tool used for editing, scheduling and publishing any written material for the web.

CPC – Cost per Click – the dollar amount an an advertiser pays for every person who clicks on an ad.

CR – Conversion Rate – The conversion rate is the number of people who take an action divided by the number who could have.

CTA (also C2A) – Call to Action – A statement that asks the reader to do something.

KPI – Key Performance Indicators – A metric used to measure success in achieving goals, ie/ measurement of engagement, conversions, shares or clicks, etc.

PV – Page Views

UGC – User Generated Content – content created in order to generate views, comments, etc.

IT – Information Technology

 

Internal Acronyms to get you through an email with your IT Department

ESP – Email Service Provider

ISP – Internet Service Provider

HTML – Hyper Text Markup Language

RSS – Really Simple Syndication

SEO – Search Engine Optimization

API: An “application programming interface” is a set of rules for how pieces of software interact. Your social media management tools use the APIs of Facebook, Twitter and the other networks to post and schedule.

SEM – Search Engine Marketing – How businesses leverage search engines for marketing purposes.

TOS – Terms Of Service

UI – User Interface

 

Taxation

NOA – Notice of Assessment

LFP – Late Filing Penalties

LRP – Late Remitting Penalties

P&I – Penalties and Interest

TPR – Taxpayer Relief

VDP – Voluntary Disclosure Program

T1 – Personal tax return (Individual)

T2 – Corporate Tax Return

RP – Payroll Accounts

RT – GST/HST Accounts

Are there other terms which are commonly used in your field of business which you could add to the list, or do you have any stories of odd or unusual acronyms or emojis you have been sent.  If so, please share the stories below.